There is the story of the employee who told company founder Bill Gore that she had to attend an outside meeting where hosts would expect her to have a job title--a custom banished by Gore, who believed that such distinctions stifled freedom, communication and creativity. He jokingly suggested that she call herself "supreme commander." The employee reportedly liked it so much she had business cards printed with that inscription.

    Over the years, the Newark, Delaware, manufacturer has grabbed the lead in numerous markets through technological breakthroughs. That strategy has been facilitated in large part by Gore’s unorthodox workforce management practices, such as a "flat lattice" organizational structure by which the company strives to encourage creativity.

    "We work hard at maximizing individual potential, maintaining an emphasis on product integrity and cultivating an environment where creativity can flourish," says Terri Kelly, the company’s new president and CEO. "A fundamental belief in our people and their abilities continues to be the key to our success, even as we expand globally."

    In many ways, little has changed during the history of the 48-year-old firm, which in January placed fifth on Fortune’s list of "The 100 Best Companies to Work For." Gore’s employees--all "associates" in Gore-speak--still are encouraged to spend at least some of their time developing pet projects in addition to their regular work. Instead of bosses, they have "sponsors" who help them find the place in the organization where their skills and interests will best fit. They recruit one another to work in scores of small teams rather than sprawling bureaucracies, and are evaluated on the value of their contribution to the team rather than strictly upon their work’s bottom-line impact.

    The privately held company, which had $1.84 billion in worldwide sales in 2005, up 16.5 percent from the previous year, markets more than 1,000 products ranging from heart patches and synthetic blood vessels to plastic-coated acoustic guitar strings that are more dependable than conventional metal ones.

    But as Gore has grown--from 3,000 workers in the early 1980s to 7,300 engineers, salespeople, medical device assemblers and others in 45 facilities worldwide today--and shifted to supplying multinational clients whose manufacturing facilities may be scattered around the globe, the company has been compelled to tinker with its trademark culture. For other companies, Gore provides a useful lesson in how to develop more formalized practices without stifling innovation.

    "From a practice and operations standpoint, we have to do things a little differently," says Gore human resources associate Jackie Brinton. "But our basic culture hasn’t changed. We still believe in the power of the individual who is given the freedom to do great things and in the beauty of small teams, even though we’re now operating on a global, coordinated scale."

Getting bigger while staying small
    The classic Gore culture began in the basement of the home of Bill Gore, who left DuPont in 1958 to create his own enlightened version of the workplace. Gore built the company upon four core principles--fairness; freedom to encourage others to grow in knowledge, skill and responsibility; ability to honor one’s own commitments; and consultation with others before taking action that could affect the company "below the waterline." Instead of the typical corporate hierarchy, he created a "flat lattice" organization that not only had no titles, but also no chains of command or predetermined channels of communication.

    In Gore’s model, associates communicate directly with one another and are accountable to their peers rather than bosses. Ideally, leaders in the company emerge naturally by demonstrating special knowledge, skill or experience--"followship." Thomas Malone, a professor at Massachusetts Institute of Technology’s Sloan School of Management and the author of The Future of Work, describes Gore as a "miniature democracy."

    "The way you become a manager is by finding people who want to work for you," Malone says. "In a certain sense, you’re elected rather than appointed. It’s a democratic structure inside a business organization."

    The $1.84 billion company’s flat organizational structure makes it exceptionally nimble. "If someone has an idea for a new product, they don’t have to go up a hierarchy to find some boss to approve it," says John Sawyer, chairman of the department of business administration at the University of Delaware. "Instead, they have to find peers in the organization who support the idea and will work with them. That open style of communication allows ideas to come up from the bottom."

    The company developed shred-resistant Glide dental floss, for example, after an associate wondered whether Gore’s industrial fibers could be used for cleaning teeth as well. Engineers at Gore’s Flagstaff, Arizona, plant worked for three years on their own to develop plastic-coated guitar string before they offered the product of their inspiration to the company, which successfully marketed it.

    In his 2000 best-seller The Tipping Point, author Malcolm Gladwell described Gore’s traditional practice of limiting the size of its plants to roughly 150 workers, because that was the largest group of people who could know one another well enough to converse in the hallway. Today, however, human resources associate Brinton works in a plant with more than 300 fellow associates. More important, associates in multiple countries may have to work together to service a single multinational client.

    In addition to encouraging the old hallway chats, Gore now has regular plant communications meetings where leaders share with the associates news about company performance, discuss safety and introduce new workers.

"It’s a challenge to get bigger while staying small," Brinton says. Associates still work in small teams and frequently meet face to face--though in some cases the teammates may be on several continents and do much of their communicating by phone or e-mail.

