Critical Thinking: Organizational Implementation (105 points)This week, our focus is on organizational structure and strategy implementation. For this critical thinking assignment, read the case study, W.L. Gore (Gore) & Associates: Rethinking Management (Case # 22) from your textbook. In addition, read Chapter 6, “Organizational Structure and Management Systems: The Fundamentals of Strategy Implementation.”Name and describe a typical company that is organized as a hierarchy.Describe how the following are practiced at this company—specialization, coordination, cooperation, and control.How does this company’s structure and management system promote the effective implementation of the company’s strategy?Describe how the following are practiced at Gore—specialization, coordination, cooperation, and control.Given that typical control mechanisms are lacking at Gore, how is the company able to effectively operate?How do Gore’s organizational structure and management systems promote effective strategy implementation?Your well-written paper should meet the following requirements:Be 4 pages in length, which does not include the required title and reference pages, which are never a part of the content minimum requirements.Use Saudi Electronic University academic writing standards and APA style guidelines.Support your submission with course material concepts, principles, and theories from the textbook and at least two scholarly, peer-reviewed journal articles unless the assignment calls for more.It is strongly encouraged that you submit all assignments into the Turnitin Originality Check before submitting it to your instructor for grading. If you are unsure how to submit an assignment into the Originality Check tool, review the Turnitin Originality Check—Student Guide for step-by-step instructions.Case 22
W. L. Gore &
A ssociates:
Rethinking
Management
If a man could flow with the stream, grow with the way of nature, he’d accomplish
more and he’d be happier doing it than bucking the flow of the water.
—W. L. GORE
Malcolm Gladwell (author of The Tipping Point and Outliers) described his visit to
W. L. Gore & Associates (Gore) as follows:
When I visited a Gore associate named Bob Hen at one of the company’s plants
in Delaware, I tried, unsuccessfully, to get him to tell me what his position was.
I suspected, from the fact that he had been recommended to me, that he was one of
the top executives. But his office wasn’t any bigger than anyone else’s. His card just
called him an “associate.” He didn’t seem to have a secretary, one that I could see
anyway. He wasn’t dressed any differently from anyone else, and when I kept asking
the question again and again, all he finally said, with a big grin, was, “I’m a meddler.”1
The absence of job titles and the lack of the normal symbols of hierarchy are not
the only things that are different about Gore. Since its founding in 1958, Gore has
deliberately adopted a system of management that contrasts sharply with that of other
established corporations. While the styles of management of all start-up companies
reflect the personality and values of their founders, the remarkable thing about Gore is
that, as a $3.2 billion company with 9500 employees (“associates”) in 25 countries of
the world, its organizational structure and management systems continue to defy the
principles under which corporations of similar size and complexity are managed.
The Founding of Gore
Wilbert L. (Bill) Gore left DuPont in 1958 after 17 years as a research scientist. At
DuPont, Gore had been working on a new synthetic material called polytetrafluoroethylene (PTFE), which it had branded “Teflon.” Gore was convinced that DuPont’s
commitment to supplying large industrial markets with basic chemical products had
This case was prepared by Robert M. Grant. ©2019 Robert M. Grant.
630 CASES TO ACCOMPANY CONTEMPORARY STRATEGY ANALYSIS
caused it to overlook new applications for PTFE. When Bill Gore and his wife, Vieve,
formed their own business in 1958, they were keen, not only to explore these novel
applications, but also to create the energy and passion that he had experienced when
working in small research teams at DuPont on those occasions when they were given
the freedom to pursue innovation.
Working out of their home in Newark, Delaware, and with the help of their
son, Bob, the Gores’ first product was Teflon-insulated cable. However, their breakthrough was Bob Gore’s discovery of the potential of Teflon to be stretched and
laced with microscopic holes. The resulting fabric shed water droplets but was also
breathable. Gore-Tex received a US patent in 1976. Not only did it have a wide
range of applications for outdoor clothing, the fact that Gore-Tex was chemically
inert and resistant to infection made it an excellent material for medical applications
such as artificial arteries and intravenous bags. The potential to vary the size of
the microscopic holes in Gore-Tex also made it ideal for a wide range of filtration
applications.
Since then, continuous innovation has resulted in a growing array of consumer products (such as guitar strings, dental floss, footwear components, and vacuum cleaner
bags), industrial products (such as fuel cell components, electronic components, fire
safety fabrics, and rope fibers), and medical products (such as implantable medical
devices, pharmaceutical tubing products, and sealants).
