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  • 14/04/2015 13:46Case-study: WL Gore & Associates

    Page 1 of 5http://businessin21stcentury.com/articles/profile-gore/

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    Case-study: WL Gore & Associates! By Erwin van der Koogh (/about/) " 0 Comments # 10 min

    A company with 10,000 employees & $3.2 billion in revenue that has consistently

    won awards for Most innovative company & Best place to work is challenging

    everything we think we know about how to run a business. It has no traditional

    managers, titles or budgets and it is very wary about economies of scale. Their CEO

    is not appointed by the board, but chosen by peers.

    And if you think this company cant possibly be in business for long; William (Bill) L.

    Gore and his wife Viev started it in 1958 by. Their company, W.L Gore & Associates (http://www.gore.com/) is most

    famous for their Gore-Tex fabric, but they have thousands of other products across 4 lines of business.

    Did I mention they have been protable every year since their foundation? So how do they do it?

    Scaling autonomyThe most important decision made within WL Gore & Associates was the one that Bill made when he started the

    company. It would be based on the task force model that was sometimes used in his previous company DuPont. Small,

    cross-functional teams with a clear goal and outside any formal hierarchy. His question was whether it was possible to

    run a complete company like that all the time.

    It turned out the answer is a resounding Yes!

    ACKNOWLEDGE KNOWLEDGE WORKERS

    At WL Gore & Associates they are very aware that every employee working there is a knowledge worker and that that

    requires a completely dierent way of thinking about management.

    There are no arbitrary top-down assigned targets that people have to make. Everything is driven bottom-up. Everyone

    makes their own commitments and those are aggregated into forecasts.Everyone within Gore is called an associate, to

    show no formal ranks exist. Associates are then able to work on whatever projects they can contribute to most. Even if

    that means starting up a completely new one.

    SPONSORS

    There are no bosses or managers in the company. Instead they have leaders and sponsors. Every employee has one or

    more sponsors. Sponsor are there to help employees succeed, by mentoring, giving feedback and connecting you with

    others.

    But they are not bosses and cant tell people what to do or else.

    10 TYPES OF LEADERS

    Within Gore there are tons of leaders. A leader is not a full-time position you are for life based on seniority. If enough

    people follow you because you are helping them succeed you are a leader. A quote from an anonymous Gore employee:

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    Change is changing. Between the

    increasing rate of technology adoption,

    plummeting hardware prices and the

    power shift from companies to

    consumers, the only competitive

    advantage left is having a learning

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    build for the exact opposite: Eciently

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  • 14/04/2015 13:46Case-study: WL Gore & Associates

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    Terri Kelly, CEO of WL Gore & Associates

    people follow you because you are helping them succeed you are a leader. A quote from an anonymous Gore employee:

    If you call a meeting and no one shows up, you are probably not a leader

    And there is not The Leader, but there are many dierent types of leaders at many dierent levels. Some of them are:

    Technical leader

    A technical leader is someone who is recognized by a team as having a special knowledge or experience (for example,

    this could be a chemist, computer expert, machine operator, salesman, engineer,lawyer). This kind of leader gives the

    team guidance in a special area.

    Commitment seeker

    Is someone the team looks to for coordination of individual activities to achieve the agree on objectives of the team. The

    role of this leader is to persuade team members tomake the commitments necessary for success.

    Objective leader

    The associate who proposes necessary objectives and activities and seeks agreement and teamconsensus on

    objectives.This leader is perceived by the team membership as having a good grasp of how the objectives of the team t

    in with the broad objective of the enterprise. This kind of leader is often also the commitment seeking leader.

    Contribution leader

    The leader who evaluates relative contribution of team members (in consultation with other sponsors) and reports these

    contribution evaluations to a compensation committee. This leader may also participate in the compensation committee

    on relative contribution and pay andreports changes in compensation to individual associates. This leader is often also a

    compensation sponsor.

    Product specialists

    The leader who coordinates the research, manufacturing, and marketing of one product type within a business,

    interacting with team leaders and individual associates who have commitments regarding the product type.

    They are respected for their knowledge and dedication to their products.

    Plant/Business/Functional leaders

    Help coordinate activities of people within a plant/business/functional area.

    Corporate leaders

    Help coordinate activities of people in dierent businesses and functions and who try to promote communication and

    cooperation among all associates.

    Intrapreneuring associates

    Are those people who organise new teams new businesses, new products, new processes, new devices, new marketing

    eorts, new or better methods of all kinds. These leaders invite other associates to sign up for their project.

    THE CEO

    WL Gore & Associates does have a CEO. The current CEO Terri Kelly was voted into the job in 2005. You read that right:

    Voted. And even as a CEO she cant tell anyone in the company what to do. And that is a good thing. In her own words:

    I think its wrong to believe that the most important decisions in an enterprise are made bysenior leaders. Some of the most impactful decisions at Gore are made by small teams.

