W. L. Gore & Associates, Inc. is a privately-held company which develops and manufactures fluoropolymer products. Its products provide innovative solutions throughout various industries such as healthcare, high-tech electronics, and high-performance fabrics (best known for its GORE-TEX® fabrics in outwear). Annual revenues are $2.5 Billion. The company has been thoroughly recognized as one of the world’s most innovative companies and tops many lists ranking top employers. Now let’s perform a critical analysis of the company based on the four quadrants of the Competing Values Framework.
The Blue (Compete) Quadrant at W.L. Gore is demonstrated in terms of its growth model. It is rooted in next generation product development and the continued purchase or sale of businesses based on future growth outlooks.
a. Leaders values and behaviors: The organization has a cross-functional oversight group which continually examines product investments internal and external to the organization. Chuck Carroll, Gore’s soft spoken President, describes the key features of how Gore does a value proposition analysis. “We go through an exercise called Real, Win, Worth. Is the opportunity real? Is there somebody out there that will buy this? Can we win? What do the economics look like? Can we make money doing this? Is it unique and valuable? Can we have a sustained advantage (such as a patent)?” In addition, leaders in the organization encourage associates to spend 10% of their work time “dabbling” with their own ideas of how the company can compete.
b. Organizational culture: Despite being privately-held, Gore prides itself on remaining performance-driven by fueling a competitive spirit within different business units. Detailed reporting data for performance metrics of each business unit are frequently published internally so that associates can see the performance of their particular unit versus other units. This transparency fuels a sense of pride and competition amongst Gore’s teams.
c. Outcomes: The patent war in many of Gore’s businesses can yield great returns if the patent is won, but also severe losses if a significant investment is made in research and the patent is not won. Gore has the reputation as the leader in innovation and product design; however, if the company is lacking a competitive advantage in a particular product or market, Gore has actively resorted to acquisitions. For example, in 2006 Gore acquired Neural Intervention Technologies to expand its capabilities in a growing healthcare industry. Gore always strives for the next strategic growth opportunity and usually finds that result, either in-house or external to the company.
The Yellow (Collaborate) Quadrant at W.L. Gore is demonstrated in terms of its flat, lattice organizational structure. There is no organizational hierarchy, no chain of command or predetermined lines of communication.
a. Leaders values and behaviors: Bill Gore, a former disgruntled DuPont engineer, who felt he didn’t have a legitimate voice in a formal command and control organization founded the company in the late 1950s. He wanted to create a business where workers closest to the value stream had as much voice as upper-level managers. When the company began there weren’t formal job titles, everyone was simply hired on as “associates.” This remains true to this day, with the addition of naturally emerging “leaders” and assigned “sponsors” who play the role of a mentor and assist in a person’s career development.
b. Organizational culture: Have you ever been assigned a project which you thoroughly disliked? This would never happen at Gore, as associates self-assign themselves to projects based on their interest or skill-set. This process may seem inefficient, but it is based on the idea that an associate will collaborate and innovate more effectively on a team in which they are passionate about. One deficiency that Gore may have in the yellow quadrant is the firm’s compensation structure. Associates rate the contributions of their co-workers to the performance of the overall team and pay is based heavily on the ratings provided by team associates. This is a progressive way of determining compensation, but we find it difficult to believe everyone feels “good” about this overall process. We see it potentially creating rifts amongst cliques and/or individuals in the organization
c. Outcomes: Since the company is privately-held, the leadership doesn’t have to report to or answer to a collection of external stakeholders. Therefore, the company claims to have a more long term business outlook, more investment in its workers, and a very collaborative, consensus-driven strategy for product development. The amount of collaboration amongst Gore’s scientists and engineers is unparalleled.
The Green (Create) Quadrant has been a pillar of the organization since the creation of expanded polytetrafluoroethylene (ePTFE). W.L. Gore encourages bold, innovative ideas from its associates to maintain its role as a leader in fluoropolymer products.
a. Leaders values and behaviors: Gore was determined to take polytetrafluoroethylene (PTFE) and make the material go farther. After several attempts of carefully heating and slowly stretching the material, Gore gave one brave “yank” that stretched the material 1,000 times its original size. This created a new material, expanded PTFE (ePTFE), with new properties. With the newly discovered ePTFE, Gore encouraged feedback from each associate as to how they should use and market the innovative material. Gore used a metal file box in which he encouraged all associates to drop note cards with ideas for the use of the newly created ePTFE. As a result, ePTFE would become known as breathable Gore-Tex. It began as simple, waterproof material used in raincoats, but due to the constant feedback and creative suggestions of the associates, the Gore-Tex material has been seen in tents, hiking shoes, and even outdoor products used by our Marines.