Origins of the Gore Management Philosophy
FundingUniverse.com describes the development of Bill Gore’s management ideas
as follows:
From their basement office, the Gores expanded into a separate production facility in
their hometown of Newark, Delaware. Sales were brisk after initial product introductions. By 1965, just seven years after the business had started, Gore & Associates was
employing about 200 people. It was about that time that Gore began to develop and
implement the unique management system and philosophy for which his company
would become recognized. Gore noticed that as his company had grown, efficiency
and productivity had started to decline. He needed a new management structure, but
he feared that the popular pyramid management structure that was in vogue at the
time suppressed the creativity and innovation that he valued so greatly. Instead of
adopting the pyramid structure, Gore decided to create his own system.
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.
Under the system that Gore developed, any person was allowed to make a decision
as long as it was fair, encouraged others, and made a commitment to the company.
Consultation was required only for decisions that could potentially cause serious
damage to the enterprise. Furthermore, new associates joined the company on the
same effective authority level as all the other workers, including Bill and Vieve. There
were no titles or bosses, with only a few exceptions, all commands were replaced by
personal commitments.
New employees started out working in an area best suited to their talents, under the
guidance of a sponsor. As the employee progressed there came more responsibility,
CASE 22 W. L. Gore & Associates: Rethinking Management 631
and workers were paid according to their individual contribution. “Team members
know who is producing,” Bill explained in a February 1986 issue of the Phoenix
Business Journal. “They won’t put up with poor performance. There is tremendous
peer pressure. You promote yourself by gaining knowledge and working hard, every
day. There is no competition, except with yourself.” The effect of the system was to
encourage workers to be creative, take risks, and perform at their highest level.2
Bill Gore’s ideas about management were influenced by Douglas McGregor’s The
Human Side of Enterprise, published when Gore was starting up his own company.
In it, McGregor identifies two models of management: the conventional model of
management, rooted in Taylor’s scientific management, and Weber’s principles of
bureaucracy, which McGregor termed “Theory X.” At its core is the assumption that
work is unpleasant, that employees are motivated only by money, and that management’s principal role is to prevent shirking. “Theory Y” was McGregor’s alternative
theory rooted in the work of the human relations school of management, which
assumes that individuals are self-motivated, anxious to solve problems, and capable of
working harmoniously on joint tasks.
Bill Gore’s dominant concern was the limits to organizational size. He believed that
the need for interpersonal trust would result in organizations declining in effectiveness once they reached about 200 members. Hence, in 1967, rather than expand their
Delaware facility, Bill and Vieve decided to build a second manufacturing facility in
Flagstaff, Arizona. From then on, Gore built a new facility each time an existing unit
reached 200 associates.
According to Malcolm Gladwell, Gore’s insistence upon small organizational units
is an application of a principle developed by anthropologist Robin Dunbar. According
to Dunbar, social groups are limited by individuals’ capacity to manage complex social
relationships. Among primates, the size of the typical social group for a species is correlated with the size of the neocortex of that species’ brain. For humans, Dunbar estimates that 148 is the maximum number of individuals that a person can comfortably
have social relations with. Across a range of different societies, Dunbar found that 150
was the typical maximum size of tribes, religious groups, and army units.3
Organization Structure and Management Principles
The Gore organization does include elements of hierarchy. For example, as a corporation, it is legally required to have a board of directors—this is chaired by Bob Gore.
There is also a CEO, Terri Kelly. The company is organized into four divisions (fabrics,
medical, industrial, and electronic products), each with a recognized “leader.” Within
these divisions there are specific business units, each based upon a group of products.
There are also specialized, company-wide functions such as human resources and
information technology.
What is lacking is a codified set of ranks and positions. Gore associates are expected
to adapt their roles to match their skills and aptitudes. The basic organizational units
are small, self-managing teams.
Relationships within teams and between teams are based upon the concept of a
lattice rather than a conventional hierarchy. The idea of a lattice is that every organizational member is connected to every other organizational member within the
particular facility. In the lattice, communication is peer to peer, not superior to subordinate. For Bill Gore, this was a more natural way to organize. He observed that in
632 CASES TO ACCOMPANY CONTEMPORARY STRATEGY ANALYSIS
most formal organizations it was through informal connections that things actually got
done: “Most of us delight in going around the formal procedures and doing things the
straightforward and easy way.”4
New associates are assigned to a “sponsor” whose job is to introduce the new hire
to the company and guide him or her through the lattice. The new hire is likely to
spend time with several teams during the first few months of employment. It is up
to the new associate and a team to find a good match. An associate is free to find
EXHIBIT 1
What we believe
Founder Bill Gore built the company on a set of beliefs
goals best by directing their efforts toward the suc-
and principles that guide us in the decisions we make,
cess of the corporation; action is prized; ideas are
in the work we do, and in our behavior toward others.
encouraged; and making mistakes is viewed as part
What we believe is the basis for our strong culture, which
of the creative process. We define freedom as being
connects Gore associates worldwide in a common bond.
empowered to encourage each other to grow in
knowledge, skill, scope of responsibility, and range
FUNDAMENTAL BELIEFS
of activities. We believe that associates will exceed
expectations when given the freedom to do so.
