It’s hard to talk about management innovation without tipping your hat to W.L. Gore, the venerable maker of Gore-Tex and a host of other pioneering materials and products as diverse as synthetic vascular grafts, Elixir guitar strings, and Glide dental floss. Lauded as "the world's most innovative company" time and time again, Gore's wholly original (and endlessly inspirational) model for creating a true democracy of innovation is firmly rooted in the story of founder Bill Gore. More than half a century ago, in 1958, Bill Gore quit DuPont to start a business aimed at imagining and commercializing new uses for polytetrafluoroethylene (PTFE)—the material popularized as Gore-Tex. But he wasn't simply interested in inventing new materials or selling products, he was bent on creating an entirely new kind of company—one that unleashed and inspired every person in it, one that put as much energy into finding the next big thing as milking the last big thing, one that was robustly profitable and uniquely human.
Bill Gore concevied of W.L. Gore as a kind of experiment in management innovation—one that is still ongoing. The questions that drove him at founding are crucial questions managers everywhere must grapple with today: Was it possible to build a company with no hierarchy—where everyone was free to talk with everyone else? How about a company where there were no bosses, no supervisors, no managers and no vice presidents? Could W. L. Gore preserve a sense of family and collegiality even as it scaled? Could you create a company with no “core” business, one that was as focused on creating the future as on preserving the past? The answers to each of these questions was an emphatic "Yes!" And Gore quickly became a model for both organizational and product innovation (not to mention a remarkable business success). What's truly remarkable is Gore's energy and engine for the continuous pursuit of the answers to those questions. Even as Gore strives to push to the next innovative edge, it's instructive and inspiring to unpack the philosophies and practices that form the core of its original and powerful formula for success.
The Gore Culture
Bill Gore built the company on a set of principles and beliefs that guide Gore associates in the decision making they make, the work they do, and their behavior toward others. They are the basis for a culture that binds together a worldwide organization.
- Fundamental beliefs: Belief in the individual to do what's right for the company; our organization harnesses the fast decision-making, diverse perspectives, and collaboration of small teams; "we're all in the same boat," sharing risks and rewards and committed to what's best for the company an dits long term success; we take a long-term view, basing our investment decisions on long-term payoff and not sacrificing our values for short-term gain
- Guiding principles: freedom - for associates to achieve their own goals best by directing their efforts to the success of the corporation, to take action, to come up with ideas, to make mistakes as part of the creative process, to encourage each other to grow; fairness - we each sincerely try to be fair with each other, our suppliers, our customers and anyone else with whom we do business; commitment - we each make our own commitments and keep them; waterline - everyone at Gore consults with other associates before taking actions that might be "below the waterline," causing serious damage to the company
Bill Gore’s views were influenced by the then new best seller by Douglas McGregor, The Human Side of Enterprise. In it, he defined Theory X and Theory Y as two ends of a management continuum based on very different views of human nature. Theory X, influenced by Taylor’s “scientific management” approach, manifested in the prevalent command-and-control model. Theory Y, influenced by Maslow’s motivation theories, argued for a new, more participative and empowering model. Bill also was inspired by some of his experiences at DuPont. One revelation was that “communication really happens in the carpool,” (Fast Company) where people could feel free to talk openly without bosses around. The other was that task forces, given free rein to solve a problem, were great at making breakthroughs.
A lattice, with self managed teams
Bill conceived of the company as a “lattice” connecting every individual in the organization to every other. In traditional organizations, it existed as an informal network of relationships underlying the formal hierarchy. At Gore, there would be no layers of management, information would flow freely in all directions, and personal communications would be the norm. And individuals and self-managed teams would go directly to anyone in the organization to get what they needed to be successful.
As Gore has grown, it has imposed some structure: the CEO, four major divisions, a number of product-focused business units, and the usual business support functions, each with a recognized leader. But it is flat, with self-managed teams as the basic building blocks, and no management layers. It doesn’t have an organization chart, and resists titles. Job descriptions are general and Gore employees generally refer to each other as associates; specific roles are negotiated within teams. Relationships are paramount at Gore, within the company and with customers and suppliers.
