Case-study: A Flat, Manufacturing Company with over 10,000 employees

GORE-TEX®_LogoWhen Fast Company set out to find the most innovative company in America – one that had a longstanding track record of innovation and that did not have the gigantic resources of a company like GE – they settled on W.L. Gore and Associates. The number one distinctive advantage that Gore had? Their culture. Fast Company wasn’t alone in their recognition. Gore is  one of only a few companies to appear on all of the U.S. “100 Best Companies to Work For” lists since Robert Levering and Milton Moskowitz initiated the ranking in 1984. Gary Hamel, a management guru, profiled it in Management Exchange and labeled it an “innovation democracy.”

First of all, who is W.L. Gore? Its tagline is “a technology and science enterprise with people and relationships at its core.” When it was founded by Bill Gore in 1958, it initially offered just electronic products, but now it now offers “over 1000 products—Gore-Tex fabric, medical applications, and a wide range of  industrial and electronics products,” all designed to improve quality of life.” A private company with annual sales of over $3 billion, it employs “more than 10,000 employees, called associates, with manufacturing facilities” in over 30 countries around the world. It is not G.E., but it certainly isn’t a Silicon start-up.

Since its founding, Gore has been a team-based, flat organization that fosters personal initiative. His rationale was this:

At a hierarchical company, the car pool is the only place where people talk to one another freely without regard for the chain of command. He also observed that when there’s a crisis, a company creates a task force and throws out the rules. That’s when organizations take risks and make big breakthroughs. Why, he wondered, should you have to wait for a crisis?

That is not to say that there isn’t a very basic structure in place. There is a CEO, four major divisions, a number of product-focused business units, and the usual business support functions, each with a recognized leader.  More importantly, they have a structure of mentorship:

Each new associate (what they call an employee) is assigned a sponsor to decode the jargon, demystify the lattice, and circulate him or her among several teams, helping find a good fit between his or her skills and the needs of a particular team. A sponsor makes a personal commitment to an associate’s development and success.

What does it mean to be an associate?

As a Gore “associate,” you’re supposed to morph your role over time to match your skills. You’re not expected to fit into some preconceived box or standardized organizational niche. Your compensation is tied to your “contribution” and decided by a committee, much the way it’s done in law firms… Individuals at Gore negotiate job assignments and responsibilities with their peers, depending on what a team is working on. You can always say “no,” but once you’ve made a commitment, it’s a near sacred oath. You’re accountable to your team. The negotiating process can be time-consuming, but Gore believes the payoff is worth it, in morale and in the bringing together of the diverse perspectives and talents needed for success…

Fast Company described its culture as “one where people feel free to pursue ideas on their own, communicate with one another, and collaborate out of self-motivation rather than a sense of duty.” Associates are encouraged to spend a portion of their time —  around 10% — on risky, new ideas. Its private ownership means that associates are free from quarterly, short-term pressure and can slowly nurture inventive ideas into profitability.

How does this flatness work in a company of over 10,000 associates scattered over 30 countries?

Gore’s commitment to keeping its operations small and informal is one key. It generally doesn’t allow a facility to grow to more than 200 people. That reflects another of Bill’s beliefs: that once a unit reaches a certain size, “we decided” becomes “they decided.” And it mobilizes its plants into clusters, like the 10 factories located in Flagstaff.

But how does Gore foster a sense of unity throughout the company?

The most powerful manifestation of “we’re all in the same boat” is that all associates are part owners of the company through the associate stock plan. Gore believe that it not only allows everyone to share in the risks and rewards of the company, but also gives them an added incentive to stay committed to its long term success, and always consider what’s in the best interest of the company when making decisions.

These are the firm’s core values:

  • Fairness to each other and everyone with whom we come in contact.
  • 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
  • Consultation with other associates before undertaking actions that could impact the reputation of the company.

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