Belief in the individual: If you trust individuals and believe
in them, they will be motivated to do what’s right for
◆◆
with each other, our suppliers, our customers, and
the company.
anyone else with whom we do business.
Power of small teams: Our lattice organization harnesses
the fast decision-making, diverse perspectives, and col-
◆◆
laboration of small teams.
All in the same boat: All Gore associates are part owners of
the company through the associate stock plan. Not only
does this allow us to share in the risks and rewards of the
company, it gives us an added incentive to stay committed to its long-term success. As a result, we feel that
we are all in this effort together and believe we should
always consider what’s best for the company as a whole
when making decisions.
Long-term view: Our investment decisions are based on
long-term payoff and our fundamental beliefs are not
sacrificed for short-term gain.
GUIDING PRINCIPLES
◆◆
Fairness: everyone at Gore sincerely tries to be fair
Commitment: we are not assigned tasks; rather, we
each make our own commitments and keep them.
◆◆
Waterline: everyone at Gore consults with other
associates before taking actions that might be
“below the waterline”—causing serious damage
to the company.
Working in Our Unique Culture
Our founder Bill Gore once said, “The objective of the
Enterprise is to make money and have fun doing so.” And
we still believe that, more than 50 years later.
Because we are all part owners of the company
through the associate stock plan, Gore associates expect
a lot from each other. Innovation and creativity; high
ethics and integrity; making commitments and standing
Freedom: the company was designed to be an orga-
behind them. We work hard at living up to these expec-
nization in which associates can achieve their own
tations as we strive for business success. But we also trust
CASE 22 W. L. Gore & Associates: Rethinking Management 633
a new sponsor if desired. Typically, each associate works on two or three different
project teams.
Annual reviews are peer based. Information is collected from at least 20 other associates. Each associate is then ranked against every other associate within the unit in
terms of overall contribution. This ranking determines compensation.
The company’s beliefs, management principles, and work culture are articulated on
its website (Exhibit 1).
and respect each other and believe it’s important to cele-
More importantly, only you can make a commitment to
brate success.
do something (e.g., a task, a project, or a new role)—but
Gore is much less formal than most workplaces. Our
once you make a commitment, you will be expected
relationships with other associates are open and informal
to meet it. A “core commitment” is your primary area of
and we strive to treat everyone respectfully and fairly. This
concentration. You may take on additional commitments
type of environment naturally promotes social interac-
depending on your interests, the company’s needs, and
tion and many associates have made lifelong friends with
your availability.
those they met working at Gore.
Do Something You’re
Passionate About
At Gore, we believe it’s important to have passion for what
you do. If you’re passionate about your work, you are naturally going to be highly self-motivated and focused. If you
feel pride and ownership, you will want to do whatever it
takes to be successful and have an impact. So when you
apply for an opportunity at Gore, be sure you’re going to
be passionate about the work you’ll be doing.
The Lattice Structure and Individual
Accountability
Gore’s unique “lattice” management structure, which illustrates a nonhierarchical system based on interconnection among associates, is free from traditional bosses and
managers. There is no assigned authority, and we become
leaders based on our ability to gain the respect of our
peers and to attract followers.
You will be responsible for managing your own workload and will be accountable to others on your team.
Relationships and Direct
Communication
Relationships are everything at Gore—relationships with
each other, with customers, with vendors and suppliers,
and with our surrounding communities. We encourage
people to build and maintain long-term relationships by
communicating directly. Of course, we all use e-mail, but
we find that face-to-face meetings and phone calls work
best when collaborating with others.
Sponsors
Everyone at Gore has a sponsor, who is committed to
helping you succeed. Sponsors are responsible for supporting your growth, for providing good feedback on
your strengths and areas that offer opportunities for
development and for helping you connect with others in
the organization.
Source: www.gore.com/en_xx/careers/whoweare/about-gore.
html, W. L. Gore & Associates: Beliefs, Principles and Culture.
Reproduced by permission of W. L. Gore & Associates.
634 CASES TO ACCOMPANY CONTEMPORARY STRATEGY ANALYSIS
Leadership
Leadership is important at Gore, but the basic principle is that of natural leadership:
“If you call a meeting and people show up—you’re a leader.”5 Teams can appoint
team leaders; they can also replace their team leaders. As a result, every team leader’s
accountability is to the team. “Someone who is accustomed to snapping their fingers
and having people respond will be frustrated,” says John McMillan, a Gore associate.
“I snap my fingers and nobody will do anything. My job is to acquire followership, articulate a goal and get there … and hope the rest of the people think that makes sense.”6
CEO Terri Kelly compares the conventional approach to leadership with Gore’s
“distributed leadership model”:
The model of the single powerful leader who operates through command and control
is attractive in its simplicity … In reality, it is impractical to expect the single leader to
have all the answers, and history has shown that relying upon rigid control mechanisms will not prevent catastrophic outcomes. It’s far better to rely upon a broad base
of individuals and leaders who share a common set of values and feel personal ownership for the overall success of the organization. And as organizations grow in size
and complexity, it becomes even more critical to distribute the leadership load … The
capacity of the organization increases when it distributes the leadership load to competent leaders on the ground who can make the best knowledge-based decisions.7
She argues that talented newcomers to the workforce adapt much more easily to the
distributed leadership than to traditional modes of management. Young people recognize that they have choices, are not wedded to a single organization, and will move to
where they perceive the best opportunities. As a result, companies that persevere with
traditional management models will find it difficult to retain the best talent. At the same
time, warns Kelly, making the shift to a distributed leadership model is a challenge to
top management. It requires a fundamental change in the values, attitudes, and reward
systems that are deeply embedded in most organizations:
It will require a shift within the organization from valuing a key few to valuing the
unique contributions of many. Individuals will need to feel they have a voice and can
be heard. Leaders will need to recognize that their primary role is to empower others
versus build their own power. They will no longer stand behind a title with assumed
authority to tell people what to do.
Leaders’ focus will shift to creating the right environment and instilling the right values
that can enable capable leaders to emerge. They will recognize that they are only
leaders if they have willing followers, and that this needs to be earned every day.
Ultimately, their contributions will be judged by the people they lead.
Most rewards systems depend upon higher level management to assess the effectiveness of the leader. This view can be somewhat limited and biased by the fact the
managers were often the ones who put the leader in the role in the first place. Those
who know their leaders best are typically the individuals they lead. If you want individuals to have a voice in the organization, they must also have a voice in selecting
and evaluating their leaders.
CASE 22 W. L. Gore & Associates: Rethinking Management 635
In our company, we have found it very useful to adopt a peer ranking system. All
associates get the opportunity to rank members of their team, including their leaders.
They are asked to create a contribution list in rank order based on who they believe
is making the greatest contribution to the success of the enterprise. This approach
serves as an excellent form of “checks and balances” when it comes to who is truly
recognized for their contributions as well as for overall leadership.8
Innovation
The success of Gore’s unusual management system is its capacity for innovation. B
etween
1976 and 2017, Gore received 1428 US patents; in each year between 2012 and 2018 it
was awarded between 70 and 108 patents. Even more remarkable has been its ability to
extend its existing technological breakthroughs to a wide variety of new applications.
Central to Gore’s ability to innovate is its willingness to allow individuals the freedom
to pursue their own projects: each associate is allowed a half day each week of “dabble
time.” New product ideas typically originate with customers or individual employees
and are then developed by a self-directed team. Gore’s Elixir guitar strings began when
several amateur guitarists in the research department began experimenting with different coatings for guitar strings, then sent samples to musicians to try.
The source of Gore’s innovations is not so much its brilliant technologists and engineers as a management system that attracts top talent and provides an environment that
inspires creativity and collaboration. Gary Hamel closes his discussion of Gore with the
following challenge:
Bill Gore was a 40-something chemical engineer when he laid the foundations for his
innovation democracy. I don’t know about you, but a middle-aged polytetrafluoroethylene-loving chemist isn’t my mental image of a wild-eyed management innovator.
Yet, think about how radical Gore’s vision must have seemed back in 1958. Fifty years
later, postmodern management hipsters throw around terms like complex adaptive
systems and self-organizing teams. Well, they’re only a half century behind the curve.
So ask yourself, am I dreaming big enough yet? Would my management innovation
agenda make Bill Gore proud?9
Notes
1. M. Gladwell, The Tipping Point (Little, Brown & Co.,
London, 2000).
2. “W. L. Gore & Associates, Inc. History,” http://www.fundinguniverse.com/company-histories/WL-Gore-amp;-Associates-Inc-Company-History.html, accessed July 20, 2015.
3. Gladwell, op. cit.: 177–181.
4. Quoted by G. Hamel with B. Breen, The Future of
Management (Harvard Business School Press, Boston, MA,
2007, p. 87).
5. Reprinted by permission of Harvard Business School
Press from The Future of Management by Gary Hamel.
Boston, MA, 2007, p. 100 Copyright © 2007 by the Harvard
Business School Publishing Corporation; all rights reserved.
