Describe how W.L. Gore operates in terms of management, leadership, organizational structure, and organizational design..
W.L. Gore and Associates (W.L. Gore) is a successful company that uses non-traditional management processes, leadership concepts, organizational structure, and organizational design.
Describe how W.L. Gore operates in terms of management, leadership, organizational structure, and organizational design.
· What lessons from W.L. Gore could be applied to work groups, such as project teams, virtual teams, and contractual and contingent workforces?
· What lessons from W.L. Gore should not be applied to work groups, such as project teams, virtual teams, and contractual and contingent workforces?
Your well-written paper should meet the following requirements:
· Be five pages in length.
· Be formatted according to the APA
· Include at least six scholarly or peer-reviewed articles.
· Include a title page, section headers, introduction, conclusion, and references page.
Management practices at W.L.Gore & Associates give a new dimension to employee empowerment. Other organizations can learn from the experience.
To make money and have fun.
Words like “self-management” and employee “empowerment” are quickly becoming the contemporary battle cry of American industry. The emphasis has shifted from a focus on management control of employees to a decentralization of power and the provision of opportunity for workers, at all levels, to exercise increasing influence over themselves.
The idea behind employee self-management, as the term implies, is for workers to become, to a large degree, their own managers. In attempting to use their human resources more fully, many organizations have moved beyond the mentality that managers make decisions and employees are simply expected to do what they’re told. Self-management involves an increasing reliance on workers’ creative and intellectual capabilities, not just their physical labor.
Although questions may linger about how to put this once-radical idea into practice, self-management is clearly becoming a respected competitive advantage. In many companies, organizing work around small groups of workers empowered to perform many traditional management functions (assigning tasks, solving quality problems, and selecting, training, and counseling fellow team members) has become a way of life. Applications of the team approach have spanned industries and taken root in a variety of manufacturing and service organizations. These include some of the best-known companies in the world–Procter and Gamble, General Motors, Ford, Digital Equipment, IDS, Honeywell, Cummins Engine, Tektronix, General Electric, Caterpillar, Boeing, and LTV Steel, to name just a few. Reports from the field credit this work design innovation with many positive benefits, including higher productivity, better attendance, less turnover, and improvements in both product quality and the quality of working life for employees.
In many ways, empowered worker teams seem to be emerging as the major new American industrial weapon to fend off international competitive threats from such countries as Japan. The team approach has become highly visible: Conferences center on the concept, consultants specialize in applying it, and well-known business publications (Business Week and Fortune, among others) make it cover-story news. In fact, it has become visible to the point that companies may begin to conclude that this is the only way to successfully meet the business pressures in the 1990s and on into the 21st Century, especially when those pressures demand fuller involvement and utilization of human resources.
Almost always, employee self-management is introduced in organizations through the establishment of formally designated empowered work teams. When employees are hired, they are assigned to a work team as a condition of their employment.
In this article we will suggest an alternative: An approach that promises to deliver many of the advantages and benefits of formally established empowered employee work teams– but without formally designated teams. Instead the whole work operation becomes essentially one large empowered team in which everyone is individually self-managing and can interact directly with everyone else in the system. To illustrate this alternative, we will describe W. L. Gore & Associates, a company that relies on self-developing teams without managers or bosses–but with lots of leaders.
W. L. Gore & Associates is a company that evolved– personally, organizationally, and technically–from the late Wilbert L. Gore’s experiences. He was born in Meridian, Idaho (near Boise) in 1912. By age six, he had become an avid hiker. He received a bachelor of sciences degree in chemical engineering in 1933 and a master of sciences in physical chemistry in 1935, both from the University of Utah. After working for two other companies, he joined E. I. DuPont de Nemours in 1945, where he held several positions, including research supervisor and head of operations research. While at DuPont he worked on a team to develop applications for polytetrafluoroethylene, frequently referred to as PTFE in the scientific community and known as “Teflon” by consumers. On this team, Wilbert Gore (called Bill by everyone) felt a sense of excited commitment, personal fulfillment, and self-direction. He was knowledgeable about the development of computers and transistors and felt that PTFE had insulating characteristics ideal for use with such equipment.
He tried a number of ways to make a PTFE-coated ribbon cable without success. A breakthrough came in his home basement laboratory. He was explaining the problem to his son, Bob. Bob had seen some PTFE sealant tape made by 3M and asked, “Why don’t you try this tape?” The senior Gore explained that everyone knows you can’t bond PTFE to itself.
Bob went on to bed, but his father lingered in the basement lab, willing to try “what everyone knew would not work.” At about 4 a.m., he walked into his son’s room waving a small piece of cable. “It works, it works!” he shouted. The following night father and son returned to the basement lab to make ribbon cable coated with PTFE.