    "It’s tough to build relationships by e-mail," Brinton says. "For us, that’s a work in progress right now. We do bring global teams together physically on a fairly regular basis." Brinton can’t calculate the expense of such travel, but says it is substantial.

    In recent years, Gore has also begun subjecting its product development process to more discipline, the University of Delaware’s Sawyer says. While associates still initiate their own projects and build support for them, an evaluation team measures their progress against metrics or goals that must be reached in order for a project to progress.

Illusion of chaos
    Gore’s recruiters still spend months and sometimes years filling job vacancies because it isn’t easy to find people who not only have the right business skills, but also are temperamentally and intellectually suited for the unorthodox environment. "It isn’t a company for everyone," Brinton says. "It takes a special kind of person to be effective here--someone who is really passionate about sharing information, as opposed to controlling it. Someone who can handle a degree of ambiguity, as opposed to ‘Here’s my job and I only do these tasks.’ Someone who’s willing to lift his or her head up from the desk and see what the business’ real needs are."

    Even those select few hires, a fraction of a percent of the 38,000 applications that the company receives annually, sometimes start with the misconception that the company is a place where employees do literally whatever they choose. "There’s certainly a misunderstanding in many cases about what freedom means at Gore," Brinton says. "People can’t figure out how it might work. It sounds like chaos."

    In reality, there is structure at Gore driven by a certain internal logic--and the belief that motivated individuals eventually gravitate toward the things they do best. The non-utopian reality is that associates are hired to fill certain set expectations and meet certain business needs--in Gore parlance, the "core commitment." They must build credibility by performing those obligatory functions before they can pursue their own ideas and persuade other associates to form a team to work on them.

    Ed Gunzel, a 12-year associate at Gore who gradually has become a technical leader, describes his path: "I started out working in new product development, the consumer side of fabrics, and really enjoyed that. But eventually, over time, I saw some areas where I could have a bigger impact, in terms of helping align teams around certain objectives and seeing where we could go with our technology for military, fire and law enforcement use. I saw that need and chose to get involved, and that’s become more of my core commitment than individual products."

    These days, Gore associates use the company intranet to seek out opportunities elsewhere in the organization, but personal relationships still remain at the core of the company’s development process--the relationship between an associate and his or her sponsor, and the relationships among sponsors. "The sponsor’s role is to be broadly knowledgeable about the business, to be able to help the associate find opportunities," Brinton says.

    The mentoring process has changed slightly in recent years. In the past, sponsors might have had informal conversations about associates’ performance and prospects. Brinton says that Gore now has a more structured system, the Fall Development Process, in which teams of sponsors meet to discuss whether the associates under their guidance are in the roles that best utilize their skills and to talk about what other opportunities there might be for them in the company. "When we were smaller, everyone knew what was happening everywhere," Brinton says. "But now that we’ve become broader globally, someone sitting in a single plant might not be able to see all the opportunities."

    Even so, "we’re not moving pieces on a chessboard here," Brinton says. "We’re making recommendations to the associates. They’re the ones who actually make the decision about what role they’re going to pursue. Sometimes, it may be in a different direction than what the sponsor suggests, based upon their passions."

    Gore’s evaluation process looks at an associate’s work but doesn’t focus strictly on the bottom-line impact. "For example, if a sales associate got involved in a training program, the person’s sales numbers may be down, but his or her overall contribution may be up," Brinton says. "You have to look at the whole person, and whether he or she is making a contribution in a different way."

    Additionally, "people can be involved with projects that weren’t successful, but still can be ranked high from a contribution standpoint," Brinton says. "When you’re an entrepreneurial organization, you’re going to be taking some risks. That doesn’t mean that the person doing that work made less of a contribution. We’re valuing people who take smart risks. And you learn a lot from projects that fail, as well as ones that are successful."

    While other companies have instituted small, self-managed teams and some other aspects of Bill Gore’s philosophy, no imitator has taken those concepts as far as the company he founded, says Henry Sims Jr., a professor of management at the University of Maryland’s graduate business school and an expert on small, self-managing teams. "One of the things that’s different about Gore is that they started with this philosophy," Sims says.

    "There’s a lot of evidence that these small, empowered teams can be very effective, but they take a great deal of time and attention to develop. And changing to that system requires a period of difficult and frustrating transition," he says. "Once teams reach a mature stage, as they have at Gore, they can do things a lot better. They can produce products at a lower cost, bring in new processes more rapidly and smoothly, innovate more quickly."

    Brinton says Gore has been able to maintain its unique approach in part because the company remains privately held. "The beauty is that we can make decisions that support our ongoing growth, and not have to just do things because we need to look good for the next quarter," she says.

Workforce Management, February 27, 2006, p. 1, 22-27 -- Subscribe Now!