A company with 10,000 employees & $3.2 billion in revenue that has consistently 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 is not appointed by the board, but chosen by peers.
And if you think this company can’t possibly be in business for long; William (Bill) L. Gore and his wife Viev started it in 1958. Their company, W.L Gore & Associates 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 profitable every year since their foundation? So how do they do it?
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.
It turned out the answer is a resounding “Yes!”
Acknowledge knowledge workers
At WL Gore & Associates they are very aware that every employee working there is a knowledge worker and that that requires a completely different 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.
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 can’t 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:
“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 different types of leaders at many different levels. Some of them are:
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.
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 to make the commitments necessary for success.
The associate who proposes necessary objectives and activities and seeks agreement and team consensus on objectives. This leader is perceived by the team membership as having a good grasp of how the objectives of the team fit in with the broad objective of the enterprise. This kind of leader is often also the “commitment seeking” 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 and reports changes in compensation to individual associates. This leader is often also a compensation sponsor.
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.
Help coordinate activities of people within a plant/business/functional area.
Help coordinate activities of people in different businesses and functions and who try to promote communication and cooperation among all associates.
Are those people who organize new teams new businesses, new products, new processes, new devices, new marketing efforts, new or better methods of all kinds. These leaders invite other associates to “sign up” for their project.
WL Gore & Associates does have a CEO. The current CEO Terri Kelly was voted by her peers into the job in 2005. You read that right: Voted. By her peers.
And even as a CEO she can’t tell anyone in the company what to do. And that is a good thing. In her own words:
“I think it’s 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.
Keep it small
One day Bill Gore drove into work when he realized that he did not know everyone in the plant. Realizing 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 Dunbar’s 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 confirmed that that is indeed roughly the average amount of people we can form meaningful relationships with.
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 one’s 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 profitability 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 figure out if it is worth investing. At Gore they do more structured financial planning these days than before, but even that is a consensus based approach.
They are in it for the long-term.
Failure is a part of innovating. And one you can’t do without. As Edison remarked on his quest to find the right material for the light bulb:
I have not failed. I’ve just found 10,000 ways that won’t work.
Thomas A. Edison
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-fulfilling prophecy.
Gore has this thinking firmly 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: