Describe how W.L. Gore operates in terms of management, leadership, organizational structure, and organizational design.

Management practices at W. L. Gore & Associates give a new dimension to employee empowerment. Other organizations can learn from the experience.

Employee Self-Management Without Formally Designated Teams:

An Alternative Road to Empowerment

FRANK SHIPPER CHARLES C. MANZ

To make money and have fun. -W. L. Gore

Words like "self-management" and em-ployee "empowerment" are quickly be- coming the contemporary battle cry of Amer- ican industry. The emphasis has shifted from a focus on management control of employees to a decentralization of power and the provi- sion of opportunity for workers, at all levels, to exercise increasing influence over themselves.

The idea behind employee self-manage- ment, as the term implies, is for workers to become, to a large degree, their own man- agers. In attempting to use their human re- sources more fully, many organizations have moved beyond the mentality that managers make dedsions and employees are simply ex- pected to do what t h e / r e told. Self-manage- ment involves an increasing reliance on work- ers' creative and intellectual capabilities, not just their physical labor.

Although questions may linger about how to put this once-radical idea into prac- tice, self-management is clearly becoming a

48 respected competitive advantage. In many

companies, organizing work around small groups of workers empowered to perform many traditional management functions (as- signing tasks, solving quality problems, and selecting, training, and counseling fellow team members) has become a way of life. Ap- plications of the team approach have spanned industries and taken root in a variety of man- ufacturing and service organizations. These include some of the best-known companies in the world—Procter and Gamble, General Motors, Ford, Digital Equipment, IDS, Hon- eywell, Cummins Engine, Tektronix, General Electric, Caterpillar, Boeing, and LTV Steel, to name just a few. Reports from the field cred- it this work design innovation with many positive benefits, including higher productiv- ity, better attendance, less turnover, and im- provements in both product quality and the quality of working life for employees.

In many ways, empowered worker teams seem to be emerging as the major new Amer- ican industrial weapon to fend off interna- tional competitive threats from such countries as Japan. The team approach has become highly visible: Conferences center on the con-

cept, consultants specialize in applying it, and well-known business publications (Business Week and Fortune, among others) make it cov- er-story news. In fact, it has become visible to the point that companies may begin to con- clude that this is the only way to successfully meet the business pressures in the 1990s and on into the 21st Century, especially when those pressures demand fuller involvement and utilization of human resources.

Almost always, employee self-manage- ment is introduced in organizations through the establishment of formally designated em- powered work teams. When employees are hired, they are assigned to a work team as a condition of their emplo3/̂ ment.

In this article v/e vnR suggest an alterna- tive: An approach that promises to deliver many of the advantages and benefits of for- mally established empowered employee work teams—^but v/ithout formally designat- ed teams. Instead, the whole work operation becomes essentially one large empowered team in which everyone is individually self- managing and can interact directly with ev- eryone else in the system. To illustrate this al- ternative, we will describe W. L. Gore & Associates, a company that relies on self-de- veloping teams without managers or bosses— but with lots of leaders.

HISTORICAL BACKGROUND

W. L. Gore & Associates is a company that evolved—^personally, organization,ally, and technically—from the late Wilbert L. Gore's experiences. He was born in Meridian, Idaho (near Boise) in 1912. By age six, he had become an avid hiker. He received a bachelor of sci- ences degree in chemical engineering in 1933 and a master of sden<£s in physical chemistry in 1935, both from tlie University of Utah. Af- ter working for two other companies, he joined E. I. DiaPont de Nemours in 1945, where he held several positions, induding re- search supervisor and head of operations re- search. While at DuPont he worked on a team to develop applications for polytetrafluo- roethylene, frequently referred to as PTFE in

the scientific community and known as "Teflon" by consumers. On this team, Wilbert Gore (called Bill by everyone) felt a sense of ex- cited commitment, personal fulfillment, and self-direction. He was knowledgeable abdut the development of computers and transistors and felt that PTFE had insulating characteris- tics ideal for use with such equipment.

He tried a number of ways to make a PTFE-coated ribbon cable without success. A breakthrough came in his home basement lab- oratory. He was explaining the problem to Ms son. Bob. Bob had seen some PTFE sealant tape made by 3M and asked, "Why don't you try this tape?" The senior Gore explained that everyone knows you can't bond PTFE to itself.

Bob went on to bed, but his father lin- gered in the basement lab, willing to try "what everyone knew would not work." At about 4 a.m., he walked into his son's room waving a small piece of cable. "It works, it works!" he shouted. The following night fa- ther and son returned to the basement lab to make ribbon cable coated with PTFE.

For the next four months Bill Gore tried to persuade DuPont to make a new produdl— PTFE-coated ribbon cable. By this time in Ms career. Bill Gore knew some of the decision makers at DuPont. After some preliminary dis- cussions, it became dear that DuPont wanted to remain a supplier of raw materials and not a fabricator. Consequently, Bill began to dis- cuss with his wife, Genevieve, known as "Vieve," the possibility of starting their own insulated-wire and cable business. On January 1,1958, their twenty-third wedding annivBr- sary, they founded W. L. Gore & Assodales. The basement of their home served-as the ficst facility. After finishing their anniversary dih- ner, Vieve turned to her husband of twerjty- three years and said, "Well, lef s clear up tlie dishes, go downstairs, and get to work."