6. “W. L. Gore & Associates, Inc.: Quality’s Different Drummer,” IMPO Magazine, January 14, 2002, http://www.
impomag.com/articles/2002/01/wl-gore-associates-incqualitys-different-drummer, accessed July 20, 2015.
7. Terri Kelly, “No More Heroes: Distributed Leadership,”
Management Innovation eXchange (April 8, 2010), http://
www.managementexchange.com/blog/no-more-heroes,
accessed July 20, 2015.
8. Ibid.
9. Reprinted by permission of Harvard Business School Press
from The Future of Management by Gary Hamel. Boston,
MA, 2007, p. 100. Copyright © 2007 by the Harvard
Business School Publishing Corporation; all rights reserved.
Case 22
W. L. Gore &
A ssociates:
Rethinking
Management
If a man could flow with the stream, grow with the way of nature, he’d accomplish
more and he’d be happier doing it than bucking the flow of the water.
—W. L. GORE
Malcolm Gladwell (author of The Tipping Point and Outliers) described his visit to
W. L. Gore & Associates (Gore) as follows:
When I visited a Gore associate named Bob Hen at one of the company’s plants
in Delaware, I tried, unsuccessfully, to get him to tell me what his position was.
I suspected, from the fact that he had been recommended to me, that he was one of
the top executives. But his office wasn’t any bigger than anyone else’s. His card just
called him an “associate.” He didn’t seem to have a secretary, one that I could see
anyway. He wasn’t dressed any differently from anyone else, and when I kept asking
the question again and again, all he finally said, with a big grin, was, “I’m a meddler.”1
The absence of job titles and the lack of the normal symbols of hierarchy are not
the only things that are different about Gore. Since its founding in 1958, Gore has
deliberately adopted a system of management that contrasts sharply with that of other
established corporations. While the styles of management of all start-up companies
reflect the personality and values of their founders, the remarkable thing about Gore is
that, as a $3.2 billion company with 9500 employees (“associates”) in 25 countries of
the world, its organizational structure and management systems continue to defy the
principles under which corporations of similar size and complexity are managed.
The Founding of Gore
Wilbert L. (Bill) Gore left DuPont in 1958 after 17 years as a research scientist. At
DuPont, Gore had been working on a new synthetic material called polytetrafluoroethylene (PTFE), which it had branded “Teflon.” Gore was convinced that DuPont’s
commitment to supplying large industrial markets with basic chemical products had
This case was prepared by Robert M. Grant. ©2019 Robert M. Grant.
630 CASES TO ACCOMPANY CONTEMPORARY STRATEGY ANALYSIS
caused it to overlook new applications for PTFE. When Bill Gore and his wife, Vieve,
formed their own business in 1958, they were keen, not only to explore these novel
applications, but also to create the energy and passion that he had experienced when
working in small research teams at DuPont on those occasions when they were given
the freedom to pursue innovation.
Working out of their home in Newark, Delaware, and with the help of their
son, Bob, the Gores’ first product was Teflon-insulated cable. However, their breakthrough was Bob Gore’s discovery of the potential of Teflon to be stretched and
laced with microscopic holes. The resulting fabric shed water droplets but was also
breathable. Gore-Tex received a US patent in 1976. Not only did it have a wide
range of applications for outdoor clothing, the fact that Gore-Tex was chemically
inert and resistant to infection made it an excellent material for medical applications
such as artificial arteries and intravenous bags. The potential to vary the size of
the microscopic holes in Gore-Tex also made it ideal for a wide range of filtration
applications.
Since then, continuous innovation has resulted in a growing array of consumer products (such as guitar strings, dental floss, footwear components, and vacuum cleaner
bags), industrial products (such as fuel cell components, electronic components, fire
safety fabrics, and rope fibers), and medical products (such as implantable medical
devices, pharmaceutical tubing products, and sealants).
Origins of the Gore Management Philosophy
FundingUniverse.com describes the development of Bill Gore’s management ideas
as follows:
From their basement office, the Gores expanded into a separate production facility in
their hometown of Newark, Delaware. Sales were brisk after initial product introductions. By 1965, just seven years after the business had started, Gore & Associates was
employing about 200 people. It was about that time that Gore began to develop and
implement the unique management system and philosophy for which his company
would become recognized. Gore noticed that as his company had grown, efficiency
and productivity had started to decline. He needed a new management structure, but
he feared that the popular pyramid management structure that was in vogue at the
time suppressed the creativity and innovation that he valued so greatly. Instead of
adopting the pyramid structure, Gore decided to create his own system.
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.
Under the system that Gore developed, any person was allowed to make a decision
as long as it was fair, encouraged others, and made a commitment to the company.
