7-7e Case: W. L. Gore & Associates

Founded in 1958, W. L. Gore & Associates has become a modern-day success story as a uniquely managed, privately owned, family business. Founders Bill and Vieve Gore set out to create a business where innovation was a way of life and not a by-product. Today Gore is best known for its Gore-Tex range of high-performance fabrics and Elixir Strings for guitars. Gore is the leading manufacturer of thousands of advanced technology products for the medical, electronics, industrial, and fabrics markets. With annual revenues of $2.5 billion, the company employs approximately 9,000 associates at more than 50 facilities around the world.

Terri Kelly replaced Chuck Carroll as the president and CEO of W. L. Gore & Associates in April 2005. Gore has repeatedly been named among the 100 Best Companies to Work For, in the United States by Fortune magazine. In a recent interview, Ms. Kelly was asked what would be the most distinctive elements of the Gore management model to an outsider. She listed four factors: We don't operate in a hierarchy; we try to resist titles; our associates, who are all owners in the company, self-commit to what they want to do; and our leaders have positions of authority because they have followers. According to CEO Kelly, these four attributes enable Gore to maximize individual potential while cultivating an environment that fosters creativity and also to operate with high integrity. She is quick to remind everyone that all of Gore's practices and ways of doing business reflect the innovative and entrepreneurial spirit of its founders.

CEO Kelly attributes Gore's success to its unique culture. How work is conducted at Gore and how employees relate to one another sets Gore apart. There are no titles, no bosses and no formal hierarchy. Compensation and promotion decisions are determined by peer rankings of each other's performance. To avoid dampening employee creativity, the company has an organizational structure and culture that goes against conventional wisdom. W. L. Gore & Associates has been described as not only unmanaged but also unstructured. Bill Gore (the founder) referred to the company's structure as a lattice organization. Gore's lattice structure includes the following features.

• Direct lines of communicationperson to personwith no intermediary
• No fixed or assigned authority
• Sponsors, not bosses
• Natural leadership as evidenced by the willingness of others to follow
• Objectives set by those who must make them happen
• Tasks and functions organized through commitments
• Complete avoidance of the hierarchical command and control structure

The lattice structure as described by the people at Gore encourages hands-on innovation and discourages bureaucratic red tape by involving those closest to a project in decision making. Instead of a pyramid of bosses and managers, Gore has a flat organizational structure. There are no chains of command, no predetermined channels of communication. It sounds very much like a self-managed team at a much broader scale.

Why has Gore achieved such remarkable success? W. L. Gore & Associates prefers to think of the various people who play key roles in the organization as being leaders, not managers. While Bill Gore did not believe in smothering the company in thick layers of formal management, he also knew that as the company grew, he had to find ways to assist new people and to follow their progress. Thus, W. L. Gore & Associates came up with its sponsor program. The sponsor program is a dyadic relationship between an incumbent, experienced employee and a newly hired, inexperienced employee. Before a candidate is hired, an associate has to agree to be his or her sponsor or what others refer to as a mentor. The sponsor's role is to take a personal interest in the new associate's contributions, problems, and goals, acting as both a coach and an advocate. The sponsor tracks the new associate's progress, offers help and encouragement, points out weaknesses and suggests ways to correct them, and concentrates on how the associate might better exploit his or her strengths.

Sponsoring is not a short-term commitment. All associates have sponsors, and many have more than one. When individuals are hired, at first they are likely to have a sponsor in their immediate work area. As associates commitments change or grow, it's normal for them to acquire additional sponsors. For instance, if they move to a new job in another area of the company, they typically gain a sponsor there. Sponsors help associates chart a course in the organization that will offer personal fulfillment while maximizing their contribution to the enterprise. Leaders emerge naturally by demonstrating special knowledge, skill, or experience that advances a business objective.

An internal memo describes the three kinds of sponsorship and how they might work:

• Starting sponsora sponsor who helps a new associate get started on his or her first job at Gore, or helps a present associate get started on a new job.
• Advocate sponsora sponsor who sees to it that the associate being sponsored gets credit and recognition for contributions and accomplishments.
• Compensation sponsora sponsor who sees to it that the associate being sponsored is fairly paid for contributions to the success of the enterprise.

An associate can perform any one or all three kinds of sponsorship. Quite frequently, a sponsoring associate is a good friend, and it's not uncommon for two associates to sponsor each other as advocates.

Being an associate is a natural commitment to four basic principles articulated by Bill Gore and still a key belief of the company: fairness to each other and everyone we come in contact with; freedom to encourage, help, and allow other associates to grow in knowledge, skill, and scope of responsibility; the ability to make one's own commitments and keep them; and consultation with other associates before undertaking actions that could affect the reputation of the company.

Over the years, W. L. Gore & Associates has faced a number of unionization drives. The company neither tries to dissuade associates from attending organizational meetings nor retaliates against associates who pass out union flyers. However, Bill Gore believes there is no need for third-party representation under the lattice structure. He asks, Why would associates join a union when they own the company? It seems rather absurd.

Commitment is seen as a two-way street at W. L. Gore & Associateswhile associates are expected to commit to making a contribution to the company's success, the company is committed to providing a challenging, opportunity-rich work environment, and reasonable job security. The company tries to avoid laying off associates. If a work force reduction becomes necessary, the company uses a system of temporary transfers within a plant or cluster of plants, and requests voluntary layoffs. According to CEO Kelly, Gore's structure, systems, and culture have continued to yield impressive results for the company. In the more than 50 years that Gore has been in business, it has never made a loss.

questions:

Support your answers to the following questions with specific information from the case and text or with other information you get from the Web or other sources.

• 1What theories from this chapter are revealed through the case?
• 2How did Gore's sponsors" program facilitate the creation of high-quality relationships among leaders, sponsors, and associates?
• 3Evaluate followership at W. L. Gore & Associates. What company actions and/or policies account for the quality of followership?
• 4. Would you characterize the leadership style at W. L. Gore & Associates as job-centered or employee-centered (Chapter 3)? Support your answer.
• 5 Based on the types of power discussed in the text, what type(s) of power do sponsors have in their relationships with associates (Chapter 5)?
• 6. What role, if any, does coaching play in W. L. Gores lattice structure (Chapter 6)?