This action might not be possible to undo. Are you sure you want to continue?
Frank Shipper Salisbury State University Charles C. Manz Arizona State University
To make money and have fun. W. L. Gore
On July 26, 1976, Jack Dougherty, a newly minted MBA from the College of William and Mary, dressed in a dark blue suit and bursting with resolve, reported for his first day at W. L. Gore & Associates. 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 one thing for which Jack was not ready. Gore replied, “That’s fine, Jack, fine. Why don’t you look around and find something you’d like to do.” Three frustrating weeks later he found that something, dressed in jeans, loading fabric into the mouth of a machine that laminated the company’s patented Gore-Tex membrane to fabric. By 1982, Jack had become responsible for all advertising and marketing in the fabrics group. This story was part of the folklore that was heard over and over about W. L. Gore. By 1991, the process was slightly more structured. New associates took a journey through the business before settling into their own positions, regardless of the position for which they were hired. A new sales associate in the Fabric Division might spend six weeks rotating through different areas before concentrating on sales and marketing. Among other things, he or she might learn how Gore-Tex fabric was made, what it could and could not do, how Gore handled customer complaints, and how it made investment decisions. Anita McBride related her early experience at W. L. Gore & Associates this way: Before I cam 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 training and 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, “Well, here’s your 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 description. Finally after another month I was so frustrated, I felt, “What have I gotten myself into?” And so 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 commitment, and opportunities.”
W. L. Gore & Associates evolved from the late Wilbert L. Gore’s experiences personally, organizationally, and technically. He was born in Meridian, Idaho, near Boise in 1912. By age six, he claimed he had become an avid hiker in the Wasatch Mountain Range in Utah. In those mountains, at a church camp, he met Genevieve (called Vieve by everyone), his future wife. In 1935, they got married, which was, in their eyes, a partnership—a partnership that lasted a lifetime. He received both a bachelor of science degree in chemical engineering in 1933 and a master of science in physical chemistry in 1935 from the University of Utah. He began his professional career at American Smelting and Refining in 1936; moved to Remington Arms Company in 1941; and moved once again to E. I. du Pont de Nemours in 1945 where he held positions of research supervisor and head of operations research. While at Du Pont, he worked on a team to develop applications for polytetraflurothylene, 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 excited commitment, personal fulfillment, and self-direction. He
000. with about 200 employees. One warm Monday morning in the summer. In addition.” Bill Gore was 45 years old with five children to support when he left Du Pont. the president. L. he woke his son waving a small piece of cable around. The titles of president and secretary-treasurer were used only because they were required by the laws of incorporation.followed the development of computers and transistors and believed that PTFE had the ideal insulating characteristics for use with such equipment. Gore & Associates was a company without titles. The basement of their home served as their first facility.” The following night father and son returned to the basement lab to make ribbon cable coated with PTFE. but wanted to ask some technical questions and asked for the product manager. Bob saw some PTFE sealant tape made by 3M and asked his father. the Gores eventually secured an order for $100. On January 1. Vieve answered a phone call while sifting PTFE powder. He was explaining the problem to his son. This order put the company over the hump and it began to take off. go downstairs. it works. let’s clear up the dishes. “It works. he had become chairman and his son. Bill Gore tried to persuade Du Pont to make a new product—PTFE-coated ribbon cable. “The company belief is that (1) its four basic operating principles cover ethical practices required of people in business and (2) it will not tolerate illegal practices. After finishing dinner on their anniversary. 11 employees were living and working under one roof.” So. Vieve remained as the only other officer.” Gore’s management style was often referred to as unmanagement. they founded W. Bill Gore remained in his basement lab and proceeded to try what everyone knew would not work. the associates of some business units who felt a need for such statements had developed them. finally. hierarchy. The first few years were rough. Next he asked for the sales manager and. When questioned about this issue. Bill Gore died while backpacking in the Wind River Mountains of Wyoming. saying excitedly. But Bill was out running some errands. One afternoon. in 1965. 