Consultation was required only for decisions that could potentially cause serious
damage to the enterprise. Furthermore, new associates joined the company on the
same effective authority level as all the other workers, including Bill and Vieve. There
were no titles or bosses, with only a few exceptions, all commands were replaced by
personal commitments.
New employees started out working in an area best suited to their talents, under the
guidance of a sponsor. As the employee progressed there came more responsibility,
CASE 22 W. L. Gore & Associates: Rethinking Management 631
and workers were paid according to their individual contribution. “Team members
know who is producing,” Bill explained in a February 1986 issue of the Phoenix
Business Journal. “They won’t put up with poor performance. There is tremendous
peer pressure. You promote yourself by gaining knowledge and working hard, every
day. There is no competition, except with yourself.” The effect of the system was to
encourage workers to be creative, take risks, and perform at their highest level.2
Bill Gore’s ideas about management were influenced by Douglas McGregor’s The
Human Side of Enterprise, published when Gore was starting up his own company.
In it, McGregor identifies two models of management: the conventional model of
management, rooted in Taylor’s scientific management, and Weber’s principles of
bureaucracy, which McGregor termed “Theory X.” At its core is the assumption that
work is unpleasant, that employees are motivated only by money, and that management’s principal role is to prevent shirking. “Theory Y” was McGregor’s alternative
theory rooted in the work of the human relations school of management, which
assumes that individuals are self-motivated, anxious to solve problems, and capable of
working harmoniously on joint tasks.
Bill Gore’s dominant concern was the limits to organizational size. He believed that
the need for interpersonal trust would result in organizations declining in effectiveness once they reached about 200 members. Hence, in 1967, rather than expand their
Delaware facility, Bill and Vieve decided to build a second manufacturing facility in
Flagstaff, Arizona. From then on, Gore built a new facility each time an existing unit
reached 200 associates.
According to Malcolm Gladwell, Gore’s insistence upon small organizational units
is an application of a principle developed by anthropologist Robin Dunbar. According
to Dunbar, social groups are limited by individuals’ capacity to manage complex social
relationships. Among primates, the size of the typical social group for a species is correlated with the size of the neocortex of that species’ brain. For humans, Dunbar estimates that 148 is the maximum number of individuals that a person can comfortably
have social relations with. Across a range of different societies, Dunbar found that 150
was the typical maximum size of tribes, religious groups, and army units.3
Organization Structure and Management Principles
The Gore organization does include elements of hierarchy. For example, as a corporation, it is legally required to have a board of directors—this is chaired by Bob Gore.
There is also a CEO, Terri Kelly. The company is organized into four divisions (fabrics,
medical, industrial, and electronic products), each with a recognized “leader.” Within
these divisions there are specific business units, each based upon a group of products.
There are also specialized, company-wide functions such as human resources and
information technology.
What is lacking is a codified set of ranks and positions. Gore associates are expected
to adapt their roles to match their skills and aptitudes. The basic organizational units
are small, self-managing teams.
Relationships within teams and between teams are based upon the concept of a
lattice rather than a conventional hierarchy. The idea of a lattice is that every organizational member is connected to every other organizational member within the
particular facility. In the lattice, communication is peer to peer, not superior to subordinate. For Bill Gore, this was a more natural way to organize. He observed that in
632 CASES TO ACCOMPANY CONTEMPORARY STRATEGY ANALYSIS
most formal organizations it was through informal connections that things actually got
done: “Most of us delight in going around the formal procedures and doing things the
straightforward and easy way.”4
New associates are assigned to a “sponsor” whose job is to introduce the new hire
to the company and guide him or her through the lattice. The new hire is likely to
spend time with several teams during the first few months of employment. It is up
to the new associate and a team to find a good match. An associate is free to find
EXHIBIT 1
What we believe
Founder Bill Gore built the company on a set of beliefs
goals best by directing their efforts toward the suc-
and principles that guide us in the decisions we make,
cess of the corporation; action is prized; ideas are
in the work we do, and in our behavior toward others.
encouraged; and making mistakes is viewed as part
What we believe is the basis for our strong culture, which
of the creative process. We define freedom as being
connects Gore associates worldwide in a common bond.
empowered to encourage each other to grow in
knowledge, skill, scope of responsibility, and range
FUNDAMENTAL BELIEFS
of activities. We believe that associates will exceed
expectations when given the freedom to do so.
Belief in the individual: If you trust individuals and believe
in them, they will be motivated to do what’s right for
◆◆
with each other, our suppliers, our customers, and
the company.
anyone else with whom we do business.
Power of small teams: Our lattice organization harnesses
the fast decision-making, diverse perspectives, and col-
◆◆
laboration of small teams.