For the next four months Bill Gore tried to persuade DuPont to make a new product–PTFE-coated ribbon cable. By this time in his career, Bill Gore knew some of the decision makers at DuPont. After some preliminary discussions, it became clear that DuPont wanted to remain a supplier of raw materials and not a fabricator. Consequently, Bill began to discuss with his wife, Genevieve, known as “Vieve,” the possibility of starting their own insulated-wire and cable business. On January 1,1958, their twenty-third wedding anniversary, they founded W. L. Gore & Associates. The basement of their home served as the first facility. After finishing their anniversary dinner, Vieve turned to her husband of twenty-three years and said, “Well, let’s clear up the dishes, go downstairs, and get to work.”
Bill Gore was forty-five years old with five children to support when he left DuPont. He left behind a career of seventeen years, a good salary, and secure position. To finance the first two years of the business, Bill and Vieve mortgaged their house and took $4,000 from savings. All of their friends told them not to do it.
The first few years were rough. In lieu of salary, some of the employees accepted room and board in the Gore home. At one point eleven employees were living and working under one roof. A few years later, the Gores secured an order for $100,000 that put the company over the hump.
W. L. Gore & Associates has continued to grow and develop new products derived primarily from PTFE, including its best-known product, GORE-TEXRegistered Trademark. Today W. L. Gore makes a wide range of products in four categories — electronic, medical, fabrics, and industrial products. In 1986, Bill Gore died while backpacking in the Wind River Mountains of Wyoming. Before he died he had become chairman, and his son,Bob, president, a position the latter continues to occupy. Vieve remains as the only other officer, secretary-treasurer.
As in many organizations, the early experiences of the founder continue to mold the corporate operations and culture. As will be illustrated a number of times, the informal, non-bureaucratic, low-overhead style that characterized the company at its founding has stuck–even though the firm now has over 5,000 employees and is rapidly approaching $1 billion in sales.
ORGANIZATION WITHOUT BOSSES: EMPLOYEE EMPOWERMENT BASED ON SELF-INITIATED TEAMWORK
W. L. Gore & Associates is a company without titles, hierarchy, or any of the conventional structures associated with enterprises of its size. The titles of president and secretary-treasurer are used only because they are required by the laws of incorporation. The Gore management style has been referred to as “un-management,” an approach to managing that has its roots in Bill’s experiences on teams at DuPont and that evolved over time to adapt to current needs.
For example, in 1965 W. L. Gore & Associates was a thriving and growing 200-employee company with a facility on Paper Mill Road in Newark, Delaware. One warm Monday morning in the summer, Bill Gore was taking his usual walk through the plant, when he suddenly realized he did not know everyone. The team had become too big. As a result, the company developed a policy that no facility could have more than 150 to 200 employees, thus giving birth to a distinctive expansion strategy: “Get big by staying small.” The purpose of maintaining small plants is to accentuate a close-knit and interpersonal atmosphere.
Today, W. L. Gore & Associates consists of 44 plants worldwide with over 5,300 associates (the term used instead of “employees,” and always spelled with a capital A in company literature). In some cases the plants are clustered together on the same site, as in Flagstaff, Arizona, where the company operates four plants on the same site. Twenty-seven of those plants are in the United States and seventeen are overseas (locations include Scotland, Germany, France, and Japan).
Compensation at W. L. Gore & Associates takes three forms– salary, profit sharing, and an Associates’ Stock Ownership Program, or ASOP (legally similar to an employee stock ownership plan, or ESOP). Entry-level salaries are in the middle ranges for comparable jobs in the industry. According to Sally Gore, daughter-in-law of the founder, “We do not feel we need to be the highest paid. We never try to steal people away from other companies with salary. We want them to come here because of the opportunities for growth and the unique work environment.” Associates’ salaries are reviewed at least once a year and more commonly, twice a year. For most workers, the reviews are conducted by a compensation team drawn from individuals at the employee’s work site. All associates have sponsors who act as their advocates during this review process. Prior to meeting with the compensation committee, the sponsor checks with customers (or whoever uses the results of the person’s work) to find out what contribution has been made. In addition, the evaluation team will consider the associate’s leadership ability and willingness to help others develop to their fullest.
W. L. Gore has profit-sharing and ASOP plans for all associates. Profit sharing typically occurs twice a year, but is dependent on profitability. The amount awarded to each associate is based on his or her time in service and annual rate of pay. In addition, the firm buys company stock equivalent to 15 percent of the associates’ annual income and places it in an ASOP retirement fund. Bill wanted the associates to feel that they were owners, and after being with Gore for one year, each associate does indeed become a stockholder.
The principle of commitment is seen as a two-way street. W. L. Gore & Associates tries to avoid layoffs. Instead of cutting pay, seen as disastrous to morale, the company has used a system of temporary transfers within a plant or cluster of plants, as well as voluntary layoffs.
It should be clear that Gore is an unusual company by many standards. It has also been a highly successful and profitable company. In fact, it has been profitable for 31 straight years. Sales jumped from $6 million in 1969 to $660 million in 1990, the growth financed entirely without debt.