Bill Gore was forty-five years old with five children to support when he left DuPont. He left behind a career of seventeen years, a good salary, and a secure position. To Bnariee the first two years of the business. Bill ajnd Vieve mortgaged their house and took $4,ij)00 from savings. AU of their friends told theim not to do i t 49

Frank Shipper is a professor of manage- ment at the Franklin P. Perdue School of Business at Salisbury State University. He received his B.S. from West Virginia Uni- versity and his M.B.A. and Ph.D. from the University of Utah. Before returning to school to pursue his graduate degrees, he worked in biomechanical and structural engineering. Since receiving his Ph.D., his consulting, teaching, and research inter- ests have focused on leadership effective- ness, work teams, and strategic responses to legal and political issues. He received a Federal Faculty Fellowship for work on organizational effectiveness.

Shipper has written three books and numerous articles. His most recent books are Task Cycle Management: A Compe- tency-Based Course for Operating Man- agers (plark Wilson Publishing Company, 1990) and Avoiding and Surviving Law- suits: The Executive Guide to Strategic Legal Planning (Jossey-Bass, 1989).

50

The first few years were rough. In lieu of salary, some of the employees accepted room and board in the Gore home. At one point eleven employees were living and working under one roof. A few years later, the Gores secured an order for $100,000 that put the company over the hump.

W. L. Gore & Assodates has continued to grow and develop new products derived pri- marily from PTFE, induding its best-known product, GORE-TEX®. Today W. L. Gore makes a wide range of products in four cate- gories—electronic, medical, fabrics, and in- dustrial products. In 1986, Bill Gore died while backpacking in the Wind River Moun- tains of Wyoming. Before he died he had be- come chairman, and his son. Bob, president, a position the latter continues to occupy. Vieve remains as the only other officer, secretary- treasurer.

As in many organizations, the early ex- periences of the founder continue to mold the corporate operations and culture. As wiU be illustrated a number of times, the informal, non-bureaucratic, low-overhead style that characterized the company at its founding has stuck^even though the firm now has over 5,000 employees and is rapidly ap- proaching $1 biUion in sales.

ORGANIZATION WITHOUT BOSSES: EMPLOYEE EMPOWERMENT BASED ON SELF-INITIATED TEAMWORK

W. L. Gore & Associates is a company with- out titles, hierarchy, or any of the conven- tional structures associated with enterprises of its size. The titles of president and secre- tary-treasurer are used only because they are required by the laws of incorporation. The Gore management style has been referred to as "un-management/' an approach to man- aging that has its roots in Bill's experiences on teams at DuPont and that evolved over time to adapt to current needs.

For example, in 1965 W. L. Gore & Asso- ciates was a thriving and growing 200-em- ployee company with a facility on Paper Mill Road in Newark, Delaware. One warm Mon-

day morning in the summer. Bill Gore was taking his usual walk through the plant, when he suddenly realized he did not know everyone. The team had become too big. As a result, the company developed a policy that no facility could have more than 150 to 200 employees, thus giving birth to a distinctive expansion strategy: "Get big by staying small." The purpose of maintaining small plants is to accentuate a close-knit and inter- personal atmosphere.

Today, W. L. Gore & Associates consists of 44 plants worldwide with over 5,300 as- sociates (the term used instead of "employ- ees," and alwajî s spelled with a capital A in company literature). In some cases the plants are clustered together on the same site, as in Flagstaff, Arizona, where the com- pany operates four plants on the same site. Twenty-seven of those plants are in the United States and seventeen are overseas (locations include Scotland, Germany, France, and Japan).

Compensation at W. L. Gore & Associates takes three foriris—salary, profit sharing, and an Associates' Stock Ownership Program, or ASOF (legally similar to an employee stock ownership plan, or ESOF). Entry-level salaries are tn the middle ranges for comparable jobs in the industry. According to Sally Gore, daughter-in-law of the founder, "We do not feel we need to be the highest paid. We nev- er try to steal people away from other com- panies with salary. We want them to come here because of the opportunities for gro îvth and the unique work environment." Associ- ates' salaries are reviewed at least once a year and more commonly, twice a year. For most workers, the reviews are conducted by a compensation team drawn from individuals at the employee's work site. All associates have sponsors who act as their advocates dur- ing this review process. FWor to meeting v/ith the compensation committee, the sponsor checks with customers (or whoever uses the results of the person's work) to find out what contribution has been made. In addition, the evaluation team will consider the associate's leadership ability and willingness to help oth- ers develop to their fullest.

Charles C. Manz is an associate professor of management at Arizona State Universi- ty. He was awarded the prestigious Marvin Bower Feliowship at the Harvard Business Schooi in 1988-89 for "the outstanding quaiity and quantity of his pubiished work" in the area of self-managed work teams and empioyee self-ieadership. He is co-au- thor of SuperLeadership: Leading Others to Lead Themselves (Prentice-Hall, 1989), a book widely acclaimed by experts in the field. One review proclaimed that the book should be a "classic of the '90s." He and co-author Henry P. Sims, Jr. were recently described in an article in the Academy of Management Executive as "the leading writers in the area of self-management."

