Case-study: WL Gore & Associates

14/04/2015 13:46

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11
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Case-study: WL Gore & Associates

! By Erwin van der Koogh (/about/) " 0 Comments # 10 min

A company with 10,000 employees & $3.2 billion in revenue that has consistently

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won awards for Most innovative company & Best place to work is challenging
everything we think we know about how to run a business. It has no traditional
managers, titles or budgets and it is very wary about economies of scale. Their CEO

About Us

is not appointed by the board, but chosen by peers.

Change is changing. Between the

And if you think this company cant possibly be in business for long; William (Bill) L.
Gore and his wife Viev started it in 1958 by. Their company, W.L Gore & Associates (http://www.gore.com/) is most
famous for their Gore-Tex fabric, but they have thousands of other products across 4 lines of business.
Did I mention they have been protable every year since their foundation? So how do they do it?

Scaling autonomy
The most important decision made within WL Gore & Associates was the one that Bill made when he started the
company. It would be based on the task force model that was sometimes used in his previous company DuPont. Small,
cross-functional teams with a clear goal and outside any formal hierarchy. His question was whether it was possible to
run a complete company like that all the time.

increasing rate of technology adoption,

plummeting hardware prices and the
power shift from companies to
consumers, the only competitive
advantage left is having a learning
organisation.
Unfortunately most companies are
build for the exact opposite: Eciently
operating a given business model.
Time to completely rethink the way
we do business the 21st century.

It turned out the answer is a resounding Yes!

ACKNOWLEDGE KNOWLEDGE WORKERS

Trending

At WL Gore & Associates they are very aware that every employee working there is a knowledge worker and that that
requires a completely dierent way of thinking about management.
There are no arbitrary top-down assigned targets that people have to make. Everything is driven bottom-up. Everyone
makes their own commitments and those are aggregated into forecasts.Everyone within Gore is called an associate, to
show no formal ranks exist. Associates are then able to work on whatever projects they can contribute to most. Even if
that means starting up a completely new one.

SPONSORS
There are no bosses or managers in the company. Instead they have leaders and sponsors. Every employee has one or
more sponsors. Sponsor are there to help employees succeed, by mentoring, giving feedback and connecting you with
others.
But they are not bosses and cant tell people what to do or else.

10 TYPES OF LEADERS
Within Gore there are tons of leaders. A leader is not a full-time position you are for life based on seniority. If enough
people follow you because you are helping them succeed you are a leader. A quote from an anonymous Gore employee:
http://businessin21stcentury.com/articles/profile-gore/

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Case-study: WL Gore & Associates

14/04/2015 13:46

people follow you because you are helping them succeed you are a leader. A quote from an anonymous Gore employee:

If you call a meeting and no one shows up, you are probably not a leader
And there is not The Leader, but there are many dierent types of leaders at many dierent levels. Some of them are:

Technical leader
A technical leader is someone who is recognized by a team as having a special knowledge or experience (for example,
this could be a chemist, computer expert, machine operator, salesman, engineer,lawyer). This kind of leader gives the
team guidance in a special area.

Commitment seeker
Is someone the team looks to for coordination of individual activities to achieve the agree on objectives of the team. The
role of this leader is to persuade team members tomake the commitments necessary for success.

Objective leader
The associate who proposes necessary objectives and activities and seeks agreement and teamconsensus on
objectives.This leader is perceived by the team membership as having a good grasp of how the objectives of the team t
in with the broad objective of the enterprise. This kind of leader is often also the commitment seeking leader.

Contribution leader
The leader who evaluates relative contribution of team members (in consultation with other sponsors) and reports these
contribution evaluations to a compensation committee. This leader may also participate in the compensation committee
on relative contribution and pay andreports changes in compensation to individual associates. This leader is often also a
compensation sponsor.

Product specialists
The leader who coordinates the research, manufacturing, and marketing of one product type within a business,
interacting with team leaders and individual associates who have commitments regarding the product type.
They are respected for their knowledge and dedication to their products.

Plant/Business/Functional leaders
Help coordinate activities of people within a plant/business/functional area.

Corporate leaders
Help coordinate activities of people in dierent businesses and functions and who try to promote communication and
cooperation among all associates.