Some of the primary features that characterize Gore will be summarized in the following pages as a series of organizational themes. We will draw from these themes to prescribe some possible lessons for organizations that want to enjoy some of the benefits that Gore has obtained. Those benefits apparently stem largely from the company’s distinctive employee-empowerment centered approach to managing (or “unmanaging”) an organization.
Bill Gore wanted to avoid smothering the company in thick layers of formal “management,” feeling that such layers stifled individual creativity. As the company grew, he knew it had to find ways to assist new people in getting started, as well as ways to follow their progress– a particularly important concern in compensation decisions. Thus, the firm developed its “sponsor” program. When people apply to W. L. Gore, personnel specialists conduct an initial screening, as in most companies. Those candidates who meet the basic criteria then interview with selected associates. Before anyone is hired, an associate must agree to be the new employee’s sponsor– no sponsor, no job. The sponsor is to take a personal interest in the new associate’s contributions, problems, and goals, and to serve as both coach and advocate. The sponsor tracks the new associate’s progress, providing help and encouragement, and coaching the new member to correct weaknesses and concentrate on strengths. Sponsoring is not a short-term commitment. All associates have sponsors and many have more than one. When an individual is initially hired, the sponsor comes from that person’s immediate work area. If he or she moves to another area, a new sponsor will be appointed from that work area. As associates’ responsibilities grow, they may acquire additional sponsors.
Because the sponsor program goes beyond conventional views of what makes a good associate, some anomalies occur in the hiring practices. Bill Gore proudly told the story of “a very young man” of eighty-four who walked in, applied for a job, and spent five very good years with the company. The individual had thirty years of experience in the industry before joining Gore. His other associates had no problems accepting him, but the personnel computer did. It insisted that his age was 48. As in this example, the Gore system of “unmanagement” attracts individuals from diverse backgrounds and creates unique success stories.
An internal memo by Bill Gore described the three kinds of sponsorship he expected, and how each might work in practice:
1. The sponsor who helps a new Associate get started on his job. Also, the sponsor who helps a present Associate get started on a new job (starting sponsor). 2. The sponsor who sees to it that the Associate being sponsored gets credit and recognition for contributions and accomplishments (advocate sponsor).
2. onsor who sees to it that the Associate being sponsored is fairly paid for contributions to the success of the enterprise (compensation sponsor).
A single sponsor can perform any one or all three kinds of sponsorship. A sponsor is a friend and an Associate. All the supportive aspects of the friendship are also present. Often (perhaps usually) two Associates sponsor each other as advocates.
In addition to the sponsor program, Gore asks its associates to follow four guiding principles:
1. Try to be fair.
2. Use your freedom to grow.
3. Make your own commitments, and keep them.
4. Consult with other Associates prior to any action that may adversely affect the reputation or financial stability of the company.
The four principles are often referred to as Fairness, Freedom, Commitment, and Waterline. The waterline terminology is drawn from a ship analogy. If someone pokes a hole in a boat above the waterline, the boat will be in relatively little real danger. If someone, however, pokes a hole below the waterline, the boat is in immediate danger of sinking. In other words, associates can (and are encouraged to) make decisions on their own as long as the downside risk does not threaten the organization’s survival.
The operating principles were put to a test in 1978. By this time, word about the qualities of GORE-TEX fabric were being spread throughout the recreational and outdoor markets, and shipments began in volume. Then it happened. At first, a few complaints and occasional returns. Finally, large amounts of the clothing were being returned. GORE-TEX was leaking. Having high-quality waterproof products was one of the two major characteristics responsible for GORE-TEX’s success, and the company’s reputation and credibility were on the line.
Peter W. Gilson, who led Gore’s fabric division, said of the situation, “It was an incredible crisis for us at that point. We were really starting to attract attention, we were taking off–and then this.” In the next few months, Peter and his associates made a number of those “below the waterline” decisions.
First, the researchers determined that certain oils in human sweat were responsible for clogging the pores in GORE-TEX fabric and altering the surface tension of the membrane. Thus, water could pass through. They also discovered that a good washing could restore the waterproof property. At first, this solution, known as the “Ivory Snow Solution”, was accepted.
A single letter from “Butch”, a mountain guide in the Sierras, changed the company’s position. Butch wrote that he had been leading a group and “my parka leaked and my life was in danger”. As Gilson says,”That scared the hell out of us. Clearly our solution was no solution at all to someone on a mountain top”. All of the products were recalled. As Gilson says,”We bought back, at our own expense, a fortune in pipeline material. Anything that was in stores, at the manufacturers, or anywhere else in the pipeline.”
In the meantime, Bob Gore and other associates set out to develop a permanent fix. One month later, a second generation GORE-TEX fabric had been developed. Gilson, furthermore, told dealers that if at any time customer returned a leaky parka, they should replace it and bill the company. The replacement program alone cost Gore roughly $4 million.