Manz has served as a consultant, ex- ecutive education leader, or researcher for many organizations. He has written arti- cles, as well as several books, on the top- ics of employee self-leadership, self-man- aged work teams, and the leadership of self-managed employees. Manz received B.A. and M.B.A. degrees from Michigan State University and a Ph.D. degree from Pennsylvania State University.

Charles Manz completed the majority of his writing for this article during his year as a Marvin Bower Fellow at Harvard Business School. The generous support he received is gratefully acknowledged.

W. L. Gore has profit-sharing and ASOF plans for all associates. FroHt sharing typi- cally occurs twice a year, but is dependent on profitability. The amount awarded to each associate is based on his or her time in service and annual rate of pay. In addition, the firm buys company stock equivalent to 15 percent of the associates' annual income and places it in an ASOF retirement fund. Bill wanted the associates to feel that they were owners, and after being with Gore for one year, each associate does indeed become a stockholder.

The principle of commitment is seen as a two-way street. W. L. Gore & Associates tries to avoid layoffs. Instead of cutting pay, seen as disastrous to morale, the company has used a system of temporary transfers within a plant or cluster of plants, as well as voluntary layoffs.

It should be clear that Gore is an unusu- al company by many standards. It has also been a highly successful and profitable com- pany. In fact, it has been profitable for 31 straight years. Sales jumped from $6 million in 1969 to $660 million in 1990, the growth fi- nanced entirely without debt.

Some of the primary features that charac- terize Gore wiU be summarized in the follow- ing pages as a series of organizational themes. We will draw from these themes to prescribe some possible lessons for organizations that want to enjoy some of the benefits that Gore has obtained. Those benefits apparently stem largely from the company's distinctive em- ployee-empowerment centered approach to managing (or "unmanaging") an organization.

THEME 1 Culture and Norms Supporting Employee Empowerment and Success

Bill Gore wanted to avoid smothering the company in thick layers of formal "manage- ment," feeling that such layers stifled indi- vidual creativity. As the company grew, he knew it had to find ways to assist new peo- ple in getting started, as well as ways to fol- low their progress—a particularly important

52 concern in compensation decisions. Thus,

the firm developed its "sponsor" program. When people apply to W. L. Gore, person- nel specialists conduct an initial screening, as in most companies. Those candidates who meet the basic criteria then interview with selected associates. Before anyone is hired, an associate must agree to be the new em- ployee's sponsor—no sponsor, no job. The sponsor is to take a personal interest in the new associate's contributions, problems, and goals, and to serve as both coach and advo- cate. The sponsor tracks the new associate's progress, providing help and encourage- ment, and coaching the new member to cor- rect weaknesses and concentrate on strengths. Sponsoring is not a short-terrn commitment. AU associates have sponsors and many have more than one. When an in- dividual is initially hired, the sponsor comes from that person's immediate work area. If he or she moves to another area, a new spon- sor will be appointed from that work area. As associates' responsibilities grow, they may acquire additional sponsors.

Because the sponsor program goes be- yond conventional views of what makes a good associate, some anomalies occur in the hiring practices. Bill Gore proudly told the story of "a very young man" of eighty-four who walked in, applied for a job, and spent five very good years with the company. The individual had thirty years of experience in the ind ustry before joining Gore. His other as- sociates had no problems accepting hirn, but the personnel computer did. It insisted that his age was 48. As in this example, the Gore system of "unmanagement" attracts individ- uals from diverse backgrounds and creates unique success stories.

An internal memo by Bill Gore described the three kinds of sponsorship he expected, and how each might work in practice:.

1. The sponsor who helps a new Associate get started on his job. Also, the sponsor who helps a present Asso- ciate get startled on a new job (starting sponsor).

2. The sponsor who sees to it that the Associate being sponsored ̂ efe ered-

it and recognition for contributions and accomplishments (advocate sponsor).

3. The sponsor who sees to it that the Associate being sponsored is fairly paid for contributions to the success of the enterprise (compensation sponsor).

A single sponsor can perfomti any one or aU three lidnds of sponsorsliip. A sponsor is a friend and an Associate. All the supportive aspects of the friendship are also present. Often (per- haps usually) two Associates sponsor each other as advocates.

In addition to the sponsor program. Gore asks its associates to follow four guiding princi- ples:

1. Try to be fair. 2. Use your freedom to grow. 3. Make your own commitments,

and keep them. 4. Consult with other Associates

prior to any action that may adversely affect the reputation or financial sta- bility of the company.

The four principles are often referred to as Fairness, Freedom, Commitment, and Wa- terline. The waterline terminology is drawn from a ship analog]?. If someone pokes a hole in a boat above the waterline, the boat will be in rela^vely little real danger. If someone, however, pokes a hole below the waterline, the boat is in immediate danger of sinking. In other words, associates can (and are en- couraged to) make dedsions on theilr own as long as the downside risk does not threaten the orgariization's survival.

The operating principles were put to a test in 197 .̂ By this lime, word about the qual- ities of GQRE-TEX fabric were being spread throughout the recreational and outdoor mar- kets, and shipments began in volume. Then it happened. At first, a few complaints and oc- casidnal returns. FinaEy, large amounts of the clothing were being returned. GORE-TEX was leakirig. Having high-quality waterproof pro4ucts was one of the two major charac- teristics responsible for GORB-TEX's success, and the compan3^s reputation and a-edibUity were on the Mne.