All in the same boat: All Gore associates are part owners of
the company through the associate stock plan. Not only
does this allow us to share in the risks and rewards of the
company, it gives us an added incentive to stay committed to its long-term success. As a result, we feel that
we are all in this effort together and believe we should
always consider what’s best for the company as a whole
when making decisions.
Long-term view: Our investment decisions are based on
long-term payoff and our fundamental beliefs are not
sacrificed for short-term gain.
GUIDING PRINCIPLES
◆◆
Fairness: everyone at Gore sincerely tries to be fair
Commitment: we are not assigned tasks; rather, we
each make our own commitments and keep them.
◆◆
Waterline: everyone at Gore consults with other
associates before taking actions that might be
“below the waterline”—causing serious damage
to the company.
Working in Our Unique Culture
Our founder Bill Gore once said, “The objective of the
Enterprise is to make money and have fun doing so.” And
we still believe that, more than 50 years later.
Because we are all part owners of the company
through the associate stock plan, Gore associates expect
a lot from each other. Innovation and creativity; high
ethics and integrity; making commitments and standing
Freedom: the company was designed to be an orga-
behind them. We work hard at living up to these expec-
nization in which associates can achieve their own
tations as we strive for business success. But we also trust
CASE 22 W. L. Gore & Associates: Rethinking Management 633
a new sponsor if desired. Typically, each associate works on two or three different
project teams.
Annual reviews are peer based. Information is collected from at least 20 other associates. Each associate is then ranked against every other associate within the unit in
terms of overall contribution. This ranking determines compensation.
The company’s beliefs, management principles, and work culture are articulated on
its website (Exhibit 1).
and respect each other and believe it’s important to cele-
More importantly, only you can make a commitment to
brate success.
do something (e.g., a task, a project, or a new role)—but
Gore is much less formal than most workplaces. Our
once you make a commitment, you will be expected
relationships with other associates are open and informal
to meet it. A “core commitment” is your primary area of
and we strive to treat everyone respectfully and fairly. This
concentration. You may take on additional commitments
type of environment naturally promotes social interac-
depending on your interests, the company’s needs, and
tion and many associates have made lifelong friends with
your availability.
those they met working at Gore.
Do Something You’re
Passionate About
At Gore, we believe it’s important to have passion for what
you do. If you’re passionate about your work, you are naturally going to be highly self-motivated and focused. If you
feel pride and ownership, you will want to do whatever it
takes to be successful and have an impact. So when you
apply for an opportunity at Gore, be sure you’re going to
be passionate about the work you’ll be doing.
The Lattice Structure and Individual
Accountability
Gore’s unique “lattice” management structure, which illustrates a nonhierarchical system based on interconnection among associates, is free from traditional bosses and
managers. There is no assigned authority, and we become
leaders based on our ability to gain the respect of our
peers and to attract followers.
You will be responsible for managing your own workload and will be accountable to others on your team.
Relationships and Direct
Communication
Relationships are everything at Gore—relationships with
each other, with customers, with vendors and suppliers,
and with our surrounding communities. We encourage
people to build and maintain long-term relationships by
communicating directly. Of course, we all use e-mail, but
we find that face-to-face meetings and phone calls work
best when collaborating with others.
Sponsors
Everyone at Gore has a sponsor, who is committed to
helping you succeed. Sponsors are responsible for supporting your growth, for providing good feedback on
your strengths and areas that offer opportunities for
development and for helping you connect with others in
the organization.
Source: www.gore.com/en_xx/careers/whoweare/about-gore.
html, W. L. Gore & Associates: Beliefs, Principles and Culture.
Reproduced by permission of W. L. Gore & Associates.
634 CASES TO ACCOMPANY CONTEMPORARY STRATEGY ANALYSIS
Leadership
Leadership is important at Gore, but the basic principle is that of natural leadership:
“If you call a meeting and people show up—you’re a leader.”5 Teams can appoint
team leaders; they can also replace their team leaders. As a result, every team leader’s
accountability is to the team. “Someone who is accustomed to snapping their fingers
and having people respond will be frustrated,” says John McMillan, a Gore associate.