W.L. Gore & Associates has been described as not only unmanaged, but also as unstructured. Bill Gore referred to the structure as a lattice organization. (See Exhibit 1.) The primary characteristics of this structure are:
1. Lines of communication are direct–person to person–with no intermediary.
2. There is no fixed or assigned authority.
3. There are sponsors, not bosses.
4. Natural leadership is defined by followership.
5. Objectives are set by those who must “make them happen.”
6. Tasks and functions are organized through commitments.
The structure within the lattice is complex and evolves from interpersonal interactions, self-commitment to responsibilities known within the group, natural leadership, and group-imposed discipline.
Bill Gore once explained this structure by saying,”Every successful organization has an underground lattice. It’s where the news spreads like lightning, where people can go around the organization to get things done.” Another phenomenon within the lattice is the constant formation of temporary cross-area groups. In other words, Gore has “teams without formally designated teams.” The cross-level and cross-functional interpersonal accessibility created by this structure enables all kinds of teams to self-develop, as specific needs arise. Associates can team up with other associates, regardless of area, to get the job done. When a puzzled interviewer told Bill that he was having trouble understanding how planning and accountability worked, Bill replied with a grin,” So am I. You ask me how it works. [The answer is, it works] every which way.”
The lattice structure does have some similarities to traditional management structures. For instance, thirty to forty associates who make up an advisory group meet every six months to review marketing, sales, and production plans. As Bill Gore has conceded, “The abdication of titles and rankings can never be 100 percent.”
One thing that strikes an outsider is the informality and pervasive sense of humor. Words such as “responsibilities” and “commitments” are, however, frequently used in meetings. This is an organization in which members take what they do seriously, but not themselves.
For a company of its size, Gore may have the shortest organizational pyramid found anywhere. The pyramid consists of Bob Gore, the late Bill Gore’s son, as president, Vieve, Bill Gore’s widow, as secretary-treasurer, and all others–the associates. (Words such as employees, subordinates, and managers are taboo in the Gore culture.)
One of Bill Gore’s internal memos described the kinds of leaders that would be needed and the roles they were to play. (Note how he frequently used the term “team”, yet his organization then and now is based on the lattice structure, not formally designated teams–again, the team approach, but with self-developing rather than formalized teams.)
1. The Associate 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.
· 2. The Associate the team looks to for coordination of individual activities in order to achieve the agreed-upon objectives of the team. The role of this leader is to persuade team members to make the commitments necessary for success (commitment seeker).
· 3. The Associate who proposes necessary objectives and activities and seeks agreement and team consensus on objectives. This leader is perceived by the team members as having a good grasp of how the objectives of the team fit in with the broad objective of the enterprise. This kind of leaders is often also the “commitment seeking” leader in 2 above.
· 4. The leader who evaluates the relative contributions 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 then also a compensation sponsor.
· 5. 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. These leaders are usually called product specialists. They are respected for their knowledge and dedication to their products.
· 6. Plant leaders who help coordinate activities of people within a plant.
· 7. Business leaders who help coordinate activities of people in a business.
· 8. Functional leaders who help coordinate activities of people in a “functional” area.
· 9. Corporate leaders who help coordinate activities of people in different businesses and functions and who try to promote communication and cooperation among all Associates.
· 10. Intrapreneuring Associates who organize new teams for 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.
It is clear that leadership is widespread in our lattice organization and that it is continually changing and evolving. The reality that leaders are frequently also sponsors should not confuse the fact that these are different activities and responsibilities. Leaders are not authoritarians, managers of people, or supervisors who tell us what to do or forbid us from doing things; nor are they “parents” to whom we transfer our own self-responsibility. However, they do often advise us of the consequences of actions we have done or propose to do. Our actions result in contributions, or lack of contributions, to the success of our enterprise. Our pay depends on the magnitude of our contributions. This is the basic discipline of our lattice organization.
Many other aspects of organizational life are arranged along similar lines. The parking lot does not have any reversed parking spaces except for customers and the handicapped. There is only one area in each plant in which to eat. The lunchroom in each new plant is designed to be a focal point for employee interaction. As Dave McCarter of Phoenix explains, “The design is no accident. The lunchroom in Flagstaff has a fireplace in the middle. We want people to like to be here.” The location of the plant is also no accident. Sites are selected based on transportation access, a nearby university, the natural beauty of the surroundings, and appeal of the climate. Land cost is never a primary consideration.
McCarter justifies the selection criteria by stating, “Expanding is not costly in the long run. The loss of money is what you make happen by stymieing people into a box.”
In many ways the leadership approach used at Gore might be compared with the recently coined concept “Super Leadership”–Leading Others to Lead Themselves (a book by C. C. Manz and H.P. Sims, Prentice-Hall,1989, Berkley,1990). The focus is on empowering and enabling others to perform on their own, and to the best of their ability. In a sense the only real bosses for Gore employees are themselves.