How can that possibility work with an organization of 9,000 employees located in 30 countries worldwide? Gore’s commitment to keeping its operations small and informal is one key. It generally doesn’t allow a facility to grow to more than 200 people. That reflects another of Bill’s beliefs: that once a unit reaches a certain size, “we decided” becomes “they decided.” And it mobilizes its plants into clusters, like the 10 factories located in Flagstaff. Gore maximizes opportunities for cross-functional collaboration by having R&D specialists, engineers, salespeople, engineers, chemists and machinists work in the same plant. Even Gore’s headquarters has remained simple and intimate: several dozen low-rise buildings built not far from Bill’s house in the Delaware countryside, each housing small, autonomous teams. As Gore has expanded geographically, email and the like have become necessary. But even so, global teams are brought together on a fairly regularly basis, to build and sustain relationships.
Commitments, not assignments
Gore believes that if you’re passionate about your work, you’re naturally going to be highly self-motivated. It also has not forgotten Bill Gore’s adage that “authoritarians cannot impose commitments, only commands.” So at Gore, rather than having someone tell you what to do, you get to decide what to work on and where you can make the greatest contribution, as part of a team. Individuals at Gore negotiate job assignments and responsibilities with their peers, depending on what a team is working on. You can always say “no,” but once you’ve made a commitment, it’s a near sacred oath. You’re accountable to your team. The negotiating process can be time-consuming, but Gore believes the payoff is worth it, in morale and in the bringing together of the diverse perspectives and talents needed for success. People are assumed to be multifaceted so they are not expected to devote 100% of their time to one project. Typically, within a few months of joining their first teams, new associates will be encouraged to add a second or third project. The personal challenge: the scope for contribution and the pressure to contribute can be both exhilarating and exhausting.
For a newcomer, especially one accustomed to life in the traditional corporate world, all this can be somewhat daunting. One associate recalled: “When I arrived at Gore, I didn’t know who did what. I wondered how anything got done here. It was driving me crazy.” She also didn’t know how to work without someone telling her what to do, and kept asking “Who’s my boss?” “Stop using the B-word,” she was told. She also saw that people didn’t fit into pre-defined job slots; they had team commitments that often combined roles traditionally done by different departments. It took a long time to get to know people and what they did, and to earn the credibility and trust required to be given responsibilities. But she did, and eventually went on to become what she calls a “category champion.” Her experience is the norm. Another associate with 20 years of experience on multiple teams, observed: “You join a team and you’re an idiot…It takes 18 months to build credibility. Early on, it’s really frustrating. In hindsight, it makes sense.” (Fast Company)
Sponsors and leaders, not “bosses”
Gore’s philosophy is that individuals don’t need close supervision; what they need is mentoring and support. Each new associate is assigned a sponsor to decode the jargon, demystify the lattice, and circulate him or her among several teams, helping find a good fit between his or her skills and the needs of a particular team. A sponsor makes a personal commitment to an associate’s development and success. As the organization has grown, teams of sponsors have begun to meet annually, to take a broader look at the possibilities for the associates under their guidance. Associates are free to seek out a new sponsor if they wish.
Gore also believes that leadership has to be earned. It embraces what it calls “natural leadership.” Leaders at Gore gains influence by developing a track record for getting things done, and excelling at team building. They have to be talent magnets. As one associate explained “We vote with our feet. If you call a meeting and no one shows up, you’re probably not a leader because no one is willing to follow you.” Once in a leadership role, that person’s job is to strengthen and make his or her team and colleagues successful. Because Gore associates are involved with multiple teams, they may a leader on one and a regular member on another.
It is worth noting that Gore remains faithful to its philosophy of natural leadership at the highest level of the organization. When Chuck Carroll, Gore’s previous CEO, retired in 2005, the board polled a wide cross-section of Gore employees asking who they’d be willing to follow. They weren’t given a list of names; they could nominate anyone in the company. One of those employees was Terri Kelly, who had joined Gore in 1983 immediately after graduating from the University of Delaware with a degree in mechanical engineering. To Terri’s surprise, the new CEO turned out to be her.
