Gore’s no-bosses philosophy gives associates room to improve: Best Companies to Work For in Greater China 2014
Innovative manufacturer has an equally inventive approach to its corporate environment
With an annual turnover of more than US$3 billion, manufacturing plants in the United States, Germany, Britain, Japan and China, sales offices worldwide, and over 10,000 employees – or “associates” as they are referred to – there’s a lot more to W. L. Gore & Associates than meets the eye.
A private company, Gore made its name by creating innovative, technology-driven solutions, from medical devices to high performance fabrics to guitar strings.
The common thread that ties Gore’s thousands of varied products together is the science of a versatile group of materials called ePTFE fluoropolymers, which have evolved to include a growing array of complementary technologies. Gore scientists have developed a range of high-performing products that they group into four general divisions: electronic, industrial, medical and fabrics.
Electronic products include cables and cable assemblies for computers, satellites and telecommunications equipment, and shielding materials that prevent electromagnetic interference in phones and other wireless devices. Industrial products include filter bags for industrial smokestacks, tiny vents for automotive systems and computer disk drives, and gaskets for industrial pipes and flanges.
Medical products include vascular grafts to replace damaged arteries, stent grafts that restore blood flow in blocked or diseased vessels, prostheses that close holes in the heart, and patches for hernia repairs. Fabric products are used in both recreational and occupational environments.
The company has a distinct culture based on a lack of formal hierarchy – which means no bosses.
Bill Gore and his wife Genevieve founded the company in 1958 with their life savings and started up in the basement of their house in Newark, Delaware. They started working with PTFE, a polymer that Bill Gore was convinced had a great future.
According to Dave Welch, Asia-Pacific regional leader at Gore, people who knew the Gores all seem to have a similar comment – it was evident from the beginning how much they cared about people, how much thought they put into the kind of work environment they wanted to establish, and how much they focused on producing great products.
Their aim was to create an environment in which people were able to develop their potential and creativity without being hindered by hierarchical communication pyramids. They believed that this atmosphere would contribute to satisfied, engaged associates working together in high-performance teams, which in turn would generate valuable, innovative products.
A few years later, Bill Gore outlined his corporate philosophy, in which there was no room for ranks and titles and no bosses in the conventional sense. “At Gore, we don’t manage people,” he wrote. “We expect people to manage themselves.”
In contrast to a traditional pyramidal management hierarchy, Bill coined the term “the lattice” to describe the flat organisation at Gore. In a lattice, direct lines of communication connect every associate, rather than travelling through bosses or predetermined channels.
Bill Gore did not want a hierarchy, but he did want leaders – so he decided there would be no management pyramid, but rather a flat “lattice-like” network where leaders emerged and then built and led teams to deliver new products.
For many outside Gore, this is the most difficult thing to understand. How can a business not have a chain of command? Who is in charge and who is accountable? But remarkably it works, and Bill’s vision is still in place.
Now, just over 55 years later, Gore has built an enviable reputation and is recognised as one of the world’s best employers. It is one of only a few companies to have been on Fortune’s annual 100 Best Companies to Work For list since the ranking began in 1984, and earned the number 22 spot in 2014.
Gore also earned the number four spot in the World’s Best Multinational Workplace list from the Great Place to Work Institute in 2014. This is the world’s largest study of workplace excellence and identifies the top 25 best multinational companies in terms of workplace culture.
In addition, Gore has been cited as a best workplace in France, Germany, Korea, Italy, Sweden and Britain, as well as winning recognition as one of the Best Companies to Work For in Greater China in 2013 and 2014.
Gore continues to operate in a lattice structure – a flat organisation that guarantees direct one-to-one communication – and each associate is a shareholder. Welch says that everyone in Gore shares a set of core beliefs – in the individual, in the power of small teams, in being in the same boat and in taking a long-term view – which Bill Gore firmly believed in. “Taking a long-term view extends to Gore’s investment decisions, which are based on long-term payoff, and where fundamental beliefs are not sacrificed for short-term gain,” he says.
Flowing from the core beliefs are four shared guiding principles: freedom, fairness, commitment and “waterline”.
Bill Gore’s definition of the waterline principle is that “everyone will consult with other associates before taking actions that might be ‘below the waterline’ and cause serious damage to the enterprise.” The idea is that associates have a great deal of latitude in their day-to-day choices and are free to drill holes in the boat’s side above where the water meets the boat. However, if they have to make a decision that could do serious damage and potentially sink the ship by creating a hole below the waterline, they need to seek the input of other knowledgeable associates.
“We are all in this enterprise together and our actions have an effect on fellow associates and on the success of the company,” says Stevy Yao, also Asia-Pacific regional leader at Gore. “Therefore, we should always consider what is best for the enterprise when making decisions. When the enterprise is successful, we share in the reward. Conversely, when the enterprise faces challenges, we share in the risk.”
Associates make commitments they are expected to fulfil. “Everyone makes his or her own commitments, and associates need to be able to count on each other to follow through on them. We are not assigned tasks – we believe commands produce obedience at best, and little creativity – but the commitments we make call upon the total energies, talents and dedication of the associates making them,” Yao says.
One of Bill Gore’s best-known quotes is: “You’re only a leader if someone is following you,” but at Gore, leaders are not appointed – they emerge. A good example was the selection of current CEO, Terri Kelly.