Not all people function well under such a system, especially initially. For those accustomed to a more structured work environment, there are adjustment problems. As Bill Gore said, “All our lives most of us have been told what to do, and some people don’t know how to respond when asked to do something–and have the very real option of saying no–on their job. It’s the new associate’s responsibility to find out what he or she can do for the good of the operation.” The vast majority of the new associates, after some initial floundering, adapt quickly.
For those who require more structured working conditions, Gore’s flexible work place is not for them. According to Bill, for those few,” It’s an unhappy situation, both for the associate and the sponsor. If there is no contribution, there is no paycheck.”
Ron Hill, an associate in Newark, has pointed out that the company “will work with associates who want to advance themselves. ” Associates are offered many in-house training opportunities. These tend to be technical and engineering focused, because of the type of organization Gore is, but the training also includes in-house programs in leadership development. In addition, the company has cooperative programs through universities and other outside providers. Gore will pick up most of the costs for the associates. As in many aspects of the Gore culture, the emphasis here is that the associate must take the initiative.
As Anita McBridge, an associate in Phoenix, says, “It’s not for everybody. People ask me, do we have turnover, and yes we do have turnover. What you’re seeing looks like utopia, but it also looks extreme. If you finally figure out the system, it can be real exciting. If you can’t handle it, you gotta go. Probably by your own choice, because you’re going to be so frustrated.”
In rare cases an associate “tries to be unfair”, as Bill put it. Such “unfairness” might involve chronic absenteeism, for example, or an individual caught stealing. “When that happens, all hell breaks loose”, said Bill Gore”. We can get damned authoritarian when we have to”.
Over the years, Gore & Associates have faced a number of unionization drives. The company neither tries to dissuade an associate from attending an organizational meeting nor retaliates when flyers are passed out. Each attempt has been unsuccessful, and none of the plants have been organized to date. Bill believed that no need exists for third-party representation under the lattice structure. “Why would associates join a union when they own the company?” he asked. “It seems rather absurd.”
It should be obvious that life as a Gore associate can be unique and challenging. Consider the following example. On July 26,1976, Jack Dougherty, a newly minted MBA from the College of William and Mary, became an associate. Bursting with resolve and dressed in a dark blue suit, he presented himself to Bill Gore, shook hands firmly, looked him in the eye, and said he was ready for anything.
What happens next was the one thing for which Jack was not ready. “That’s fine, Jack, fine,” Gore replies. “Why don’t you look around and find something you’d like to do”. Three frustrating weeks later, Jack found that something. Now dressed in jeans, he loaded fabric into the maw of a machine that laminates GORE-TEX membrane to other fabrics. It was Jack’s way of learning the business. And by 1982, he had become responsible for all advertising and marketing in the fabric group.
This story is part of the folklore that is heard over and over about Gore. Today the process is slightly more structured. New associates take a journey through the business before settling into their own positions, regardless of the specific position for which they are hired. A new sales associate in the fabric division may spend six weeks rotating through different areas before beginning to concentrate on sales and marketing. Among other things he may learn is how GORE-TEX fabric is made, what it can and can not do, how Gore handles customer complaints, and how it makes its investment decisions.
Anita McBride related her early experience at W.L. Gore this way:
Before I came to Gore I had worked for a structured organization …I came here, and for the first month it was fairly structured because I was going through training…”this is what we do and this is how Gore is” and all of that, and I went to Flagstaff for that training. After a month I came down to Phoenix and my sponsor said, “Well, here’s your office”–it’s a wonderful office–and “Here’s your desk” and walked away. And I thought now what to do, you know? I was waiting for a memo or something, or a job description. Finally after another month I was so frustrated, I felt what have I gotten myself into? I went to my sponsor and I said “What the heck do you want from me? I need something from you”, and he said, “If you don’t know what you’re supposed to do, examine your commitments and opportunities”.
As a postscript to the story, Anita did find something worthwhile to do–she now heads up the personnel function in Phoenix and seems to love her company.
Research and Development, like everything else at Gore, is unstructured. There is no formal R&D department, yet the company holds numerous patents. Most inventions are held as proprietary or trade secrets. Any associate can ask for a piece of raw PTFE (known as a “silly worm”) with which to experiment. Bill Gore believed that all people had it within themselves to be creative.
The best way to understand how research and development works is to see how inventiveness has previously occurred at Gore. By 1969, the wire and cable division was facing increased competition. Bill Gore began to look for a way to straighten out the PTFE molecules. As he said, “I figured out that if we ever unfold those molecules, get them to stretch out straight, we’d have a tremendous new kind of material”. He thought that if PTFE could be stretched, air could be introduced into its molecular structure. The result would be greater volume per pound of raw material without affecting performance. Thus, fabricating costs would be reduced and the profit margins would be increased. Bill and his son, Bob, heated rods of PTFE to various temperatures and then slowly stretched them. Regardless of the temperature or how carefully they stretched, the rods broke.
