Read the Management in Action and answer question 1.

W.L. Gore & Associates was founded in 1958 by Wilbert (Bill) and Genevieve (Vieve) Gore. The company started in the basement of their home. Success transformed the business from the basement to its first manufacturing plant in 1960. Today, Gore has over $3 billion in revenue and 10,000 employees working in offices across 25 countries. It is one of the 200 largest privately held companies in the U.S.

The company is best known for its Gore-Tex water and windproof fabrics that are used in a variety of outdoor apparel. But the company has expanded its products to include vacuum filters, microwave cable assemblies, guitar strings, dental floss, acoustic vents for cell phones, and medical devices.

The company has been profitable every year since its foundation and has been ranked on Fortune’s “100 Best Companies to Work For” list every year since 1998. Its best ranking was as No. 2 in 2005, and it was No. 12 in 2016. Not surprisingly, employees tend to remain at Gore once hired. The annual turnover rate is about 3%.

Structure, Culture, and Values Leadership Conviction

Bill Gore wanted to start a company that was free from bureaucracy and a command and control style of leadership. He felt that this was the best way to foster creativity, engagement, and innovation. He was a strong believer in autonomy and creating an environment in which people flourished. To support this philosophy, the company established a unique organizational structure and cultural values.

Gore’s organizational structure is referred to as a team-based “lattice” organization. “There are no traditional organizational charts, no chains of command, nor predetermined channels of communication.” Employees, who are all called associates, are accountable to the member of their multi-disciplined teams. Teams form in an ad hoc fashion around perceived “opportunities,” and leaders emerge.

“Leadership opportunities at Gore are based on how much of a ‘followership’ someone has among co-workers. Gore also uses peer assessments to determine compensation,” according to Fortune.

Associates are “responsible for managing their own workload” and for independently making commitments that support team goals. Goals are not dictated from the top down. Rather, associates establish their own commitments, and these percolates upward to form corporate forecasts.

High-quality relationships “with each other, with customers, with vendors and suppliers, and with our surrounding communities” are essential at Gore. Associates are encouraged to “build and maintain long-term relationships by communicating directly.” Face-to-face meetings and phone calls are preferred over less rich media, like e-mail and texting. The company established a set of fundamental beliefs to help embed its desired culture:

· Belief in the individual: If you trust individuals and believe in them, they will be motivated to do what’s right for the company.

· Power of small teams: Our lattice organization harnesses the fast decision-making, diverse perspectives, and collaboration of small teams.

· All in the same boat: All Gore associates are part owners of the company through the associate stock plan.

· Long-term view: Our investment decisions are based on long-term payoff, and our fundamental beliefs are not sacrificed for short-term gain.

How Does It All Work?

Associates are not hired for specific jobs. Rather, they are “hired for general work areas. With the guidance of their sponsors [everyone has a sponsor, whose goal is to help people succeed] and a growing understanding of opportunities and team objectives, associates commit to projects that match their skills. . . . Sponsors help associates chart a course in the organization that will offer personal fulfillment while maximizing their contribution to the enterprise.” They do this by actively providing feedback on performance and personal development and by helping associates network with others.

Bill Gore also believed in keeping operational facilities small due to his focus on high-quality interpersonal relationships. He observed that it was hard to know everyone once the number of employees at a facility exceeded 150–200 people. The company thus splits up people at a facility once it reaches this size by creating a new location.

The final piece of the cultural puzzle involves a set of guiding principles that Bill Gore called freedom, fairness, commitment, and waterline:

• Associates have the freedom to encourage, help, and allow other associates to grow in knowledge, skill, and scope of responsibility.
• Associates should demonstrate fairness to each other and everyone with whom they come in contact.
• Associates are provided the ability to make one’s own commitments and are expected to keep them.
• A waterline situation involves consultation with other associates before undertaking actions that could impact the reputation or profitability of the company and otherwise “sink the ship.”

Associates are expected to live by these principles, and the company spends considerable effort trying to hire people who fit into its culture. It is also important to note that the company does not believe in showering associates with lavish perks as do many of the other companies listed on Fortune’s list of best companies. The “headquarters doesn’t have foosball tables or napping pods,” according to Fortune. One employee described the culture this way: “It’s authentic. It’s not a façade or marketing strategy.”

For Discussion

1. What is the most important lesson from this case? Discuss.