1958. they mortgaged their house and took $4. After talking to a number of decision makers. The caller indicated he was interested in the ribbon cable. Gore & Associates continued to grow and develop new products primarily derived from PTFE. In lieu of salary. Gore-Tex. Delaware. one associate stated. Bob. which they viewed as another partnership. their wedding anniversary. Gore did not have a corporate-wide mission or code of ethics statement. The Operating Company W. W. About 4 AM. W. A breakthrough came in his home basement laboratory.000 from savings. Bob went on to bed. or any of the conventional structures associated with enterprises of its size. The majority of business units within Gore did not have such statements. so Vieve explained that he was out at the moment. president. Vieve explained that they were also out. and get to work. Bill Gore knew some of the decision makers at Du Pont. Bill 2 . Vieve turned to her husband of 23 years and said. however. Gore & Associates. “Well. it became clear that Du Pont wanted to remain a supplier of raw materials and not a fabricator. Gore & Associates was a thriving and growing company with a facility on Paper Mill Road in Newark. By this time in his career. L. In 1986. L. Before he died. “Why don’t you try this tape?” His father then explained to his son. At one point. The caller became outraged and hollered. secretary-treasurer. He left behind a career of 17 years and a good and secure salary. The organization had been guided by Bill’s experiences on teams at Du Pont and has evolved as needed. Bob. some of their employees accepted room and board in the Gore home. including its best-known product. For example. “Everyone knows you can not bond PTFE to itself. All of their friends cautioned them against taking the risk. L. To finance the first two years of the business. Bill began to discuss with his wife the possibility of starting their own insulated wire and cable business. Then came the order from the City of Denver’s water department that put the company on a profitable footing. “What kind of company is this anyway?” With a little diplomacy. He tried a number of ways to make a PTFE-coated ribbon cable without success. For the next four months. neither did Gore require nor prohibit business units from developing such statements for themselves. Thus.
By 1991. and other outdoor enthusiasts had also become big customers of garments made of Gore-Tex fabric. industrial seals. Gore-Tex expanded PTFE was an ideal material used to combat cardiovascular disease. electronic switching for telephone systems. Boots and gloves. Gore wire and cable assemblies were used in the space shuttle Columbia because they would stand the heat of ignition and the cold of space. Gore-Tex fibers were in many ways the ultimate in synthetic fibers. France. W. That made GoreTex fabric ideal for anyone who worked or played hard in foul weather. pants.300 associates. When human arteries were seriously damaged or plugged with deposits that interrupt the flow of blood. Gore-Tex was even becoming government issue for many military personnel. The wire and cable products had a reputation for unequaled reliability. On earth. Gore-Tex fabric was waterproof and windproof. hunters. For example. L. The outer protective layer of NASA’s spacesuit was woven from Gore-Tex fibers. As a result. scientific and industrial instrumentation. parkas. known as Gore-Tex cardiovascular patches. the diseased portions could often be replaced with Gore-Tex artificial arteries. and microfiltration. and industrial robotics. and India. Products The products that W. In medical products. the company established a policy that no facility would have over 150 to 200 employees. They had saved limbs from amputation and saved lives. headgear. waterproofing fabrics. runners. The PTFE membrane blocked wind and water but allowed sweat to escape. The electronic products division produced wire and cable for various demanding applications in aerospace. They were impervious to sunlight. sailors. heat.Gore was taking his usual walk through the plant. coatings. Germany. with four plants on the same site. Thus was born the expansion policy of “Get big by staying small. In some cases. Gore-Tex was also used to help people with kidney disease. Reliability was a watchword for all Gore products. Twenty-seven of those plants were in the United States and 17 were overseas. Japan. chemicals. industrial filtration. Gore-Tex arteries and patches were not rejected by the body because the patient’s own tissues grew into the grafts’ open porous spaces. the electrical wire products helped make the world’s fastest computers possible because electrical signals could travel through them at up to 90 percent of the speed of light. both for work and recreation. Associates were developing a variety of surgical reinforcing membranes. Gore’s overseas plants were located in Scotland. Through the waterproof fabrics division. Gore technology had traveled to the top of the world on the backs of renowned mountaineers. ended up in some tough places. yet breathable. Those features had qualified Gore-Tex fabric as essential gear for mountaineers and adventurers facing extremely harsh environments. defense. and Gore’s microwave coaxial assemblies opened new horizons in microwave technology. General sportswear and women’s fashion footwear and handwear of Gore-Tex fabric were as functional as they were beautiful. Arizona. microwave communications. and boots kept the troops warm and dry in foul-weather missions. reliability was literally a matter of life and death. like the fabrics. Because of the physical properties of the Gore-Tex material used in their construction. the plants were clustered together on the same site as in Flagstaff. medical. L. the electronic products were used extensively in defense systems. and telecommunications. computers. fibers. 