Working alone late one night in 1969 after countless failures, Bob in frustration yanked at one of the rods violently. To this surprise, it did not break. He tried it again and again with the same results.
The next morning Bob dramatized the breakthrough to his father. As Bill Gore told the story, “Bob wanted to surprise me so he took a rod and stretched it slowly. Naturally, it broke. Then he pretended to get mad. He grabbed another rod and said,’Oh the hell with this,’ and gave it a pull. It didn’t break–he’d done it.” The new arrangement of molecules changed not only the wire and cable division, but led to the development of GORE-TEX fabrics, now the largest division at Gore, plus a host of other products.
Bill and Vieve conducted initial field-testing of GORE-TEX fabric in the summer of 1970. Vieve made a hand-sewn tent out of patches of the material, and they took it on their annual camping trip to the Wind River Mountains in Wyoming. The very first night in the wilderness, they encountered a hail storm. The hail tore holes in the top of the tent, but the bottom filled up like a bathtub from the rain. As Bill Gore stated,”At least we knew from all the water that the tent was waterproof. We just needed to make it stronger, so it could withstand hail.”
The second largest division began on the ski slopes of Colorado. Bill was skiing with his friend, Dr. Ben Eiseman, of the Denver General Hospital. As Bill Gore told the story, “We were just about to start a run when I absent-mindedly pulled a small tubular section of GORE-TEX out of my pocket and looked at it. ‘What is that stuff?’ Ben asked. So I told him about its properties. ‘Feels great,’he said, ‘What do you use it for?’ ‘Got no idea,’ I said. ‘Well give it to me,’ he said,’and I’ll try it in a vascular graft on a pig,’ Two weeks later, he called me up. Ben was pretty excited,’ Bill,’he said ‘I put it in a pig and it works. What do I do now?’ I told him to get together with Pete Cooper in our Flagstaff plant, and let them figure it out.” Now hundreds of thousands of people throughout the world walk around with GORE-TEX vascular grafts.
Every associate is encouraged to think, experiment, and follow a potentially profitable idea to its conclusion. For example, at a plant in Newark, Delaware, a machine that wraps thousands of yards of wire a day was designed by Fred L. Eldreth, an associate with a formal education that stopped with the third grade. The design was done over a weekend. Many other associates have contributed their ideas for both product and process breakthroughs.
Without an R&D department, innovations and creativity work very well at Gore & Associates. The year before he died, Bill Gore claimed that “The creativity, the number of patent applications and innovative products is triple [that of DuPont].” Overall, the associates appear to have responded positively to the GORE system of unmanagement and unstructure. Bill Gore estimated the year before he died that,” The profit per associate is double” that of DuPont.
While the lattice and unstructured management appear to be a remarkable and promising innovation, it should be considered with some caution. Just as with any other new management approach, it should be evaluated in terms of its fit with an organization’s culture and objectives. Bill Gore defended the approach, but with sensitivity to its alleged limitations. “I’m told from time to time,” he once said,” that a lattice organization can’t meet a crisis well because it takes too long to reach a consensus when there are no bosses. But this isn’t true. Actually, a lattice, by its very nature, works particularly well in a crisis. A lot of useless effort is avoided because there is no rigid management hierarchy to conquer before you can attack a problem.”
The lattice has been put to the test on a number of occasions. For example, in 1975 Dr. Charles Campbell, the University of Pittsburgh’s senior resident, reported that a GORE-TEX arterial graft had developed an aneurysm. (An aneurysm is a life-threatening, bubble-like protrusion. If it continues to expand, it will explode.) Obviously, this kind of problem had to be solved quickly and permanently.
Within only a few days of Dr. Campbell’s first report, he flew to Newark to present his findings to Bill and Bob Gore and a few other associates. The meeting lasted two hours. Before it was over, Dan Hubis, a former policeman who had joined Gore to develop new production methods, had an idea, and he returned to his work area to try some different production techniques. After three hours and twelve tries, he had developed a permanent solution. In other words, in only three hours a potentially damaging problem to both patients and the company was resolved. Furthermore, Hubis’s redesigned graft has gone on to win widespread acceptance in the medical community.
Other critics include outsiders who had problems with the idea of no titles. Sarah Clifton, an associate at the Flagstaff facility, was being pressed by some outsiders as to what her title was. She made one up and had it printed on some business cards–SUPREME COMMANDER. When Bill Gore learned what she did, he loved it and recounted the story to others.
Another critic, Eric Reynolds, founder of Marmot Mountain Works Ltd. of Grand Junction, Colorado, and a major Gore customer, points to another limitation: “I think the lattice has its problems with the day-to-day nitty-gritty of getting things done on time and out the door. I don’t think Bill realizes how the lattice system affects customers. I mean after you’ve established a relationship with someone about product quality, you can call up one day and suddenly find that someone new to you is handling your problem. It’s frustrating to find a lack of continuity.” He goes on to say, “But I have to admit that I’ve personally seen at Gore remarkable examples of people coming out of nowhere and excelling.”