b. Organizational culture: Some people refer to the company as a place “where nerds can become mavericks.” For others, the lack of structure and chain of command may be off-putting. HR leader Donna Frey says that Gore continues to recruit the same people it always has: intelligent, creative folks who require little structure in their daily activities. Gore associates are functional team members that know how to lead and also know when to follow. Gore places a fundamental belief in its people and their ability to take risks necessary to develop new, innovative products.
c. Outcomes: Encouraging creative risk taking and hands-on innovation from all associates helps establish leaders within the organization. Every associate can earn the credibility to define and drive projects. Those who continuously prove themselves as innovative thinkers and creators will be given more projects to lead. Also, since their pay is heavily based on co-workers ratings, those who contribute innovative ideas and create new products will be rated highly and thus paid more favorably.
The Red (Control) Quadrant at W.L. Gore is not easily identifiable, but upon further analysis we found evidence of “red” tendencies. As mentioned, W.L. Gore is a team-based, flat organization. Due to the lack of hierarchy, it may appear that W.L. Gore could improve this quadrant of the competing values framework. However, the control quadrant is demonstrated by Bill Gore’s four basic guiding principles as well as Gore’s compliance with REACH (Registration, Evaluation and Authorization of Chemicals).
a. Leaders Values and Behaviors: Four basic guiding principles for associates:
-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
Having these four guiding principles for W.L. Gore associates reminds employees that while they have the freedom to think creatively and work on teams, there are still fundamental rules they must follow.
The goal of REACH is to “ensure a high level or protection of human health and the environment while enhancing competitiveness and innovation.” By supporting this goal, W.L. Gore has shown its commitment to producing safe, quality products. REACH gives W.L. Gore metrics to determine what they need to do to ensure their products comply with the legislation and are environmentally friendly.
b. Organizational culture: The flat structure allows for optimal collaboration and innovative thinking. The guiding principles keep the associates aware that while they have freedom, there are still rules within the organization. However, there are problems that can occur with a lack of hierarchy. As mentioned in the yellow quadrant, employees may feel as though their pay is not an accurate reflection of their work. This is the result of having a weak red quadrant. However, this is the type of culture W.L. Gore has chosen to maintain based on the goals set forth by its leaders.
c. Outcomes: The bottom line is that W.L. Gore strives to preserve a culture that fosters teamwork, innovation and creative thinking through a unique organizational structure. In doing this, it demonstrates the “control” quadrant by promoting the four guiding principles and complying with REACH. The result has been a history of innovative employees who develop and find multiple uses for state-of-the-art products that comply with human health and environmental legislation. Gore has continued to go above and beyond health and safety standards by having a workforce that takes ownership of its safety culture and is actively compliant with the principles of REACH.
This post is by Joe Cawood and Ben Jerome, sorry we forgot that in the title. Hope you guys can learn something about a neat company and help create a substantive dialogue around its Competing Values tendencies.
ReplyDeleteTheir compensation model blew my mind. When I first read that, I imagined that they must have to deal with quite a few issues when it comes to rating time. How can they insure that personal relationships don't interfere with objective and fair ratings within teams? At the same time, it must work for them if they've kept it around. I also think its very yellow of them to allow associates to choose which projects they want to work on. However, I would imagine that there are also "undesirable" projects, so I wonder how that is dealt with if no employee wants to own it. Overall, it sounds like they have some really innovative practices which are clearly working for them because they create some awesome products.
ReplyDeleteDo they have any sort of metrics that help them evaluate products? You mentioned that they give each other comments on different products, but how do they determine if those products are successful enough to go to market? Do they have financial metrics that show them when a product is successful? It seems like they need to work a bit more on their red qualities...
ReplyDeleteW.L. Gore & Associates is a very interesting company. I did not know that W.L Gore spent 16 years with the DuPont Company in a number of positions that included fluoropolymer research until he decided to form his own company. I was amazed that the company has been voted as "one of the best places to work for" in numerous publications in various locations, including the U.S., Germany, France, Italy, etc.
ReplyDeleteI agree with Julie that the company needs to improve their red qualities. While the company is innovative, it appears that they could expend some additional energy in improving efficiencies in their manufacturing operations. While innovation and technology will get them to the market, lean manufacturing will allow them to be competitive.
Enjoying reading the comments -- keep them up!
ReplyDeleteAllison-The compensation structure is wild, huh? I think Dr. Moore would want to know where the internal and external equity and fairness has gone.