3 . Gore made were organized into eight divisions—electronic. Other demanding jobs also required the protection of GoreTex fabric because of its unique combination of chemical and physical properties. bicyclists. They were strong and uniquely resistant to abrasion. Backpackers had discovered that a single lightweight Gore-Tex fabric shell would replace a poplin jacket and a rain suit and dramatically outperform both. Some of the tiniest grafts relieved pulmonary problems in newborns. were waterproof thanks to Gore-Tex liners. Most of the wire and cable was used where conventional cables could not operate. Skiers. which could literally mend broken hearts. Wet suits. The Gore-Tex fibers products. Gore wire was used in the moon vehicle shuttle that scooped up samples of moon rocks. fishermen. gloves. All of a sudden he realized he did not know everyone in the plant. Gore & Associates consisted of 44 plants worldwide with over 5. and cold. The team had become too big.” The purpose of maintaining small plants was to accentuate a close-knit and interpersonal atmosphere. Gore-Tex vascular grafts came in many sizes to restore circulation to all areas of the body. by patching holes and repairing aneurysms.
His other associates had no problems accepting him. The individual had 30 years of experience in the industry before joining Gore. 1 In comparison.” He believed they stifled individual creativity. they could acquire additional sponsors. only 11 of the 200 largest companies in the Fortune 500 have had positive ROE each year from 1970–88 and only two other companies missed only one year. $400 million. It had had 27 straight years of profitability and positive return on equity. they were initially screened by personnel specialists as in most companies. helping and encouraging. total sales were $6 million.Industrial filtration products. Organizational Structure Bill Gore wanted to avoid smothering the company in thick layers of formal “management. W. $600 million. Eighty percent of the stock was held by the Gore family and veteran associates. 1 In 1969. Sponsoring was not a short-term commitment. If they moved to another area. Steam valves packed with Gore-Tex valve stempacking never leaked and never needed to be repacked. When individuals were hired. 4 . and in 1989. The sponsor was both a coach and an advocate.4 percent compared to 2. he knew a way had to be devised to assist new people to get started and to follow their progress. L. Gore & Associates was working just fine by any financial measure. pharmaceutical manufacturing. These membranes removed bacteria and other microorganisms from air or liquids. dealing with weaknesses and concentrating on strengths. sealing them to prevent leakage of corrosive chemicals. This growth had largely been financed without debt. some anomalies occurred in the hiring practices. even at extreme temperature and pressure. Called Fluoroshield protective coatings. Bill Gore proudly told the story of “a very young man” of 84 who walked in. Gore’s return on assets and equity ranked it among the top 5 percent of major companies. in 1988. and 10 percent by others. They could make coal-burning plants smoke free. As associates’ responsibilities grew. they had a sponsor in their immediate work area. Financial information was as closely guarded as proprietary information on products and processes. contributing to a cleaner environment. but the personnel computer did. 10 percent by current associates. All associates had sponsors and many had more than one. this fluorocarbon polymer protected processing vessels in the production of corrosive chemicals. $125 million. they also had a sponsor in that work area. When people applied to W. According to Shanti Mehta. Before anyone was hired. reduced air pollution and recovered valuable solids from gases and liquids more completely than alternatives. According to another source. an associate must have agreed to be that person’s sponsor. It insisted his age was 48. The revenue growth rate for these 13 companies was 5. The industrial seals division produced joint sealant. Gore was a closely held private corporation. The coatings division applied layers of PTFE to steel castings and other metal articles by a patented process. there were interviews with other associates. Gore. $426 million. applied. making them sterile. This was seen as particularly important when it came to compensation. Gore & Associates developed what it called the “sponsor” program to meet these needs. $160 million. an associate. problems. The compounded growth rate for revenues at W. W. Gore-Tex microfiltration products were used in medical devices. The sponsor tracked the new associate’s progress. a flexible cord of porous PTFE that could be applied as a gasket to the most complex shapes. L. L. Because the sponsoring program looked beyond conventional views of what made a good associate. The sponsor was to take a personal interest in the new associate’s contributions. in 1982. $250 million. Financial Information W. For those who met the basic criteria. in 1985. As the company grew. and chemical processing. such as Gore-Tex filter bags. and spent five very good years with the company. they also did it more economically. L. L. Gore over the past 20 years had been over 18 percent discounted for inflation. and goals.5 percent for the entire Fortune 500. in 1983. in 1987.