Teams are coming together, forming, storming, building relationships, and making decisions at Gore all the time. As Terri explained, the challenge of the distributed leadership model is to avoid chaos:
"First of all, there are norms of behavior and guidelines we follow… Every associate understands how important these values are, so when leaders make decisions, people want to understand the “why.” They know they have the right to challenge, they have the right to know why this decision is the right one for the company… [O]ur leaders have to do an incredible job of internal selling to get the organization to move. The process is sometimes frustrating, but we believe that if you spend more time up front, you’ll have associates who are not only fully bought-in, but committed to achieving the outcome. Along the way, they’ll also help to refine the idea and make the decision better." (You can read and hear more from Terri on her MIX Maverick blog and video series here.)
Motivating the “right” behaviors
Gore strives to be egalitarian and performance-driven in evaluating and rewarding people. In most companies, seniority will buy you a raise. Cosy-ing up to your boss may help. Not so at Gore. At Gore, everyone’s your boss. Everyone is ranked by their peers, people who know what they’ve done and how they’ve interacted with others on a daily basis; and their compensation will be based on that. That’s a powerful motivator to contribute. Here’s how Gore’s performance evaluation and compensation system works:
- No specific criteria are provided; people are just asked to indicate who’s making the biggest contribution to Gore’s success.
- An associate typically is evaluated by 20-30 peers and will, in turn, evaluate 20-30 peers. They are forced rankings, from top to bottom, and only for people you know.
- A cross-functional committees of individuals with leadership roles discuss the results, and develop an overall ranking from 1-20 of these particular associates.
- In setting compensation, they make sure the pay curve is aligned with contributions.
The most powerful manifestation of “we’re all in the same boat” is that all associates are part owners of the company through the associate stock plan. Gore believe that it not only allows everyone to share in the risks and rewards of the company, but also gives them an added incentive to stay committed to its long term success, and always consider what’s in the best interest of the company when making decisions.
A market for new ideas
A seminal moment in Gore’s history came in 1969 when Bill’s son, Gore’s current chairman, stumbled across a way to stretch PFTE into a durable, porous material that subsequently was trademarked as Gore-Tex. That proved it: buttoned-down engineers could be mavericks! Since then, that notion of experimental innovation has been baked into the organization through “dabble time.” All associates have about 10% of their work week free to dabble, to work on an initiative of their own choosing – assuming they are fulfilling their primary commitments. Someone with what they think is a breakthrough idea becomes a product champion, and must compete for talented individuals’ dabble time, to work on his or her project. If he or she can’t rally a team, maybe it’s not such a great idea, or needs refinement. One important point: Gore is only interested in ideas that are “unique and valuable;” not “me too” products.
Gore’s guitar string business is an oft-told example. It got its start when Dave Myers, an engineer principally engaged in developing cardiac implants, put PTFE on his mountain-bike cables for a grit-repellent coating. Pleased with the results, he thought it might also work for guitar strings, which lose tonal qualities as skin oils build up, and decided to use his dabble time to pursue the idea, though Gore had no products in the music industry at the time. Based in a grouping of ten plants, he pulled together a team of volunteers that spent the next three years working on the idea, without ever seeking formal endorsement. That required finding low cost ways to experiment. They hit pay dirt with a string that held its tone three times longer than the industry standard. Today, Gore’s ELIXIR guitar strings outsell competitors’ two-to-one.
In recent years, Gore has formalized the process somewhat, while remaining open to all new ideas. After the dabble stage, the development team periodically undergoes a three-stage, cross-functional review process called “Real, Win, Worth.” Is the opportunity real? Is there really somebody out there that will buy it? Can we win in the marketplace? What do the economics look like? Can we make money? Is it unique and valuable? Can we have a sustained advantage, say, patent protection? (Fortune) There is no predetermined timetable; the focus is on giving product champions time to experiment and learn, and taking small risks rather than betting the ranch too early. It’s a way to organize for innovation, rather than plan for innovation, with a long-term view.
It’s worth noting that Gore’s tenacity to bring ideas to life has caused it to stretch beyond its core technology competence to develop marketing prowess as well. Intel’s “Intel Inside” computer stickers essentially copied Gore’s Gore-Tex branding of the laminated fabrics it sells to apparel manufacturers. And when consumer products manufacturers were disinterested in its technology for a superior dental floss—for 20 years!—Gore took Glide to market itself. It built a following by giving free samples to dentists and hygienists, who passed them along to patients; an early example of viral marketing.
