A study in Innovation : W.L. Gore & Associates.
There are few companies that can claim to have created products that orbit the earth, been on top of Mt. Everest and even helped mend some broken hearts. Came across “W.L. Gore and associates” and their story and management philosophy is impressive.
Founded in 1958 by Wilbert.L Gore and his wife Vieve at the basement of their home in Delaware, this humble company served the electronic market by providing manufacturing/insulation consulting and services in its early years. Wilbert used to be a R & D engineer experimenting with polymers at Dupont. The 1969 discovery by Bill and Vieve’s son, Bob Gore, of a remarkably versatile new polymer led the enterprise into myriad new applications in medical, fabric, pharmaceutical and biotechnology, oil and gas, aerospace, automotive, mobile electronics, music and semiconductor industries. As the company that invented this new polymer, expanded polytetrafluoroethylene (or ePTFE), and introduced it in the marketplace, Gore is committed to remaining a leader in fluoropolymers.
For a company with 600 plus patents to their name, 26 production facilities across the world, 9000 employees – where 24% constitutes millennials, annual sales of 3.1 Billion USD in 2018 (claiming steady growth every year since its inception) the company is still private. But that is not the catch, they are the frontrunners of innovation and technology.
How can a manufacturing company be so innovative that they manufacture fuel cells, fibre optics, bionic arteries, smartphone vents and Mars rovers simultaneously?
It all boils down to culture and culture for Gore is not foosball tables, beanbags and sleep pods. They often say that “Gore had a culture” even before culture was a buzzword. They have a very unique management philosophy which I find interesting.
Latticwork structure :
Unlike corporates with rigid hierarchy, Gore’s major philosophy is to democratize power within the company. Managers are called “Leaders” and all employees are “Associates”. Here is a company that does not assign people or teams to managers but rather let the team choose their own managers. The Gore culture is sort of a lateral ecosystem. Leaders aren’t appointed; they create “followerships.” Anyone can pursue an idea and persuade others to join. Employees build “lattice” networks, connecting with others across divisions, to encourage the flow of knowledge and ideas. They go by the philosophy “ Great leaders attract follower-ship “
Small unit = Happy unit (The rule of 150) :
During World War II, while on a task force at DuPont, Gore had learned of another type of organizational structure called the lattice system, which was developed to enhance the ingenuity and overall performance of a group working toward a goal. It emphasized communication and cooperation rather than hierarchy of authority. Gore limits the size of all its corporate teams to 150 people. Their offices are designed into separate separate blocks / workshops for every 150 people. The size of a team is inversely proportional to the emotional bonding between its members but directly proportional to productivity they churn out. Gore achieves proportionality constant in terms of productivity and emotional bonding in teams using the rule of 150.
Often heralded as one of the world’s most innovative companies,W. L. Gore embraces rapid experimentation. To begin with, the company has “dabble time,” which is an expectation that approximately 10 percent of employees’ time will go toward new ideas or initiatives In addition, the company is more than willing to make long-term investments in ideas that take time to develop. The organization’s status as a privately held company, in which employees are given shares as part of their compensation, shields it from the pressure of achieving quarterly results typical at publicly traded companies. For these reasons, it is common for employees at W. L. Gore to tinker with ideas that eventually become new products.
One example of rapid experimentation is the development of W. L. Gore’s line of Elixir guitar strings. One of the company’s engineers, Dave Myers, worked in a Gore medical devices plant developing new types of heart implants. As part of his dabble time, Myers was trying to improve his mountain bike by coating his gear cables with a layer of plastic, hoping to make the gears shift more smoothly. His tinkering was successful, giving rise to Gore’s line of Ride-On bike cables. After a series of other experiments, Myers thought of using a similar coating of plastic on guitar strings to improve their durability and feel. Not being a guitarist himself, Myers sought the help of Chuck Hebestreit—a colleague who played guitar. The duo experimented with the idea without success and without management awareness of their efforts until John Spencer—a colleague who had successfully brought a best-selling line of dental floss to the market—joined the effort. Shortly thereafter, the team had a viable product. They sought official sponsorship from the company to take their guitar strings to market. The team had great success: Elixir is a highly regarded brand of guitar strings and was the market leader in sales in 2004, capturing 35 percent of market share.
The Gore strategy by : Deloitte :
The workflow of Gore as illustrated by Deloitte through careful audit.
In a nutshell :
Words matter at Gore, and they do not always mean what they do elsewhere.
Gore is the enterprise, not the company. It has leaders, never bosses.
Associates (included in the corporate identity) is not a euphemism for staff — it reflects the fact that they are shareholders who play an active part in upholding the four founding principles of freedom, fairness, commitment and waterline. The latter means avoiding actions that risk holing the boat without first consulting others.
Freedom is as much about helping others grow as oneself, and is bound by further obligations to fairness and accountability to personal commitments. Gore encourages knowledge-based decision making, based on relationship building (so you know where the knowledge resides) and face-to-face communication, on the basis of which teams self-organise around the best ideas for new products or market opportunities.
Associates emerge as leaders by virtue of attracting followership, the only way of demonstrating leadership credentials — your business record is not sufficient. “If you call a meeting and people turn up, you’re a leader,”
Innovation is not a word!!
- 1. Malcom GLadwell : Tipping Point
- Gary Hamel : What Matters Now
- Article from Funding Universe : Article