The sponsor who helps a new associate get started on the job. the University of Pittsburgh’s senior resident. It’s where the news spreads like lightning. every which way. A lot of useless effort is avoided because there is no rigid management hierarchy to conquer before you can attack a problem. “So am I. 7. a group of 30 to 40 associates who made up an advisory group met every six months to review marketing. works particularly well in a crisis.An internal memo by Bill Gore described three kinds of sponsorship and how they might work as follows: 1. 9. not bosses. a lattice. 2. Sponsors. and groupimposed discipline. “Every successful organization has an underground lattice. in 1975. Dr. sales.” Tasks and functions organized through commitments. Actually. Gore & Associates had not only been described as unmanaged. Also. A lattice structure is portrayed in Exhibit 1. where people can go around the organization to get things done. Objectives are set by those who must “make them happen. natural leadership.” The lattice structure was not without its critics. The sponsor who sees to it the associate being sponsored gets credit and recognition for contributions and accomplishments (advocate sponsor). Often (perhaps usually) two associates sponsored each other as advocates. EXHIBIT 1 The Lattice Structure Bill Gore once explained this structure by saying. A sponsor was a friend and an associate. The sponsor who sees to it that the associate being sponsored is fairly paid for contributions to the success of the enterprise (compensation sponsor). by its very nature.” Another description of what was occurring within the lattice structure was constant cross-area teams—the equivalent of quality circles going on all the time. As Bill Gore stated. Charles Campbell. 5. 6. “The abdication of titles and rankings can never be 100 percent. Lines of communication are direct—person to person—with no intermediary. The structure within the lattice was described by the people at Gore as complex and had evolved from interpersonal interactions. You ask me how it works. reported a Gore-Tex arterial graft had developed an aneurysm. Bill Gore referred to the structure as a lattice organization. and production plans. For instance. A single sponsor could perform any one or all three kinds of sponsorship. 5 . 3. but also as unstructured. All the supportive aspects of the friendship were also present. 8. No fixed or assigned authority. Bill replied with a grin. The characteristics of this structure were: 4. the sponsor who helps a present associate get started on a new job (starting sponsor).” The lattice structure did have some similarities to traditional management structures. “I’m told from time to time that a lattice organization can’t meet a crisis well because it takes too long to reach a consensus when there are no bosses. L.” The lattice had been put to the test on a number of occasions. For example. As Bill Gore has conceded. When a puzzled interviewer told Bill he was having trouble understanding how planning and accountability worked. Natural leadership defined by followership. But this isn’t true. self-commitment to group-known responsibilities. W.