Feter W. Gilson, who led Gore's fabric di- vision, said of the situation, "It was an in- credible crisis for us at that point. We were re- ally starting to attract attention, we were taking off—and then this." In the next few months, Feter and his associates made a num- ber of those "below the waterline" decisions.

First, the researchers determined that cer- tain oils in human sweat were responsible for dogging the pores in GORE-TEX fabric and altering the surface tension of the membrane. Thus, water could pass through. They also discovered that a good washing could restore the waterproof property. At first, this solu- tion, known as the "Ivory Snow Solution," was accepted.

A single letter from "Butch," a mountadn guide in the Sierras, changed the company's position. Butch wrote that he had been lead- ing a group and "my parka leaked and my life was in danger." As Gilson says, "That scared the hell out of us. Clearly our solution was no solution at all to someone on a mountain top." All of the products were recalled. As Gilson says, "We bought back, at our own ex- pense, a fortune in pipeline material. Any- thing that was in stores, at the manufactur- ers, or an5rwhere else in the pipeline."

In the meantime. Bob Gore and other asso- dates set out to develop a permanent fix. O'ne month later, a second generation GORE-TEX fabric had been developed. Gilson, furthermore, told dealers that if at any time a customer Be- tumed a leaky parka, they should replace it and bill the company. The replacement progiram alone cost Gore roughly $4 million.

THEME 2 The Lattice Organization Structure: The Keystone to the Team Approach VMthout Formally Designated Teams

W. L. Gore & Assodates has been described as not only unmanaged, but also as unstruc- tured. Bill Gore referred to the structure as a lattice orgaruzation. (See Exhibit 1.) The p:d- mary characteristics of this structure aret

1. Lines of communication are direct — person to person—^with no intermediary.

2. There is no fixed or assigned authorift}?. 53

EXHIBIT 1 THE LATTICE STRUCTURE

\

Associate

54

3. There are sponsors, not bosses. 4. Natural leadership is defined by

foUowership. 5. Objectives are set by those who must

"make them happen." 6. Tasks and functions are organized

through commitments. The structure within the lattice is complex

and evolves from interpersonal interactions, self-commitment to responsibilities known within the group, natural leadership, and group-imposed discipline.

Bill Gore once explained this structure by saying, "Every successful organization has an underground lattice. If s where the news spreads like lightning, where people can go around the organization to get things done." Another phenomenon within the lattice is the constant formation of temporary cross-area groups. In other words. Gore has "teams without formally designated teams." The cross-level and cross-functional interpersonal accessibility created by this structure enables all kinds of teams to self-develop, as spedfic needs arise. Assodates can team up vdth oth- er associates, regardless of area, to get the job

done. When a puzzled interviewer told Bill that he was having trouble understanding how planning and accountability worked. Bill replied with a grin, "So am 1. You ask me how it works. [The answer is, it works] every which way."

The lattice structure does have some sim- ilarities to traditional management structures. For instance, the thirty to forty assodates who make up an advisory group meet every six months to review marketing, sales, and pro- duction plans. As Bill Gore has conceded, "The abdication of titles and rankings can never be 100 percent."

One thing that strikes an outsider is the informality and pervasive sense of humor. Words such as "responsibilities" and "com- mitments" are, however, frequently used in meetings. This is an organization in which members take what they do seriously, but not themselves.

For a company of its size. Gore may have the shortest organizational pyramid found anywhere. The pj^amid consists of Bob Gore, the late Bill Gore's son, as president, Vieve, BiU Gore's widow, as secretary-treasurer, and

aU others— t̂he associates. (Words such as em- ployees, subordinates, and managers are tabod in the Gore culture.)

THEME 3 No Bosses or Managers, Lots of Leaders

One pf Bill Gore's internal memos described the kinds of leaders that would be needed and t|he roles they were to play. (Note how he frequently used the term "team," yet his organization then and now is based on the lattice structure, not formally designated teams—again, the team approach, but with self-developing rather than formalized teams.)

1. The Associate who is recognized by a team as having a special knowl- edge, or experience (for example, this could be a chemist, computer expert, niachine operator, salesman, engineer, lawyer). This kind of leader gives the team guidance in a special area.

2. The Associate the team looks to for coordineition of individual activities in order to achieve the agreed-upon objectives of the team. The role of this leader is to persuade team members to niake the commitments necessary for suc- cess (commitment seeker).

3. The Associate who proposes necessary objectives and activities and s^eks agreement and team consensus on objectives. This leader is perceived by the team members as having a good grasp of how the objectives of the team fit in with the broad objective of the enterprise, 'fhis kind of leader is often also the "commitment seeking" leader in 2 above.

4. The leader who evaluates the relative contributions of team members (i:̂ consultation with other sponsors), and reports these contribution evalua- tions to a compensation committee. This leader may also participate in the ccjmpensation committee on. relative ccintribution and pay and reports changes in compensation to individual

Associates. This leader is then also a compensation sponsor.

5. The leader who coordinates the research, manufacturing and market- ing of one product type within a busi- ness, interacting with team leaders and individual Associates who have com- mitments regarding the product b/pe. These leaders are usually called prodtict specialists. They are respected for their knowledge and dedication to their products.