“I snap my fingers and nobody will do anything. My job is to acquire followership, articulate a goal and get there … and hope the rest of the people think that makes sense.”6
CEO Terri Kelly compares the conventional approach to leadership with Gore’s
“distributed leadership model”:
The model of the single powerful leader who operates through command and control
is attractive in its simplicity … In reality, it is impractical to expect the single leader to
have all the answers, and history has shown that relying upon rigid control mechanisms will not prevent catastrophic outcomes. It’s far better to rely upon a broad base
of individuals and leaders who share a common set of values and feel personal ownership for the overall success of the organization. And as organizations grow in size
and complexity, it becomes even more critical to distribute the leadership load … The
capacity of the organization increases when it distributes the leadership load to competent leaders on the ground who can make the best knowledge-based decisions.7
She argues that talented newcomers to the workforce adapt much more easily to the
distributed leadership than to traditional modes of management. Young people recognize that they have choices, are not wedded to a single organization, and will move to
where they perceive the best opportunities. As a result, companies that persevere with
traditional management models will find it difficult to retain the best talent. At the same
time, warns Kelly, making the shift to a distributed leadership model is a challenge to
top management. It requires a fundamental change in the values, attitudes, and reward
systems that are deeply embedded in most organizations:
It will require a shift within the organization from valuing a key few to valuing the
unique contributions of many. Individuals will need to feel they have a voice and can
be heard. Leaders will need to recognize that their primary role is to empower others
versus build their own power. They will no longer stand behind a title with assumed
authority to tell people what to do.
Leaders’ focus will shift to creating the right environment and instilling the right values
that can enable capable leaders to emerge. They will recognize that they are only
leaders if they have willing followers, and that this needs to be earned every day.
Ultimately, their contributions will be judged by the people they lead.
Most rewards systems depend upon higher level management to assess the effectiveness of the leader. This view can be somewhat limited and biased by the fact the
managers were often the ones who put the leader in the role in the first place. Those
who know their leaders best are typically the individuals they lead. If you want individuals to have a voice in the organization, they must also have a voice in selecting
and evaluating their leaders.
CASE 22 W. L. Gore & Associates: Rethinking Management 635
In our company, we have found it very useful to adopt a peer ranking system. All
associates get the opportunity to rank members of their team, including their leaders.
They are asked to create a contribution list in rank order based on who they believe
is making the greatest contribution to the success of the enterprise. This approach
serves as an excellent form of “checks and balances” when it comes to who is truly
recognized for their contributions as well as for overall leadership.8
Innovation
The success of Gore’s unusual management system is its capacity for innovation. B
etween
1976 and 2017, Gore received 1428 US patents; in each year between 2012 and 2018 it
was awarded between 70 and 108 patents. Even more remarkable has been its ability to
extend its existing technological breakthroughs to a wide variety of new applications.
Central to Gore’s ability to innovate is its willingness to allow individuals the freedom
to pursue their own projects: each associate is allowed a half day each week of “dabble
time.” New product ideas typically originate with customers or individual employees
and are then developed by a self-directed team. Gore’s Elixir guitar strings began when
several amateur guitarists in the research department began experimenting with different coatings for guitar strings, then sent samples to musicians to try.
The source of Gore’s innovations is not so much its brilliant technologists and engineers as a management system that attracts top talent and provides an environment that
inspires creativity and collaboration. Gary Hamel closes his discussion of Gore with the
following challenge:
Bill Gore was a 40-something chemical engineer when he laid the foundations for his
innovation democracy. I don’t know about you, but a middle-aged polytetrafluoroethylene-loving chemist isn’t my mental image of a wild-eyed management innovator.
Yet, think about how radical Gore’s vision must have seemed back in 1958. Fifty years
later, postmodern management hipsters throw around terms like complex adaptive
systems and self-organizing teams. Well, they’re only a half century behind the curve.
So ask yourself, am I dreaming big enough yet? Would my management innovation
agenda make Bill Gore proud?9
Notes
1. M. Gladwell, The Tipping Point (Little, Brown & Co.,
London, 2000).
2. “W. L. Gore & Associates, Inc. History,” http://www.fundinguniverse.com/company-histories/WL-Gore-amp;-Associates-Inc-Company-History.html, accessed July 20, 2015.
3. Gladwell, op. cit.: 177–181.
4. Quoted by G. Hamel with B. Breen, The Future of
Management (Harvard Business School Press, Boston, MA,
2007, p. 87).
5. Reprinted by permission of Harvard Business School
Press from The Future of Management by Gary Hamel.
Boston, MA, 2007, p. 100 Copyright © 2007 by the Harvard
Business School Publishing Corporation; all rights reserved.
6. “W. L. Gore & Associates, Inc.: Quality’s Different Drummer,” IMPO Magazine, January 14, 2002, http://www.
impomag.com/articles/2002/01/wl-gore-associates-incqualitys-different-drummer, accessed July 20, 2015.
7. Terri Kelly, “No More Heroes: Distributed Leadership,”
Management Innovation eXchange (April 8, 2010), http://
www.managementexchange.com/blog/no-more-heroes,
accessed July 20, 2015.
8. Ibid.
9. Reprinted by permission of Harvard Business School Press
from The Future of Management by Gary Hamel. Boston,
MA, 2007, p. 100. Copyright © 2007 by the Harvard
Business School Publishing Corporation; all rights reserved.
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