When the previous group CEO retired in 2005, there was no shortlist of preferred candidates. As well as discussions at board level, about 100 associates were polled to nominate someone they would be willing to follow. Kelly emerged as the new CEO, but as she says: “We weren’t given a list of names – we were free to choose anyone in the company. To my surprise, it was me.”
Welch says Gore is a tremendously empowered environment. Associates are expected to ask questions and challenge the opinions of leaders.
“Leadership in Gore is far more about trusting individuals to do the right thing and for them to drive the plans through. It’s about getting knowledgeable and experienced associates working together in teams and collaborating to the maximum extent. It’s about spending a significant amount of time fostering the right environment and then managing ambiguities and competing objectives.”
Yao adds: “Leadership includes creating an environment of both challenge and support. Successful Gore leaders help maximise team success, and importantly share the credit and celebrate success with all involved. When this is done well, leaders build natural followership. When we see this, we know we have a really good leader.”
With the growth of Gore globally, production facilities, R&D and sales offices are increasingly in Asia-Pacific, including China, Japan, Korea, Australia, India, Hong Kong and Taiwan. As each country has its own distinct culture, one of the challenges associated with an expansion of this sort is trying to make sure the company culture is alive and works within the culture of the host country.
A question frequently asked in Asia-Pacific is how well the Gore culture is adopted by Chinese employees, and indeed, by Chinese business culture. “The good thing is that Gore’s key values are shared by people from most countries. Everyone wants to succeed. Everyone wants to be part of a successful business,” Welch says.
But what other steps does Gore take in China and the rest of the region to make sure the Gore culture sticks? Recruiting the right people is an obvious first step.
“Once hired, we surround the associates with role models,” Yao says. “These are generally longer-term associates from the region who can help these associates learn how to work in the Gore culture. We also have many associates that we call ‘culture champions’ – they are so passionate about the culture that they make an additional commitment to help other associates grow and learn the Gore culture.”
The company commits resources to various programmes to ensure that all associates “get” the culture and really live it. For example, in China, Gore runs a variety of different workshops of different lengths – such as culture immersion workshops, and even “culture months” in Shenzhen, Shanghai and Beijing. Associates work together, share experiences, talk about what works and what needs to be improved, and organise debates.
Gore has made a practice of ensuring it remains true to its heritage and culture. It continues to invest in growth, especially in Asia-Pacific. But successful growth will continue to rely on its ability to retain its culture, while being able to adapt it as necessary to changes in the global economy.
Cultural fit at centre of hiring policy
Gore prides itself on investing time and effort in the hiring process to find a good match for both skills and culture fit. The company is upfront about this on its website careers page, asking: “Is Gore a good fit for you?”
The process is transparent and aims to ensure the best outcome for all involved.
After an initial screening phone call, a candidate is typically interviewed using behavioural questions by about six associates– including leaders and human resources associates, as well as potential teammates and peers.
“We know that the Gore culture is not for everyone – not just in China, or the United States, or the UK, or wherever,” says Stevy Yao, Asia-Pacific regional leader. “So the first thing we do is try to recruit the right people.
“We are looking for people who we believe will adapt to the Gore culture and will be comfortable with some ambiguity and working in an environment that is less structured. We also seek those who are self-motivated and enjoy teamwork, and also have the confidence to challenge others in the company. We spend time and effort screening potential recruits to make sure that they are going to fit in.”
The first thing that happens when an associate is recruited is that a “sponsor” is selected for them. Sponsors are formally committed to the associate’s success and play an important part in their work life.
Not only are they the first point of contact for associates in getting settled in, but they give coaching on the culture and organisation. They also provide guidance on development and learning opportunities, give feedback, and ensure that the associate’s contributions are recognised in the compensation process – or contribution and compensation (C&C) process, as it is known at Gore.
The dual goals of Gore’s compensation practices are internal fairness and external competitiveness and it has developed the C&C review to ensure this.
Gore also runs a profit-share scheme and an associate stock-participation plan in which all associates become shareholders. Therefore, while everyone is motivated to ensure that the enterprise is successful, there is a tremendous cultural belief in fairness and recognising contributions that underpins the process.
“It is a rigorous process in which each associate is assessed by a wide group of peers and not just a few important stakeholders,” Yao says. “For instance, in a global team, such as human resources, each member of the team will have a say in the performance rating.”
Associate development is a key feature of the Gore culture. The belief in the individual translates into broad opportunities for professional growth.
“Associates are not constrained by one-size-fits-all career tracks and they select their own projects, rather than having them determined by someone else,” says Dave Welch, Asia-Pacific regional leader.
“In addition, Gore takes its freedom principle to mean that associates are expected to continually increase their skills and contribution. Associates are encouraged to pursue projects that they are passionate about and map out their own individual development paths.”
Current president and CEO Terri Kelly is a good example. She started at Gore 30 years ago as a process engineer directly after college, and grew into the role of product specialist. She next became the leader of a business, and then led her division, before moving into her current role.
Welch says a considerable amount of time is spent trying to find a development “sweet spot” for associates. He explains that by zeroing in on the intersection of an associate’s unique skills and talents, their personal passions and interests, and business needs, the result is a highly engaged and effective individual.