6. Plant leaders who help coordi- nate activities of people within a plaifit.

7. Business leaders who help C(30r- dinate activities of people in a business.

8. Functional leaders who help coor- dinate activities of people in a "furtc- tional" area.

9. Corporate leaders who help coor- dinate activities of jDeople in different businesses and functions and who try to promote communication and coop- eration among aU Associates.

10. Intrapremiiring Associates wko organize new teams for new businesses, new products, new processes, new! de- vices, new marketing efforts, new Or better methods of all kinds. These lead- ers invite other Associates to "sign uip" for their project.

It is clear that leadership is widespread in our lattice organization and that it is continually changing j^ ttd evolving. The reality that leaders late frequently also sponsors should ^ibt confuse the fact that these are dififer- ent activities and responsibilities. Lefad- ers are not authoritarians, manager^ of people, or supervisors who tell us wjhat to do or forbid us from doing thir^gs; nor are they "parents" to whom |we transfer our own self-responsibil|[ty. However, they do often advise u^ of the consequences of actions we h^ve done or propose to do. Our actions! r6- sult in contributions, or lack of conjtEi- butions, to the success of our enileir- prise. Our pay depends on \}\& magnitude of our contributions. TJhis is the basic disdpline of our lattice oiiga- nization. 55

Many other aspects of organizational life are arranged along similar lines. The parking lot does not have any reserved parking spaces except for customers and the handicapped. There is only one area in each plant in which to eat. The lunchroom in each new plant is designed to be a focal point for employee in- teraction. As Dave McCarter of Fhoenix ex- plains, "The design is no acddent. The lunch- room in Flagstaff has a fireplace in the middle. We want people to like to be here." The lo- cation of the plant is also no accident. Sites are selected based on transportation access, a nearby university, the natural beauty of the surroundings, and appeal of the climate. Land cost is never a primary consideration.

McCarter justifies the selection criteria by stating, "Expanding is not costly in the long run. The loss of money is what you make happen by st5rmieing people into a box."

In many ways the leadership approach used at Gore might be compared with the re- cently coined concept "SuperLeadership"— Leading Others to Lead Themselves (a book by C. C. Manz and H. P. Sims, Frentice-Hall, 1989, Berkley, 1990). The focus is on empowering and enabling others to perform on their own, and to the best of their ability. In a sense the only real bosses for Gore employees are them- selves.

THEME 4 Successful Associates Can Work Without Structure and Management

Not all people function well under such a sys- tem, espedally initially. For those accustomed to a more structured work environment, there are adjustment problems. As Bill Gore said, "All our lives most of us have been told what to do, and some people don't know how to respond when asked to do something—and have the very real option of saying no—on their job. It's the new assodate's responsibili- ty to find out what he or she can do for the good of the operation." The vast majority of the new assodates, after some initial floun- dering, adapt quickly.

For those who require more, structured 56 working conditions. Gore's flexible work

place is not for them. According to Bill, for those few, "It's an unhappy situation, both for the associate and the sponsor. If there is no contribution, there is no paycheck."

Ron Hill, an associate in Newark, has pointed out that the company "will work with associates who want to advance them- selves." Associates are offered many in- house training opportunities. These tend to be technical and engineering focused, be- cause of the type of organization Gore is, but the training also includes in-house programs in leadership development. In addition, the company has cooperative programs through universities and other outside providers. Gore will pick up most of the costs for the associates. As in many aspects of the Gore culture, the emphasis here is that the asso- ciate must take the initiative.

As Anita McBride, an associate in Fhoenix, says, "It's not for everybody. Feo- ple ask me, do we have turnover, and yes we do have turnover. What you're seeing looks like Utopia, but it also looks extreme. If you finally figure out the system, it can be real exciting. If you can't handle it, you got- ta go. Frobably by your own choice, because you're going to be so frustrated."

In rare cases an associate 'tries to be un- fair," as Bill put it. Such "unfairness" might involve chronic absenteeism, for example, or an individual caught stealing. "When that happens, all hell breaks loose," said Bill Gore. "We can get damned authoritarian when we have to."

Over the years. Gore & Associates have faced a number of unionization drives. The company neither tries to dissuade an asso- ciate from attending an organizational meet- ing nor retaliates when flyers are passed out. Bach attempt has been unsuccessful, and none of the plants have been organized to date. Bill believed that no need exists for third-party representation under the lattice structure. "Vv̂ hy would associates join a union when fhey own the company?" he asked. "It seems rather absurd."

It should be obvious that life as a Gore as- sodate can be unique and challenging. Con- sider ihe following example. On July 26,1976,

Jack Dougherty, a newly minted MBA from the College of William and Mary, became an associate- Bursting with resolve and dressed in a dark blue suit, he presented himself to Bill Gore, shook hands firmly, looked him in the eye, and said he was ready for anything.

What happened next was the one thing for which Jack was not ready. "That's fine. Jack, fine," Gore replied. "Why don't you look around and find something you'd Hke to do." Three frustrating weeks later. Jack found that something. Now dressed in jeans, he loaded fabric into the maw of a ma- chine th^t laminat(es GORE-TEX membrane to other fabrics. It was Jack's way of learn- ing the business. And by 1982, he had be- come responsible for all advertising and marketing in the fabrics group.