Is Gore a good fit for you?
That’s the question Gore asks prospective employees, because that’s what it’s all about, bringing in and then nurturing talented individuals who can thrive in the Gore culture. Gore is careful about who it hires, and those hires end up being a fraction of a percentage of applicants. As one Gore associate explained: “Gore is not for everyone. Our process for finding the right talent involves a certain degree of self-selection, which means we want job applicants to have enough information to decide that a career at Gore may not be the right fit after all.”
In 2009, the company unveiled a “Join Gore and Change Your Life,” a global brand campaign designed to attract potential job applicants and build a talent pool for the future. Its foundation was a career microsite (gore.com/change-life), and it also included print and online advertising, job boards, niche websites, and college career platforms. The site asks potential applicants to ask themselves eight questions, to honestly evaluate if the qualities Gore is looking for apply to them:
1. Experiment with different approaches or solutions to problems to improve the way things are done?
2. Challenge traditional thinking and identify creative approaches or solutions?
3. Maintain a high standard of performance in uncertain or unstructured situations?
4. Work effectively with others who have different perspectives, talents, backgrounds, and/or styles?
5. Assess your personal strengths and development needs and take responsibility for creating your own development plan to address them?
6. Voice differences of opinion openly and directly?
7. Actively promote collaboration, cooperation, and teamwork to ensure the best business results?
8. Encourage and help others to grow in knowledge, skills and scope of responsibility?
The site also provides an inside look at Gore by sharing testimonials of Gore associates and their work on three successful projects. Each story features a product innovation that changed the world in a positive way:
- Join Gore and change music: The ELIXIR strings story… inventing a new kind of guitar string
Imagine a job where you can follow your passion and apply your knowledge to develop a revolutionary product in a new industry for your company
- Join Gore and change lives: The GORE HELEX Septal Occular story… inventing material to patch human hearts
Imagine a job where you can apply your technical know-how to create a new product that changes and saves the lives of others
- Join Gore and change industries: The CROSSTECH Fabrics story… inventing material that protects firefighters from heat, flames, and hazardous materials
Imagine a job where you can immerse yourself in a highly specialized field to change an industry – and improve the protection and comfort of those who save lives
Each story is presented from the perspective of different team members, who have varied backgrounds and play complementary roles on the projects. Their testimonials offer a personal perspective on working at Gore, including explanations of why it’s a good fit for them, and how they get satisfaction from it.
Not surprising, hiring decisions at Gore are made by a small team of associates. The team typically includes people the candidate would be working with day-to-day as well as leaders and others with experience in his or her field. One individual, interviewing for a quality engineer position, described his session as friendly with a lot of behavioral and technical questions. Asked what design changes he would make to fix the problem of a diving board that bended too easily, he found himself drawing diagrams and graphs to explain things.
Challenge: How to scale Gore’s management model as it grows… in size, across geographies and cultures, into new product/market segments
- Solution: The main job of leaders at Gore is to make the rest of the organization successful and a big part of that is ensuring the culture is healthy and working to support innovation, and the management model adapts to change.
- “We asked that question [about scalability] at 50 associates… at 500… we’ll ask it again at 10,000.”
- “Our management model helps us scale because, because we’re not relying on a few centralized, enterprise leaders to make all the key decisions. Instead, we push authority out to operating teams that are much better equipped to make the right decision at the right moment.”
- “We’re still evolving. We haven’t figured it all out.”
- Solution: Gore’s values, particularly its respect for diverse perspectives and talent for bringing together individuals with different backgrounds and styles, will serve it well as its teams become increasingly global – the Gore model is even more radical outside the U.S.! – and it partners with large, traditional corporations on new product initiatives.
