Lessons from a Middle-Aged Revolutionary at W.L. Gore

Here is a piece from Gary Hamel's web site. It is genuinely interesting reading about an organisation W. L. Gore who has developed a unique DNA, recognised it and continues to innovate around it. This is a highly successful formula just like Apple. Yet, I have to ask you the question, could you use any their management concepts and techniques in your organisation. If not what might your organisational DNA look like.

Here is Hamel's blog from the Wall Street Journal.

As a management researcher, I’ve had the opportunity to peer inside a lot of organizations. In doing so, I’ve learned that most big companies are pretty much the same, at least when it comes to the way they’re managed. The rituals of goal-setting, planning, budgeting and performance appraisal differ only slightly from firm to firm. There’s even less variety in the architecture of power. Hierarchical authority structures, top-down leadership appointments and order-following employees have come to nearly every organization I’ve studied—nearly. One amazing exception is W.L. Gore & Associates. Known mostly for its Gore-Tex range of high-performance fabrics, the company makes more than 1,000 products and employs 9,000 in 50 locations around the world. Wherever it operates, Gore is frequently ranked as one of the best possible places to work.

I first visited Gore when I was doing research for “The Future of Management.” My friends at Fast Company had labeled it as the world’s most innovative company, so I thought I should learn more. That first visit was weird, even disconcerting. I found virtually nothing at Gore that matched up with the management practices I had observed in hundreds of other companies—no titles, no bosses and no formal hierarchy. I felt like a surgeon who had opened up a patient who looked human, but turned out to be filled with wires and circuits. Yet as I got to know Gore, I realized I had this analogy was backwards. Gore was deeply human and by contrast, all those other companies I had studied were cyborgs. Gore’s management model seemed wacky only because I had grown accustomed to the inhuman practices that predominated in most other companies.

Fact is, Gore’s progressive management model has been ahead of its time for more than half a century, ever since the company was founded in 1958 by Wilbert (Bill) L. Gore, a chemical engineer who left DuPont with the goal of building a company where innovation was the main show rather than a sideshow. One measure of Gore’s innovation-fueled resilience: in 50 years it has never made a loss.

Despite having no EVPs, SVPs or even plain ol’ VPs, Gore does have a CEO. Terri Kelly got the job in 2005 in a peer-driven process. She joined Gore in 1983, after graduating summa cum laude from the University of Delaware with a bachelor’s degree in mechanical engineering. During her career at Gore she has exercised her considerable leadership gifts in a broad array of critical roles.

Recently, I met up with Terri in Northern California, and asked her to take me—and you—on a deep dive into Gore’s wonderfully strange (and strangely wonderful) management practices. This week: Part I of that interview.

Gary: What would be the most distinctive elements of Gore’s management model to an outsider?

Terri: First, we don’t want to operate in a hierarchy, where decisions have to make their way up to the top and then back down. We’re a lattice or a network, not a hierarchy, and associates can go directly to anyone in the organization to get what they need to be successful.

Second, we try to resist titles. We have a lot of people in responsible positions in the organization, but the whole notion of a title puts you in a box, and worse, it puts you in a position where you can assume you have authority to command others in the organization. So we resist this.

Third, our associates, who are all owners in the company, self-commit to what they want to work on. We believe that rather than having a boss or leader tell people what to do, it’s more powerful to have each person decide what they want to work on and where they can make the greatest contribution. But once you’ve made your commitment as an associate, there’s an expectation that you’ll deliver. So there are two sides to the coin: freedom to decide and a commitment to deliver on your promises.

And fourth: Our leaders have positions of authority because they have followers. Rather than relying on a top-down appointment process, where you often get promoted because you have seniority, or are the best friend of a senior executive, we allow the voice of the organization to determine who’s really qualified to be a leader, based on the willingness of others to follow.

Gary: Bill Gore founded your company more than 50 years ago. What was his vision? Where did these radical management ideas come from?

Terri: Bill was very passionate about new materials, and saw a lot of promise for fluoropolymers. When he started Gore, his business plan was not all that developed, but what was developed was a set of deeply-held beliefs about how you lead people and build an organization. What motivated Bill was an understanding that as a company we had to innovate. We wouldn’t be successful unless we could bring innovative products to the market.

Bill spent a lot of time thinking about the human element in this. He was influenced by Douglas McGregor’s book, “The Human Side of Enterprise” [published in 1960]. He was influenced by Abraham Maslow and his views on how people react when they’re not feeling safe and secure. These philosophies set the foundation for our company’s values. He knew that if you can’t engage your associates, if they don’t feel they can make a difference, if they don’t feel valued for what they bring to the business, and if they aren’t encouraged to collaborate and share their knowledge, you won’t get innovation. But there was a clear business purpose to all of this; the goal wasn’t simply to create a happy work environment.

At DuPont, Bill had had the opportunity to work in one of these task forces, and he was struck by the fact that the people on the team behaved so differently from what he observed elsewhere. They’d drive to work together, they’d work around the clock to get something done, they’d get to know one another. So he wondered, why couldn’t a whole company work this way?

Gary: Gore doesn’t have a formal hierarchy, or titles, but obviously it has leaders, individuals whose leadership abilities give them more influence and authority. How does someone become a leader at Gore?