This story is part of the folklore that is heard over and over about Gore. Today the process is slightly more structured. New as- sociates take a Journey through the business before settKng into their own positions, re- gardless of the specific position for which they are hired. A new sales associate in the fabric division may spend six weeks rotating through different areas before begiinning to concentrate on sales and marketing. Among other things he may leam is how GORE-TEX fabric is made, what it can and can not do, how Gore handles custoEcier compkiints, and how it makes its investment decisions.

Anita McBride related her early experi- ence at W. L. Gore this way:

Before I came to Gore I had worked for a structured organization . . . I came here, and for the first month it was fairly structured because I was going through ti-aining... "this is what we do and this is how Gore is" and all of that, and I went to Flagstaff for that training. After a month I came down to Phoenix and my sponsor said, "WeU> here's your office"— ît's a won- derful office—and "Here's your desk" and walked away. And I thought now what do I do, you know? I was waiting for a memo or something, or a job de- scription. FinaUy after another month I was so frustrated, I felt what have I got-

ten myself intol I went to my sponsor and I said "What the heck do you want from me? I need something from you," and he said, "If you don't know what you're supposed to do, examine your commitments and opportunities."

As a postscript to the story, Anita did fiind something worthwhile to do— ŝhe now herids up the personnel function in Phoenix and seems to love her company.

THEME 5 Unstructured Research and Developniekiit for Increased Creativity and Innovation

Research and development, like everything else at Gore, is unstructured. There is no fpr- mal R&D department, yet the company hblds numerous patents. Most inventions are held as proprietary or trade secrets. Any associate can ask for a piece of raw PTFE (known iai$ a "silly worm") with which to experiment. Bill Gore believed that all people had it wiillin themselves to be creative^

The best way to understand hoW iie- search and development works is to see how inventiveness has previously occurreii at Gore. By 1969, the wire and cable division was facing increased competition. BiU Gqre began to look for a way to straighten out the PTFE molecules. As he said, "I figured out that if we ever unfold those molecules, get them to stretch out straight, we'd ha^e a tremendous new kind of material." lile thought that if PTFE could be stretched] liir could be introduced into its molecular stlritlc- ture. The result would be greater volume per pound of raw material without affecting pei- fotmance. Thus, fabricating costs woulq be reduced and the profit margins would be| in- creased. Bill and his son. Bob, heated rodjs pf PTFE to various temperatures and then slip#- ly stretched them. Regardless of the temper- ature or how carefully they stretched, itlfke rods broke.

Working alone late one night in 1969 al̂ ter countless failures. Bob in frustration yankijd at one of the rods violently. To his surpriste, it did not break. He tried it again and again with the same results. 57

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The next morning Bob dramatized the breakthrough to his father. As BiU Gore told the story, "Bob wanted to surprise me so he took a rod and stretched it slowly. Naturally, it broke. Then he pretended to get mad. He grabbed another rod and said, 'Oh the hell with this,' and gave it a puU. It didn't break— he'd done it." The new arrangement of molecules changed not only the wire and ca- ble division, but led to the development of GORE-TEX fabrics, now the largest division at Gore, plus a host of other products.

BiU and Vieve conducted initial field-test- ing of GORE-TEX fabric in the summer of 1970. Vieve made a hand-sewn tent out of patches of the material, and they took it on their annual camping trip to the Wind River Mountains in Wyoming. The very first night in the wilderness, they encountered a hail storm. The hail tore holes in the top of fhe tent, but the bottom fiUed up like a bathtub from the rain. As BiU Gore stated, "At least we knew from aU the water that the tent was wa- terproof. We just needed to make it stronger, so it could withstand hail."

The second largest division began on the ski slopes of Colorado. BiU was skiing with his friend. Dr. Ben Eiseman, of the Denver Gen- eral Hospital. As BiU Gore told the story, "We were just about to start a run when I absent- mindedly pulled a small tubular section of GORE-TEX out of my pocket and looked at it. 'What is that stuff?' Ben asked. So I told him about its properdes. 'Feels great,' he said, 'What do you use it for?' 'Got no idea,' I said. 'Well give it to me,' he said, 'and I'll try it in a vascular g::aft on a pig.' Two weeks later, he caUed me up. Ben was pretty^ excited, 'Bill,' he said 'I put it in a pig and it works. What do I do now?' I told him to get together with Pete Cooper in our Flagstaff plant, and let them figure it out." Now hundreds of thousands of people throughout the world walk around with GORE-TEX vascular grafts.

Every associate is encouraged to think, experiment, and follow a potentially prof- itable idea to its conclusion. For example, at a plant in Newark, Delaware, a machine that wraps thousands of yards of wire a day was designed by Fred L. Eldreth, an associate with

a formal education that stopped with the third grade. The design was done over a weekend. Many other associates have con- tributed their ideas for both product and pro- cess breakthroughs.

Without an R&D department, innova- tions and creativity work very well at Gore & Associates. The year before he died, BiU Gore claimed that "The creativity, the number of patent applications and innovative products is triple [that of DuPont]." Overall, the asso- ciates appear to have responded positively to the Gore system of unmanagement and un- structure. Bill Gore estimated the year before he died that, "The profit per associate is dou- ble" that of DuPont.