Intrapreneuring associates
Are those people who organise new teams new businesses, new products, new processes, new devices, new marketing
eorts, new or better methods of all kinds. These leaders invite other associates to sign up for their project.

THE CEO
WL Gore & Associates does have a CEO. The current CEO Terri Kelly was voted into the job in 2005. You read that right:
Voted. And even as a CEO she cant tell anyone in the company what to do. And that is a good thing. In her own words:

I think its wrong to believe that the most important decisions in an enterprise are made by
senior leaders. Some of the most impactful decisions at Gore are made by small teams.
Terri Kelly, CEO of WL Gore & Associates

Networked structure & communications

RELATIONSHIPS AND DIRECT COMMUNICATION

Relationships and Direct Communication is one of the core values of Gore. You are encouraged to form relationships
with people inside your unit, outside your unit, vendors, suppliers and customers.

http://businessin21stcentury.com/articles/profile-gore/

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Case-study: WL Gore & Associates

14/04/2015 13:46

KEEP IT SMALL
One day Bill Gore drove into work when he realised that he did not know everyone in the plant. Realising that his culture
was driven by interpersonal relationships he made a bold move: Instead of choosing the economies of scale he choose
to split the plant and build a new one across the road.
Whenever a group or division reaches about 150-200 people Gore will still split up the people and move one of the
groups to a new location.
This was later backed up by research done by Robin Dunbar and is known as Dunbars Number
(http://en.wikipedia.org/wiki/Dunbar%27s_number). After studying primates he found a correlation between the brain
size of primates and the size of the social group. Running the numbers for humans he came to a prediction of 150.
Later research conrmed that that is indeed roughly the average amount of people we can form meaningful
relationships with.

SIMPLE RULES
Bill Gore articulated four culture principles that he called freedom, fairness, commitment and waterline:
Associates have the freedom to encourage, help, and allow other associates to grow in knowledge, skill, and scope
of responsibility
Associates should demonstrate fairness to each other and everyone with whom they come in contact
Associates are provided the ability to make ones own commitments and are expected to keep them
A waterline situation involves consultation with other associates before undertaking actions that could impact the
reputation or protability of the company and otherwise sink the ship.

Innovation & Experimentation

Gore has been hailed many times as one of the most innovative company on the planet. Certainly on par with innovation
powerhouses like 3M and GE.

INVESTMENTS VS BUDGETS
There are very few budgets at Gore. Budgets promote short-term thinking and that is not what they want. So they look at
it individual opportunities and gure out if it is worth investing. At Gore they do more structured nancial planning these
days than before, but even that is a consensus based approach.
They are in it for the long-term.

ACCEPTING FAILURE
Failure is a part of innovating. And one you cant do without. As Edison remarked on his quest to nd the right material
for the light bulb:

I have not failed. Ive just found 10,000 ways that wont work.

Thomas A. Edison

Conclusion
WL Gore & Associates is a company with an amazing culture. It has won many awards for the best workplace and many
for more innovative. And I think those go hand in hand.You can not have innovation without engaged employees. And
the best way to get engaged knowledge workers is to give them the tools to succeed and get out of the way. This quickly
becomes a self-fullling prophecy.
Gore has this thinking rmly rooted in its DNA from the beginning, but the million dollar question is if it is possible to
achieve in existing companies. I am not sure, but if you have heard of any company that went from a traditional
command & control culture to one resembling this, I would love to hear about it in the comments.
Resources used in this article:
Wikipedia (http://en.wikipedia.org/wiki/W._L._Gore_and_Associates)
Management Exchange (http://www.managementexchange.com/story/innovation-democracy-wl-gores-originalmanagement-model)
http://businessin21stcentury.com/articles/profile-gore/

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Case-study: WL Gore & Associates

14/04/2015 13:46

management-model)
Guardian (http://www.theguardian.com/business/2008/nov/02/gore-tex-textiles-terri-kelly)
Gary Hamels blog on Wall Street Journal (http://blogs.wsj.com/management/2010/03/18/wl-gore-lessons-from-amanagement-revolutionary/)
Gore Website (http://www.gore.com/en_xx/careers/whoweare/ourculture/gore-company-culture.html)
Gore Case Study (https://www.academia.edu/964711/Classic_Case_6_WL_Gore_and_Associates_Inc)

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