Terri: One of my associates said, ‘If you call a meeting, and no one shows up, you’re probably not a leader, because no one is willing to follow you.’ At Gore, the test of leadership is that simple: are others willing to follow you? We use a peer review process to identify the individuals who are growing into leadership roles. Who are our associates listening to? Who do they want on their leadership team? At Gore, leaders emerge, and once they’re in a leadership role, they understand their job is to bring out the strengths of their teams, to make their colleagues successful. Our model also flips the role of the leader—the way you use your power is quite different from what you’d find in most other organizations. At the end of the day, our leaders know their ‘followership’ comes from their peers, and that they can easily lose this if they don’t live up to the company’s values.

Gary: At Gore, it sounds like people earn their power by supporting others, and if they stop doing this, their power starts to erode. So how does this reality shape leadership behaviors and drive business results?

Terri: The challenge in this distributed leadership model is to make sure it’s not just chaos. First of all, there are norms of behavior and guidelines we follow. These are our ‘rules of engagement.’ Every associate understands how critical 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. This puts a tremendous burden on the leader to explain the rationale behind the decision, and to put it in the context of our culture: Why is this fair? Why is it consistent with our beliefs and principles? So again, the burden on leaders is different from what you’d find in many other companies, because our leaders have to do an incredible job of internal selling to get the organization to move.

Gary: I can understand how this painstaking consultation produces buy-in, but doesn’t it slow things down?

Terri: 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 even better. So yes, it takes more time, but we find that once the decision is made, you’d better get out of the way because you now have the whole organization eager to accelerate and execute. In many organizations, leaders make quick decisions, but don’t understand that the organization isn’t behind the decision—half the people don’t know why the company is moving in this direction, and the other half is pulling in the opposite direction—either intentionally or unintentionally. So if you think about the entire process of decision-making and implementation, our approach is faster, because by the time you get to the decision, the whole organization is behind it, rather than just a few leaders.

Gary: Executives often try to get alignment by selling a decision once it’s been made. For them, alignment is a communication exercise. Or they think they can get alignment through a consistent set of financial incentives—a shared scorecard. By contrast, it seems as if Gore sees the problem of alignment as one of involvement.

Terri: Absolutely. All of our associates are owners and they feel an incredible degree of responsibility for business outcomes. If they think we’re going in the wrong direction, or believe a decision is wrong, they feel compelled to speak up, and they know our values give them the right to have a voice. For leaders, this can be troublesome at times, because you’re not only evaluated by the outcomes you achieve, but by how you get the job done. One of the hardest jobs is to be a leader at Gore, because we expect so much of them.

Gary: I know that Gore puts much emphasis on building great teams as it does on developing great leaders. Can you explain the thinking behind this?

Terri: 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. Within any team you’ll find people with very different perspectives; they don’t all think alike—and we encourage this. We encourage teams to take a lot of time to come together, to build trust, to build relationships, because we know that if you throw them in a room and they don’t have a foundation of trust, it will be chaotic, it will be political, and people will feel as if they’re being personally attacked. We invest a lot in making our teams effective, so when they have those great debates—where a scientist doesn’t agree with a sales associate, or manufacturing doesn’t agree with a product specialist—the debate happens in an environment where everyone is looking for a better solution, versus “you win, I lose.”

We want to avoid a situation where decisions have to bubble to the center, because this undermines our goal of driving decisions through the most knowledgeable Associates. We want to make sure that people know they have the authority to make decisions and are responsible for the outcomes.

Gary: I can understand why being a leader at Gore is a challenge. In most organizations, leaders have positional power—someone has made them head of a business or a function—so they can assume others will follow them, because they must. And they have sanctions—they can fire or demote subordinates who don’t get in the boat. But this isn’t true at Gore. When you bring in leaders from the outside, do they have difficulty adapting to your model? Do they struggle to figure out how to get things done?

Terri: We sometimes bring outside talent in, but we’re very careful before putting them into a leadership role, because even though they may have great capabilities and experience, they don’t know how to navigate our culture—so it’s very dangerous to put them straight into a leadership role. Typically, we’ll put them in a functional role to start with, or in some other role where they can demonstrate their capabilities and expertise. We help them learn how to lead in a way that is consistent with our culture. We’ve had some success here, but it’s not easy. When we hire outside people and get them to talk about their values, they’ll say, “I’m a people person. I believe in teamwork.” But when we put them into our environment and strip away their positional power, it can bring them to their knees—because they hadn’t realized how much of their success was a function of their position and power and their ability to command and control. So we’re very careful in terms of bringing leaders in and helping them learn to succeed at Gore.

In other companies, the leader is often expected to be the most knowledgeable person on the team, the voice of the company—all-wise and all-knowing. We have a different view. If you want to tap into the whole organization, you have to distribute the responsibility for leadership to the associates who have the relevant knowledge. The Gore model changes the traditional role of the leader. The leader’s job is to make sure the culture is healthy: Is it working as a system? Are teams coming together? Are we getting diverse points of view? Are the best ideas rising to the surface? Our leaders have to be comfortable with not being at the center of all the action, with not trying to drive every decision, with not being the most strategic person on the team or the one with the most thoughtful ideas. Their contribution is to help the organization scale and be effective.

In my next post, Terri will talk about how Gore mentors new employees, stays disciplined and makes tough tradeoffs. For now, though, a few questions, dear reader…

Do you think Gore’s leadership model would ever work in your organization? Are there baby steps your company could take to de-emphasize the role of formal hierarchy? And how would you get things done if you were robbed of your title, had no “subordinates,” and couldn’t give a direct order to anyone?