THEME 6 Use Witti Caution: The Lattice Structure and "Unmanagement" Approach Have Limitations

While the lattice and unstructured manage- ment appear to be a remarkable and promis- ing innovation, it should be considered with some caution. Just as with any other new management approach, it should be evaluat- ed in terms of its fit with an organization's culture and objectives. BiU Gore defended the approach, but with sensitivity to its alleged limitations. "I'm told from time to time," he once said, "that a lattice organization can't meet a crisis well because it takes too long to reach a consensus when there are no bosses. But this isn't true. Actually, a lattice, by' its very nature, works particularly weU in a aisis. A lot of useless effort is avoided because there is no rigid management hierarchy to conquer before you can attack a problem."

The lattice has been put to the test on a number of occasions. For example^ in 1975 Dr. Charles Campbell, the University of Pitts- burgh's senior resident, reported that a GORE- TEX arterial graft had developed an anevuysm. (An aneurysm is a life-threatening, bubble-like protrusion. If it continues to expand, it will ex- plode.) Obviously, this kind of problem had to be solved quickly and permanently.

Within only a few days of Dr. Campbell's first report, he flew to Newark to present his

findings to Bill and Bob Gore and a few other associates. The meeting lasted two hours. Be- fore it was over, Dan Hubis, a former poKce- man who had joined Gore to develop new production methods, had an idea, and he re- turned td his work area to try some different production techniques. After three hours and twelve tries, he had developed a permanent solution. In other words, in only tkree hours a potentially damaging problem to both pa- tients and the company was resolved. Fur- thermore, Hubis's redesigned graft has gone on to win widespread acceptance in the med- ical community.

Other critics include outsiders who had problems with the idea of no titles. Sarah Clifton, an associate at the Flagstaff facility, was being pressed, by some outsiders as to what her title was. She made one up and had it printed on some business cards— SUPREME COMMANDER. When Bill Gore learned what she did, he loved it and re- counted ijlie story to others.

Another critic, Eric Reynolds, founder of Marmot Mountain Works Ltd. of Grand Junction, Colorado, and a major Gore cus- tomer, points to another limitation: "I think the lattici has its problems with the day-to- day nitty-gritty of getting things done on time and put the door. I don't think Bill real- izes how the lattice system affects customers. I mean after you've established a rektionship with someone about product quality, you can caU up one day and suddenly find ihat some- one new to you is handling your problem. It's frustrating to find a lack of continuity." He goes pn to say, "But I have to admit that I've persclnally seen at Gore remarkable ex- amples of people coming out of nowhere and excelling."

BMI Gpre was asked a number of times if the lattice structure could be used by other companies. His answer was no. "For exam- ple," he explained, "established companies would find it very difficult to use the lattice. Too many hierarchies would be destroyed. When you remove titles and positions and allow people to follow whom they want, it may very well be someone other than the person who has been in charge. The lattice

works for us, but it's always evolving. \ ou have to expect problems." He maintained that the lattice system works best when put in place by a dynamic entrepreneur in a start-up company.

CONCLUSIONS

Organizations that are considering the intro- duction of employee empowerment and sdlf- management could benefit from several lessons stemming from the story told in tMs article. Some of these lessons are summanefed below.

1. The role of management and leader- ship needs to be redefined. A leadership per- spective that recognizes the role of self-man- agement and self-leadership for each employee is at the heart of the empowerment approach. At Gore, associates talk about "un- management"—^with no bosses or managers, but with lots of leaders.

2. Organization and structure need to be redefined as well. A concrete chain of com- mand and definite hierarchy are not charac- teristics that describe Gore. Rather, Gore li^s only two designated officer positions (pijesi- dent and secretary-treasurer), and these dr% because of legal requirements. Everyone felse is an associate with no assigned title. At Gbre, they talk about "unstructure," not structitire. The lattice allows all associates to interact di- rectly with anyone else they need to, without concern for a formal chain of command.

3. Some of the void that is left by the Ictb- sence of structure and management (in a tra- ditional sense of those terms) can be filled by culture and norms. Gore relies on spons(biis, not managers, to help guide associates and to serve as advocates for less experienced eriii- ployees. At Gore, innovation, teamwork, arid independent effort are valued and the asisd- ciates are well aware of it. The Gore cultiiie encourages fairness, freedom, and comtî iit- ments in an overall system that emphasises contribution to the entire organizational team.

4. While formally designated, relatively permanent teams may not be needed, lots pf teamwork is. Gore relies heavily on fluid, teirii- 59

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porary self-developing teams and on an over- all commitment to contributing to the entire organization team.

5. An unstructured system that empha- sizes self-management and requires individ- ual initiative can be a difficult transition for some employees. At Gore, many of the em- ployees love the system; others cannot take it and leave. Realistic "job previews" that inform employees about what t h e / r e getting into, along with orientation and training to prepare them to deal with high levels of autonomy, are probably essential ingredients for organi- zations considering adopting a similar system.

6. Leaving research and development unstructtured while encouraging everyone to get involved can lead to lots of innovation. At Gore, everyone is encouraged to get into the act of experimenting with new ideas. Some of Gore's most important products have resulted from the creativity of "regular" workers who came up with a different idea and had the encouragement and freedom to follow through on it.

7. Provide multiple opportunities for ev- eryone to participate in the organization and multiple ways for them to be rewarded for their participation. More than most compa- nies. Gore recognizes the individual employ- ee and the diversity of skills that each can bring to the workplace. Gore also recognizes individual contributions through its salary, profit sharing, and ASOP programs.