- Over 1000 products designed to improve quality of life; revenues to an estimated $3 billion; consistently profitable
- In 2010, named one of the “100 Best Companies to Work For” in the US by FORTUNE magazine… for the 13th consecutive year
- Named one of the best workplaces in France, Germany, Italy, the UK, Sweden, and Spain
- In 2009, included on the “Fast 50” list of Fast Company magazine’s “Most Innovative Companies in the World”
- Cited as an example of a successful and innovative company by many business and management experts
- Peter Skarzynski and Rowan Gibson, Innovation to the Core, Harvard Business Press, 2008
-Alan Deutschman, Change or Die: The Three Keys to Change at Work and in Life, Regan Books, 2007
-Gary Hamel, The Future of Management, Harvard Business Press, 2007
-R. Keith Sawyer, Group Genius: The Creative Power of Collaboration, Basic Books, 2007
-Jim Collins, Good to Great: Why Some Companies Make the Leap... And Others Don't, HarperCollins, 2001
Believe in people
It’s important to remember that Bill Gore’s vision of a new way to run a company rested on a different perception of why and how people work in organizations. He rejected the notion that were fundamentally lazy and needed to be told what to do; he trusted them to be engaged in their work, if allowed to work on something they were passionate about and to achieve goals they believed in. Do you really believe that? Are you willing to bet your business on it? Because at the end of the day, Bill Gore wasn’t interested in simply creating a happy work place. The objective was to make money and have fun.
Lead with (and live) your values
When Gore associates and leaders describe “the Gore way,” it always seems to come back to the company’s values. They are clearly defined and universally understood. And people “walk the talk,” every day. Companies interested in emulating Gore’s model will need to take a hard look at the values that are embedded in their companies: What philosophies and beliefs do they reflect? What kinds of decisions – big and small – and behaviors do they encourage? Are they “baked into” your culture? Do they need to change? Articulating great values and then not following through is one of the worst things a company can do. People will get cynical, fast.
Take the long view
Taking a long-term view towards its investments in technology and product development is one of Gore’s hallmarks. But the same can be said of its management model, which is one reason why it may be a hard sell for executives interested in adopting it. Is Gore’s approach to plant location the most cost effective? Its practice of having associates spend months simply acclimating to a new team? Sacrificing dedicated work time to “dabbling?” Of course not. But Gore sees it as a long-term investment in its ability to foster employee growth and innovation, difficult though that may be to quantify. Its HR leader explains it this way: "I often compare our organizational structure to a democracy to explain the tradeoffs. A democratic government might not be the most time- or cost-effective way to run a country. In the end, however, the quality of life is far better than what you’ll find in a dictatorship."
When Bill set about building his new organization, he didn’t stop with teams and personal communications. And he didn’t take a piecemeal approach. He had an organization vision and put in place all the elements required to achieve it – a management structure that placed decision making authorities with teams; a redefinition of the role of leadership; a way of allocating and doing work that would bring out the best in every employee; performance management systems for aligning individuals’ and the organization’s goals; processes and practices to bring in and nurture the “right” talent; time and patience and freedom to innovate, even if that meant making mistakes; supporting mechanisms like communication and physical facilities; and of course, a value system to keep everyone on the same page. Tinkering with parts of an organization may yield improvements, or may just be frustrating if they run up against other aspects of the organization that are out of synch. It’s easier to start with a clean slate, of course. But it’s also possible to experiment. Are you ready to be bold?
It’s not an option
Gore attributes a large part of its success in product and market innovation to its still radical and always evolving management model. Internal surveys show that Gore’s people almost universally regard it as a source of competitive advantage. The company’s business record speaks for itself. Gore also recognizes that demographics are changing and young associates expect things like an opportunity to make an impact, and a collaborative work environment where information is freely shared. And attracting, growing and inspiring top talent is what it’s all about at Gore.
- W.L.Gore: An Innovation Democracy, from The Future of Management, Gary Hamel, Harvard Business School Press, 2007
- W.L. Gore: Lessons from a Management Revolutionary, Gary Hamel, Wall Street Journal 3/18/2010
- W.L. Gore: Lessons from a Management Revolutionary, Part 2, Gary Hamel, Wall Street Journal 4/2/2010
- The Fabric of Creativity, Alan Deutschman, Fast Company 12/19/2007
- Who’s Afraid of a New Product? Not W.L. Gore. It has mastered the art of storming completely different businesses, Ann Harrington, Fortune 11/10/2003
- Terri Kelly on MIX