Bosses are a bad
What is the secret of WL Gore's success? The high-tech materials company, creator of Gore-Tex fabric, sophisticated surgical products, cables and more besides, is committed to manufacturing leading-edge products through advanced engineering.
You would think it is a pretty tight ship. But no. "It's a very chaotic environment," declares Terri Kelly, the company's chief executive officer, with obvious pride. And there's more. "For some reason, management just never took hold in our company ... we don't like the 'manager' word ... we get very angry when people call [the staff] employees ..."
So there you have it. If you want to achieve 50 years of almost continuous growth, you now know what you have to do: abolish management and get rid of all the employees.
That is easy for Ms Kelly to say. When WL Gore was founded, by husband-and-wife team Bill and Vieve Gore in 1958, they were able to invent a corporate culture from scratch. Five decades on, and with 8,600 "associates" (never employees) in place around the world, that culture remains intact. With sales of more than $2.5bn a year, it is a successful culture, too.
The corporate hierarchy
at Gore, such as it is, is almost completely flat.
Leaders emerge through a democratic process rather than being appointed from the top, and peer appraisal is crucial to both salary levels and career advancement.
Business units, based
around specific products, never grow too large. As soon as they do, they
are split up. Bureaucracy is kept to a minimum. Teams are self-organising.
Even the appointment of the new CEO three years ago was a group decision,
with the opinions of dozens of staff members being sought.
"I wasn't expecting
it," she explains. "I was as shocked as the next person.
But surely it changes you, getting the top job, even in a non-hierarchical setting? "It's not a title where you've got assumed authority or control, you really have to earn that every day," Ms Kelly says. "So for me, I haven't really changed ... I'm sure there are folks who look at me [differently], more so externally than internally, frankly. But internally, it's still very much the same leadership model that all of our successful leaders subscribe to, which is you have to sell your ideas, even if you're the CEO. You have to explain the rationale behind your decision and do a lot of internal selling."
Most democracies have general elections every four or five years. Companies cannot take that long to make up their minds on what to do next. But if Gore is organised on almost democratic grounds, does not all this laboured, consensual decision making take far too long? Ms Kelly thinks not. Yes, it may take longer to reach a decision. But once it is in place, it is pursued energetically.
"I think that
what you find in a lot of companies is that if there isn't true support
for the decision, it gets undermined along the way," she says.
Bill Gore left DuPont to found his own company at the age of 46. He drew inspiration from Douglas McGregor's The Human Side of the Enterprise, which was published in 1960. This book discussed two management approaches - theory X and theory Y. Theory X managers believe that employees are really only there for the money and will do as little work as they can get away with. Theory Y managers believe that people are self-motivated and keen to find meaning in their work. Guess which theory Gore found more attractive.
Hence the company's
squeamishness about "employees" and "managers". It
wants to go beyond a narrow transactional relationship between those who
lead and those who follow. "Bill Gore had that vision right from
the beginning, that everyone participates in the growth of the company,
everyone's a shareholder of the company ... it's a partnership, and you
are part of that enterprise.
Gore is not the only
company to experiment with management conventions.
But flat hierarchies
can be confusing to traditional managers. "When you invite 'the head,
the heart, the spirit' of associates, you get the normal dynamic of teams
forming and storming and so it's very chaotic," Ms Kelly says. "Do
the leaders have the stomach for that? It doesn't mean you can't put discipline
in place, but you have to be willing to almost give up power.
In Gary Hamel's book,
The Future of Management, he quotes a Gore associate, Rich Buckingham,
who sums up the company's approach. "We vote with our feet.
As a family-controlled business (but with high levels of associate ownership), Gore is free to pursue its own idiosyncratic methods. But there are risks with this cult-like style of doing business. Newcomers may find it too alien. There could be intolerance for those who do not grasp the Gore way. And the denial that "command and control" management might on occasion be necessary could sow confusion when decisive action is required.
As a private company,
Gore is unused to journalistic scrutiny. When asked about Gore's contracts
to provide the fibres for Wimbledon's new retractable roof, a startled
Ms Kelly replies: "No one's supposed to know about that.
Still, loyal Gore associates remain permanently on message. "If you tell anybody what to do here, they'll never work for you again," one of them told Prof Hamel. Telling people what to do? Now, who on earth ever thought that could possibly be a good idea?
December 1 2008