8. Consider self-management and a sys- tem such as Gore's with caution. While W. L. Gore has achieved some very impressive re- sults, it has also had its critics and those who have pointed out potential flaws with the system. BiU Gore argued that the lattice sys- tem should work best in start-up companies led by dynamic entrepreneurs.

VVe believe many of the principles un- derlying the Gore system could be adopted in most organizations, but should not be adopted blindly. Relying on self-developing teams without managers may not represent the right organizational approach for all, but it is sure worth a look.

Gore has gone beyond the ideal of a democratic, capitalistic organization to an

egalitarian, participative, entrepreneurial so- ciety. The values of Rousseau, Locke, Smith, and Jefferson are embodied in Gore's culture and operating systems. The difference be- tween many other economic enterprises and Gore is Uke the difference between a monar- chy and a participative democracy. In the for- mer, only a few have the right to a leadership role; in the latter, anyone with the requisite skill and motivation can become a leader. Fur- thermore, in the fornaer only a few can sig- riificantly profit financially; in the latter, many can profit.

The approach used by Gore is a radical shift from the usual practices of business, but other firms such as Herman Miller and Dana Corporation have developed (or are moving toward) similar values and culture. The keys for such a transformation are both organiza- tional and individual. Organizations must put into place the operating systems to allow individuals to use their array of skills, and be rewarded for so doing. Organizations also must rid themselves of the structure and processes that compartmentalize and create "we/they" feelings. Managers from other companies frequently visit Gore in an effort to understand how Gore does it. Anita McBride indicated that, in her experience, the majority walk away unwilling to face the organizational changes required.

At least as important as the organiza- tional changes are the individual ones re- quired. Individuals in the organization must master some basic self-leadership skills. And learning to lead themselves weU is usually a prerequisite for effectively leading others. Employees at all levels of the organization need to learn more than a set of speciaUzed technical skills. They need to learn the keys to motivating and directing themselves and to helping others to do the same.

Again, such a change is not for everyone or for all organizations. The commitment to the change must be whole, not half-hearted. To go half-way is to limit the potential for growth both individuaUy and economically. Individual and economic growth complement and sustain each other. Both must be un- leashed for organizations and individuals to

develop simultaneously. Gore h a s evolved into a society where the potential for both is unleashed. Organizations a n d their leaders that are interested in taking a similar p a t h must finfl effective ways to unleash the po- tential oi all. The lessons presented in this ar- ticle represent some practical guidelines for achieving this end.

If you wish to make photocopies or obtain reprints of this or other

articles in ORGANIZATIONAL DYNAMICS, please refer to the special reprint service instructions on page 80.

SELECTED BIBLIOGRAPHY

A number of sources were especially helpful in background material for this article, important of these were the W. L.

)ciates, who generously shared their viewpoints about the company. We es- appreciate the i n p u t from Anita

proyidini The mos Gore ass( time and pecfally McBride.

A able for Gore

Angr May 9,19

Hoerr, the boss,"

Price Republic,

Posn June 1986

number of published sources are avail- obtaining lnore information on W. L.

& Assodates. These include: tst, S. W., "Classless Capitalists," Forbes,

1983, pp. 123-4. •, J., "A co:mpany where everybody is Business Week, April 15,1985, p. 98. K., "Firm Thrives Without Boss," AZ ebruary 2,1986. it, B.G., "The first day on the job," Inc., pp. 73-5.

Rhodes, L., "The Un-manager," Inc., August 1982, p. 34.

Simtiions, J., "People Managing Them- selves: Uri-manageraent at W.L. Gore Inc.," The Jourtial for Quality and Participation, December

^ pp. 14-19. Ward, A., "An AU-Weather Idea," The New

York Timer, Magazine, Nov. 10,1985, Sec. 6. ''Wilbert L. Gore," Industry Week, Oct. 17,

19831 pp. 48-49. for rr ore information on empowered work

teams and compatible leadership approaches, we recommend the books SuperLeadership: Le!ad- ing Others to Lead Themselves byJCharles C. Manz a n d H e n r y P. Sims, Jr. (Prentice-Hall, 1989, Berkley, 1990), High Involvement Managementpy Edward E. Lawler, III (Jossey-Bass, 1986), afid Mastering Self-Leadership: Empowering Yourself for Personal Excellence by Charles C. Manz (rtrsn- tice-Hall, Forthcoming, 1991). We also recom- mend J. Richard Hackman's article "Psycholo- gy of Self-Management in Organization^" in Psychology and Work: Productivity Change and Em- ployment (American Psychological Association, 1986), edited by M.S. PoUack and R.O. Peil0ff; Richard E. Walton's article "From Control to Commitment in the Workplace" in the Hativ^rd Business Review (March/April 1985), and the kr- ticle by Charles C. Manz, David E. Keating,!ajid Anne Donnellon entitled "Preparing for an| 0 r - ganizational Change to Employee Self-Mdn- agement: The Managerial Transition," Or^ahi- zational Dynamics, 1990. ;

For information on overcoming manajjeri- al resistance to empowerment, see the^arjtiiiile by Tim Reinhard, Joseph Robinson, Jr., Tc|rifey Sloane, Frank Shipper, Janice L. Weir, and BiU Wickersham, "Handling Managerial Resist^riice to Employee Involvement," Journal of Quklity and Participation (December 1991). : i 61