Rethinking the rule book

Posted on 12 Feb 2009 by The Manufacturer

Bob Doak of W. L. Gore & Associates (UK) discusses how a high degree of creativity and innovation through flat hierarchies and unorthodox leadership concepts is what makes Gore so successful

“Make money and have fun” was Bill Gore’s vision when he left his position as a chemist at DuPont in 1958 to found his high-tech company in Delaware, USA. He felt that it takes unorthodox organisations to make the most of people’s creativity and potential for innovation. He was convinced that he could do without common methods of employee supervision and control. He believed in a flexible team culture where the associates, as he called his employees, could grow in their individual strengths to create original solutions and inventions. By this approach, he wanted to assert and expand the technology leadership role of his young enterprise.

In the beginning, this extraordinary entrepreneurial concept was regarded as pretty ‘exotic’. Within a short time, however, the success story of Gore products resulted in growing respect and widespread recognition in the business world.

As a global leader in processing fluoropolymers, especially PTFE (polytetrafluoroethylene), Gore manufactures and markets innovative products and technologies, the most well known of which is arguably its GORE-TEX fabric. In the past 15 years alone, the company has received more than 40 awards, many recognising the
success of its unconventional corporate culture. In the US, it has been among the top companies in the ‘Fortune List’ for more than 10 years. In the UK, Gore ranked number one on The Sunday Times ‘100 best companies to work for’ list four times from 2004 to 2007. In Germany, participating in the renowned ‘Germany’s best place to work for’ competition since its introduction 2003, Gore has always been among the top companies
– ranking at number 11 in 2008. And Gore France ranked second out of 100 companies in the French ‘Great Place to Work’ competition in 2008.

The company sees the unique culture that makes Gore a great place to work as being
integral to its commercial success. With a worldwide turnover of $2 billion, Gore
is focused on being a product leadership company. As such, it continuously develops innovative products providing unique benefits for its customers.

Knowing that its key to success lies in the high innovative potential of its more than 8,000 associates worldwide, Gore invests on average eight per cent of its annual turnover in research and development and nurtures an atmosphere of creativity and continuous development. This is achieved by its special culture, combining sociological, philosophical and economic principles.

But the guiding principle remains Bill Gore’s conviction that people work best in a team where nobody feels superior, everybody is closely linked with each other and interactions take place in a flat, grid-like ‘lattice’ structure. From the very beginning, all employees were associates, acting as entrepreneurs and having a share in the enterprise. This is reflected in the company name – W L Gore & Associates – and in
the associate stock ownership plan introduced in the 1970s. Each Gore associate, irrespective of function, profits from the earnings of the company by means of Gore shares in addition to their salary. The longer you stay with Gore, the more you can profit from the growth of the company via your personal share account.

The Gore world is based on a network of units each small enough to allow for direct communication. The ‘small is beautiful’ concept requires some investment in infrastructures but most associates feel the main benefit of the system is the personal atmosphere at work. As Bill Gore found out, a plant size in a range of 150 to 250 associates is the magic limit up to which communication works most efficiently. Therefore the leadership at Gore thoroughly considers which size and structure is best in which market and function to remain flexible and responsive to customer needs, while keeping an eye on investments in infrastructure.

Bill Gore established four guiding principles which are valid for all associates: freedom, commitment, fairness and waterline. Freedom means that within the given framework each associate should have the chance to work and grow in the field of his or her personal strengths. Work is organised in project groups, task forces and functional teams. When somebody has a good idea, for a new product for example, he or she can quickly launch a new project. The waterline principle serves as the regulating force. It compares the enterprise to a ship. Every associate on board is allowed to try new things, as long as the effects of a potential failure do not harm the long-term success or reputation of the company. Projects with uncertain outcomes are compared to drilling holes in the ship’s hull – only tolerable as long as it happens above the waterline. Two questions have to be answered before a new project may be launched: Is it worthwhile to
invest the required energy and resources? If all goes wrong, could we live with the consequences? If the team answers ‘yes’ to both questions, the project can be launched.

In such a culture, there is not much room for traditional job descriptions. It is not positions but functions that count. The associates take on flexible commitments, ie tasks, depending on the business and organisational requirements, sometimes even outside the scope of their main job. They are not specifically told what to do, but commit themselves to fulfilling their responsibilities in a self-motivated and team-orientated way. The attitude is: “I’ll take care of that.” There are no superiors in the conventional sense of the word. In the past, the principle of ‘natural leadership’ determined who could become a leader at Gore.

Nowadays, the selection criteria are more differentiated. For decades, the principle was that only people who had previously worked as normal members in a project group could become the leader of that team and take on responsibility for personnel. The thought was that in the course of time the appropriate ‘natural’ leader would automatically be recognised by the team itself, by his or her readiness to take calculated risks and by his or her social competence. This long-term process of maturing is still alive. However, in the meantime, it is also acceptable to hire external leaders, for example where there is an requirement for ‘economies of speed’.

But no matter whether they have evolved from inside the group or have been hired from outside, leaders at Gore will have a different understanding of their role than in conventional companies. As “primus inter pares” (the first among equals) they act in and between changing teams.

They communicate with all associates without being warded off by secretaries or intermediate reporting lines and can be addressed by everybody through an open door policy. One of the key objectives is to create an atmosphere of trust in which both sides feel responsible and respect the rules of fairness.

Each associate has a sponsor who helps him or her orientate within the ample field of options and who assesses his or her strengths and potentials for improvement in a fair and critical way. The purpose of this relationship is to ensure that everybody finds the
right place within the organisation and steadily grows to contribute as much as possible to the company’s success. Once a year, the sponsor collects feedback from the people the associate closely works with. Technical competence, business performance and social skills are all important. The sponsor then gives the associate feedback and works out milestones for the next year.

In a special leadership development process, a 360 degree feedback system analyses the special strengths, talents and goals of the candidates. Gore’s view is that it is much less productive to focus on correcting a person’s weaknesses than to concentrate on amplifying existing strengths and talents and make sure that each associate works on tasks which match his or her profile. In what could be described as a job sculpting process, weaknesses are only addressed if they seriously impede personal growth or interaction with others.

Life within the Gore culture can be challenging for some. Not everybody will find it easy to work in such an environment of ample freedom and flat hierarchies. Some people will probably even feel uneasy – those who fear taking risks, who prefer clear and detailed instructions, who need firm structures which rarely change, or who aim at a steep linear career in which they can quickly climb the rungs of a ladder from rank to rank within a hierarchy. On the other hand, people who thrive most at Gore tend to be flexible, openminded team workers ready to try unconventional approaches and new methods and to think ‘outside of the box’.