    Networked structure & communicationsRELATIONSHIPS AND DIRECT COMMUNICATION

    Relationships and Direct Communication is one of the core values of Gore. You are encouraged to form relationships

    with people inside your unit, outside your unit, vendors, suppliers and customers.

  • 14/04/2015 13:46Case-study: WL Gore & Associates

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    Thomas A. Edison

    KEEP IT SMALL

    One day Bill Gore drove into work when he realised that he did not know everyone in the plant. Realising that his culture

    was driven by interpersonal relationships he made a bold move: Instead of choosing the economies of scale he choose

    to split the plant and build a new one across the road.

    Whenever a group or division reaches about 150-200 people Gore will still split up the people and move one of the

    groups to a new location.

    This was later backed up by research done by Robin Dunbar and is known as Dunbars Number

    (http://en.wikipedia.org/wiki/Dunbar%27s_number). After studying primates he found a correlation between the brain

    size of primates and the size of the social group. Running the numbers for humans he came to a prediction of 150.

    Later research conrmed that that is indeed roughly the average amount of people we can form meaningful

    relationships with.

    SIMPLE RULES

    Bill Gore articulated four culture principles that he called freedom, fairness, commitment and waterline:

    Associates have the freedom to encourage, help, and allow other associates to grow in knowledge, skill, and scope

    of responsibility

    Associates should demonstrate fairness to each other and everyone with whom they come in contact

    Associates are provided the ability to make ones own commitments and are expected to keep them

    A waterline situation involves consultation with other associates before undertaking actions that could impact the

    reputation or protability of the company and otherwise sink the ship.

    Innovation & ExperimentationGore has been hailed many times as one of the most innovative company on the planet. Certainly on par with innovation

    powerhouses like 3M and GE.

    INVESTMENTS VS BUDGETS

    There are very few budgets at Gore. Budgets promote short-term thinking and that is not what they want. So they look at

    it individual opportunities and gure out if it is worth investing. At Gore they do more structured nancial planning these

    days than before, but even that is a consensus based approach.

    They are in it for the long-term.

    ACCEPTING FAILURE

    Failure is a part of innovating. And one you cant do without. As Edison remarked on his quest to nd the right material

    for the light bulb:

    I have not failed. Ive just found 10,000 ways that wont work.

    ConclusionWL Gore & Associates is a company with an amazing culture. It has won many awards for the best workplace and many

    for more innovative. And I think those go hand in hand.You can not have innovation without engaged employees. And

    the best way to get engaged knowledge workers is to give them the tools to succeed and get out of the way. This quickly

    becomes a self-fullling prophecy.

    Gore has this thinking rmly rooted in its DNA from the beginning, but the million dollar question is if it is possible to

    achieve in existing companies. I am not sure, but if you have heard of any company that went from a traditional

    command & control culture to one resembling this, I would love to hear about it in the comments.

    Resources used in this article:

    Wikipedia (http://en.wikipedia.org/wiki/W._L._Gore_and_Associates)

    Management Exchange (http://www.managementexchange.com/story/innovation-democracy-wl-gores-original-

    management-model)

  • 14/04/2015 13:46Case-study: WL Gore & Associates

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    3ShareShare TweetTweet 13 4 18

    management-model)

    Guardian (http://www.theguardian.com/business/2008/nov/02/gore-tex-textiles-terri-kelly)

    Gary Hamels blog on Wall Street Journal (http://blogs.wsj.com/management/2010/03/18/wl-gore-lessons-from-a-

    management-revolutionary/)

    Gore Website (http://www.gore.com/en_xx/careers/whoweare/ourculture/gore-company-culture.html)

    Gore Case Study (https://www.academia.edu/964711/Classic_Case_6_WL_Gore_and_Associates_Inc)

    $ Share this post

    ! AuthorErwin van der Koogh

    (https://plus.google.com/+ErwinvanderKoogh?rel=author)Erwin is a typical Maven (http://en.wikipedia.org/wiki/Maven). A collector (and mixer) of cool ideas on how to radically change theway we do business. To unleash the potential of employees at all levels to delight customers everywhere. That is the only way to

    survive & thrive in the 21 century. Follow Follow @evanderkoogh@evanderkoogh

    Scale Agile by Scaling Autonomy8 comments a year ago

    Jon Eversett Hi Astrid, great to meet you too!Thanks for your post as it has made me re-read mineand also made me realize that my phrasing

    Zappos gets rid of hierarchy, adopts Holacracy1 comment a year ago

    umair as a HR manager what you think holacracy isa good concept. tell me the advantages anddisadvantages of holacracy

    Quotes About Doing Business in the 21st Century3 comments a year ago

    Nick Zdunic "If you are not embarrassed by the firstversion of your product, you've launched too late" -Reid Homan "suppress passion by

    Are We Rather Wrong Than Uncertain?3 comments a year ago

    Nick Zdunic I had an issue with giving an estimatelast year which factored into my demise there.Sometimes it's dicult to explain. About 13 years

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