ReplyDeleteJulie and Adam-The 'red' qualities in Gore were definitely the most difficult to extract. It seems that organizational scholars and the company itself is so enamored with the green and yellow aspects of the business, that there is little written on the company's metrics and concrete processes. However, another detail which we failed to mention that may be of interest to you:
As Gore has gained success, manufacturing sites have begun to expand beyond Bill Gore's original mandate of having 250 or less employees per location. He felt that smaller work groups allowed employee a direct line of sight between their work and the success of the unit. As the scale of the business increases, along with the number of employees per location, it will be interesting to see if more red indicators emerge to help manage more sizable work groups.
I'd be interested to know how their competitive nature works in employee collaboration initiatives. I agree that healthy competition is good and that displaying the product lines data gives teams a source of pride, but is it a source of non-collaboration on new products or ways for product lines to interact? I'm curious if they have specific measures for collaboration efforts as well.
ReplyDeleteWell, it seems to me has we continue to talk about more companies we are seeing a trend. That is that the more freedom employees are allowed the more productive and happy they are. Not only do we see great innovations from the employees that are allowed to create their own projects but we also see loyalty to their company. I understand that it will cost more money to allow this freedom but I always think of it has spending money to make money. One successful idea may take 5 hours of thinking but produce billions long term. Even if hundreds of hours of labor are spent on thinking it still can be quickly recouped if one idea is brought to the table.
ReplyDeleteAll I’m thinking is that it seems businesses need to remove their “red” layering and start allowing employees more freedoms. If businesses thought happy employees lead to happy customers which leads to higher profits I believe we would see more W.L. Gore companies.
I think it is interesting that there is such a lack of hierarchical structure and chain of command. I think that this tends to work well in organizations that are relatively small. Is this sustainable when the organization grows? I doubt it. It will be hard to run the organization effectively and efficiently when there are no lines of communication. I will be curious to see how their structure as well as their 'yellow' aspects change in the future.
ReplyDeleteMatt- Please tell me you're not serious?!?! I agree with the adage that happy employees are productive employees, but that doesn't equate into no measurements. Let's put it this way: If you let your employees do what they want on the production line, but have no metrics to judge them by, how do you know they are more productive?
ReplyDeleteSecond, it's one thing to say a company has to "spend money to make money," but try telling that to your bosses and see how well it works. Most of the time, you have to have projections and metrics and all sorts of things to show how you will make money. Those are blue and red qualities.
I think that this company is very yellow as it essentially determines what you do and how you are compensated for it. Initially "I thought the pick your own project structure" would lead to cliques or people would try projects they were interested in but not qualified for.
ReplyDeleteBecause of its yellow processes I feel like group-think could be a huge problem, especially since there is no red to keep it in check. You wouldn't really want to go against the grain if your pay was dependent on you getting along with your group to get the project complete. I feel like it creates a very slippery surface, but it seems Gore has managed it well.
What an interesting company on all levels! While the idea of no hierarchy or formal communication channels is interesting & forward thinking (and probably fun for employees), I think it's also dangerous. Structures are put in place so everything doesn't result in chaos. I like that everyone can communicate with everyone, but it's not always the most efficient method either. As Jackie said, it gets more challenging as the group gets larger.
ReplyDeleteBen & Joe: do you have any figures for how much the company has grown in terms of employees? These practices must have evolved with the company if it continues to be successful.
I suspect that there may be more red tendencies than the company releases for public knowledge. All the reasons mentioned above make it necessary (especially in the compensation system). It doesn't seem plausible that WL Gore could be so successful without the red processes in place. Perhaps those aren't things that are available for public consumption though since they've built their reputation on horizontal structure, open communication, & innovative employee programs?
Very intriguing organizational culture. With this informal structure, do you think W.L. Gore will be able to remain profitable moving forward? You also mentioned that HR recruits intelligent, creative people who like little structure to their daily activities; does W.L. Gore's flat structure assist in attracting top talent, or does it attract individuals who are more fit for the company?
ReplyDeleteI find it interesting that "associates self-assign themselves to projects based on their interest or skill-set". I feel like this could be extremely beneficial in terms of employee engagement and productivity, however, I am curious as to what happens if too many people self-assign themselves to the more appealing projects while other projects are neglected. But perhaps Google is so large, they haven't had to deal with this issue.
ReplyDeleteI think W.L. Gore seems like a very interesting company. One thing that may become an issue if the company continues to grow however is the lack of a well defined "red" aspect in the company's management structure. Very similar to Google in my presentation, this is a company that allows the employees to self sort into projects of their own interest. Google eventually learned that this free for all approach was actually hurting the creative process by not allocating enough resources to the right projects. I think this company may eventually come to the same conclusion. Some level of structure is necessary.
ReplyDeleteI liked the quote from the president about the "real, win, worth" strategy. It isn't anything radical, but it is something that would be easily understood at all levels of the company and makes it clear to employees what the goals/values of the organization are.
ReplyDelete