Bill Gore was asked a number of times if the lattice structure could be used by other companies. His answer was no. “For example,” he explained, “established companies would find it very difficult to use the lattice. Too many hierarchies would be destroyed. When you remove titles and positions and allow people to follow whom they want, it may very well be someone other than the person who has been in charge. The lattice works for us, but it’s always evolving. you have to expect problems.” He maintained that the lattice system works best when put in place by a dynamic entrepreneur in a start-up company.
Organizations that are considering the introduction of employee empowerment and self-management could benefit from several lessons stemming from the story told in this article. Some of these lessons are summarized below.
1. The role of management and leadership needs to be redefined. A leadership perspective that recognizes the role of self-management and self-leadership for each employee is at the heart of the empowerment approach. At Gore, associates talk about “unmanagement”–with no bosses or managers, but with lots of leaders.
· 2. Organization and structure need to be redefined as well. A concrete chain of command and definite hierarchy are not characteristics that describe Gore. Rather, Gore has only two designated officer positions (president and secretary-treasurer), and these only because of legal requirements. Everyone else is an associate with no assigned title. At Gore, they talk about “unstructure,” not structure. The lattice allows all associates to interact directly with anyone else they need to, without concern for a formal chain of command.
· 3. Some of the void that is left by the absence of structure and management (in a traditional sense of those terms) can be filled by culture and norms. Gore relies on sponsors, not managers, to help guide associates and to serve as advocates for less experienced employees. At Gore, innovation, teamwork, and independent effort are valued and the associates are well aware of it. The Gore culture encourages fairness, freedom, and commitments in an overall system that emphasizes contribution to the entire organizational team.
· 4. While formally designated, relatively permanent teams may not be needed, lots of teamwork is. Gore relies heavily on fluid, temporary self-developing teams and on an overall commitment to contributing to the entire organization team.
· 5. An unstructured system that emphasizes self-management and requires individual initiative can be a difficult transition for some employees. At Gore, many of the employees love the system; others cannot take it and leave. Realistic “job previews” that inform employees about what they’re getting into, along with orientation and training to prepare them to deal with high levels of autonomy, are probably essential ingredients for organizations considering adopting a similar system.
· 6. Leaving research and development unstructured while encouraging everyone to get involved can lead to lots of innovation. At Gore, everyone is encouraged to get into the act of experimenting with new ideas. Some of Gore’s most important products have resulted from the creativity of “regular” workers who came up with a different idea and had the encouragement and freedom to follow through on it.
· 7. Provide multiple opportunities for everyone to participate in the organization and multiple ways for them to be rewarded for their participation. More than most companies, Gore recognizes the individual employee and the diversity of skills that each can bring to the workplace. Gore also recognizes individual contributions through its salary, profit sharing, and ASOP programs.
· 8. Consider self-management and a system such as Gore’s with caution. While W.L. Gore has achieved some very impressive results, it has also had its critics and those who have pointed out potential flaws with the system. Bill Gore argued that the lattice system should work best in start-up companies led by dynamic entrepreneurs.
We believe many of the principles underlying the Gore system could be adopted in most organizations, but should not be adopted blindly. Relying on self-developing teams without managers may not represent the right organizational approach for all, but it is sure worth a look.
Gore has gone beyond the ideal of a democratic, capitalistic organization to an egalitarian, participative, entrepreneurial society. The values of Rousseau, Locke, Smith, and Jefferson are embodied in Gore’s culture and operating systems. The difference between many other economic enterprises and Gore is like the difference between a monarchy and a participative democracy. In the former, only a few have the right to a leadership role; in the latter, anyone with the requisite skill and motivation can become a leader. Furthermore, in the former only a few can significantly profit financially; in the latter, many can profit.
The approach used by Gore is a radical shift from the usual practices of business, but other firms such as Herman Miller and Dana Corporation have developed (or are moving toward) similar values and culture. The keys for such a transformation are both organizational and individual. Organizations must put into place the operating systems to allow individuals to use their array of skills, and be rewarded for so doing. Organizations also must rid themselves of the structure and processes that compartmentalize and create “we/they” feelings. Managers from other companies frequently visit Gore in an effort to understand how Gore does it. Anita McBride indicated that, in her experience, the majority walk away unwilling to face the organizational changes required.
At least as important as the organizational changes are the individual ones required. Individuals in the organization must master some basic self-leadership skills. And learning to lead themselves well is usually a prerequisite for effectively leading others. Employees at all levels of the organization need to learn more than a set of specialized technical skills. They need to learn the keys to motivating and directing themselves and to helping others to do the same.
Again, such a change is not for everyone or for all organizations. The commitment to the change must be whole, not half-hearted. To go half-way is to limit the potential for growth both individually and economically. Individual and economic growth complement and sustain each other. Both must be unleashed for organizations and individuals to develop simultaneously. Gore has evolved into a society where the potential for both is unleashed. Organizations and their leaders that are interested in taking a similar path must find effective ways to unleash the potential of all. The lessons presented in this article represent some practical guidelines for achieving this end.
DIAGRAM: EXHIBIT 1; THE LATTICE STRUCTURE
A number of sources were especially helpful in providing background material for this article. The most important of these were the W. L. Gore associates, who generously shared their time and viewpoints about the company. We especially appreciate the input from Anita McBride.
A number of published sources are available for obtaining more information on W. L. Gore & Associates. These include:
Angrist, S. W.,”Classless Capitalists,”Forbes, May 9, 1983, pp. 123-4.
Hoerr, J.,”A company where everybody is the boss,” Business Week, April 15, 1985, pp. 98.
Price, K.,”Firm Thrives Without Boss,” AZ Republic, February 2, 1986.
Posner, B.G.,”The first day on the job,” Inc., June 1986, pp. 73-5.
Rhodes L.,”The Un-manager,”Inc., August 1982, p. 34.
Simmons, J.,”People Managing Themselves: Un-management at W.L. Gore Inc.,” The Journal for Quality and Participation, December 1987, pp.14-19.
Ward, A., “An All-Weather Idea,” The New York Times Magazine, Nov. 10, 1985,Sec 6.
“Wilbert L. Gore,” Industry Week, Oct. 17, 1983, pp. 48-49.
For more information on empowered work teams and compatible leadership approaches, we recommend the books Super Leadership: Leading Others to Lead Themselves by Charles C. Manz and Henry P. Sims, Jr. (Prentice-Hall, 1989, Berkley, 1990), High Involvement Management by Edward E. Lawler, 3 (Jossey-Bass, 1986), and Mastering Self-Leadership: Empowering Yourself for Personal Excellence by Charles C. Manz(Prentice-Hall, Forthcoming, 1991). We also recommend J. Richard Hackman’s article “Psychology of Self-Management in Organizations” in Psychology and Work: Productivity Change and Employment (American Psychological Association, 1986), edited by M.S. Pollack and R.O. Perloff; Richard E. Walton’s article “From Control to Commitment in the Workplace” in the Harvard Business Review (March/April 1985), and the article by Charles C. Manz, David E. Keating, and Anne Donnellon entitled “Preparing for an Organizational Change to Employee Self-Management: The Managerial Transition,” Organizational Dynamics, 1990.
For information on overcoming managerial resistance to empowerment, see the article by Tim Reinhard, Joseph Robinson, Jr. Toney Sloane, Frank Shipper, Janice L. Weir, and Bill Wickersham,”Handling Managerial Resistance to Employee Involvement,”Journal of Quality and Participation (December 1991).
If you wish to make photocopies or obtain reprints of this or other articles in ORGANIZATIONAL DYNAMICS, please refer to the special reprint service instructions on page 80.
PHOTOS (BLACK & WHITE): Frank Shipper and Charles C. Manz
By FRANK SHIPPER and CHARLES C. MANZ
Frank Shipper is a professor of management at the Franklin P. Perdue School of Business at Salisbury State University. He received his B. S. from West Virginia University and his M. B. A. and Ph. D. from the University of Utah. Before returning to school to pursue his graduate degrees, he worked in biomechanical and structural engineering. Since receiving his Ph. D., his consulting, teaching, and research interests have focused on leadership effectiveness, work teams, and strategic responses to legal and political issues. He receive a Federal Faculty Fellowship for work on organizational effectiveness. Shipper has written three books and numerous articles. His most recent books are Task Cycle Management: A Competency-Based Course for Operating Managers (Clark Wilson Publishing Company, 1990) and Avoiding and Surviving Lawsuits: The Executive Guide to Strategic Legal Planning (Jossey-Bass, 1989)
Charles C. Manz is an associates professor of management at Arizona State University. He was awarded the prestigious Marvin Bower Fellowship at the Harvard Business School in 1988-89 for “the outstanding quality and quantity of his published work” in the area of self-managed work teams and employee self-leadership. He is co-author of SuperLeadership: Leading Others to Lead Themselves (Prentice-Hall,1989), a book widely acclaimed by experts in the field. One review proclaimed that the book should be a “classic of the ’90s.” He and co-author Henry P. Sims, Jr. were recently described in an article in the Academy of Management Executive as “the leading writers in the area of self-management.” Manz has served as a consultant, executive education leader, or researcher for many organizations. He has written articles, as well as several books, on the topics of employee self-leadership, self-managed work teams, and the leadership of self-managed employees. Manz received B.A. and M.B.A. degrees from Michigan State University and a Ph.D. degree from Pennsylvania State University. Charles Manz completed the majority of his writing for this article during his year as a Marvin Bower Fellow at Harvard Business School. The generous support he received is gratefully acknowledged.