no prohibition against first-class travel. 11. but it’s always evolving. the fourth principle provided associates with a great deal of discretion. the boat would be in immediate danger of sinking. Eric Reynolds. this kind of problem had to be solved quickly and permanently. W. commitment. and keep them. I mean after you’ve established a relationship with someone about product quality. It’s frustrating to find a lack of continuity. The last principle was also often referred to as the waterline principle. you can call up one day and suddenly find that someone new to you is handling your problem. Organizational Culture In addition to the sponsor program. In other words. and discretion. had an idea before the meeting was over. If it continued to expand. Gore had no travel policy.” He maintained the lattice system worked best when put in place in start-up companies by dynamic entrepreneurs. “Very few people take advantage of this. The associate called an internal travel consultant and gave the individual his or her requirements. in three hours. you’ve saved Y. we’ll call the traveler and ask him to be more careful next time. Colorado. The meeting lasted two hours. of Grand Junction. The four principles were often referred to as fairness. But no one ever pays money back on an investment report. By 1991. It’s only the infrequent travelers who sometimes get carried away. the boat would be in relatively little real danger. 12. a former policeman who had joined Gore to develop new production methods. L. Too many hierarchies would be destroyed. said.” He went on to say. L. Obviously. You have to expect problems. But if someone poked a hole below the waterline. “The normal coach fare is X. If someone poked a hole in a boat above the waterline. he flew to Newark to present his findings to Bill and Bob Gore and a few other associates. “But I have to admit that I’ve personally seen at Gore remarkable examples of people coming out of nowhere and excelling. no request for travel forms. 13. The travel consultant dropped that firm and picked up another without checking with anyone else. The lattice works for us. W. Gore associates were asked to follow four guiding principles: 10. “I think the lattice has its problems with the day-to-day nitty-gritty of getting things done on time and out the door. Try to be fair. For example. established companies would find it very difficult to use the lattice. and no expense reports. it may very well be someone other than the person who has been in charge. Hubis’s redesigned graft went on to win widespread acceptance in the medical community. Gore had been doing business with three different rental car companies when one became more expensive. 6 . I don’t think Bill realizes how the lattice system affects customers. it would explode. In practice.” The travel consultant also had a high amount of discretion. a potentially damaging problem to both patients and the company was resolved. Bill Hubis.” Bill Gore was asked a number of times if the lattice structure could be used by other companies. His answer was. Use your freedom to grow. According to Debbie Sharp. and a major Gore customer. Within only a few days of Dr. freedom. it dominated the market with a 70 percent share. founder of Marmot Mountain Works Ltd. He returned to his work area to try some different production techniques. Campbell’s first report. he had developed a permanent solution. For example. If we see expenses that stand out. When you remove titles and positions and allow people to follow who they want. Furthermore. Make your own commitments. For example.” Upon return. the associate could file a travel investment report and be reimbursed for his or her savings investment. The terminology was drawn from an analogy to ships. “No. Consult with other associates before any action that may hurt the reputation or financial stability of the company. After only three hours and 12 tries. All tickets issued to Gore travelers were accompanied by a note that stated.An aneurysm is a bubble-like protrusion that is life-threatening. One critic.
” was accepted. All the other members of the Gore organization were referred to as associates. lawyer). known as the “Ivory Snow Solution. The associate who is recognized by a team as having a special knowledge or experience (for example. other commonly heard words were “responsibilities” and “commitments. a great deal of the clothing was being returned. “My parka leaked and my life was in danger. but it did have many leaders. One of the most common words often heard in meetings was “Bullshit!” In contrast.The operating principles were put to a test in 1978. The pyramid consisted of Bob Gore. d. Peter W. “It was an incredible crisis for us at that point. Production and shipment had begun in volume. a fortune in pipeline material. Bill Gore described in an internal memo the kinds of leadership and the role of leadership as follows: a. The associate who proposes necessary objectives and activities and seeks agreement and team consensus on objectives. This leader is then also a compensation sponsor. One thing that might strike an outsider in the meetings and the other places in the Gore organization was the informality and amount of humor. as secretary-treasurer. e. One month later. As Gilson said. Gore. salesman. By this time. Bob Gore and other associates set out to develop a permanent fix. They also discovered a good washing could restore the waterproof property. This kind of leader is often also the “commitment seeking” leader. at our own expense. interacting with team leaders and individual associates who have b. Gilson told dealers that if at any time a customer returned a leaky parka. “We bought back. had a very short organizational pyramid. some of the clothing started coming back. Words such as employees. at the manufacturers. The role of this leader is to persuade team members to make the commitments necessary for success (commitment seeker). and marketing of one product type within a business. 7 . manufacturing. The leader who evaluates relative contribution of team members (in consultation with other sponsors) and reports these contribution evaluations to a compensation committee. The company’s reputation and credibility were on the line. A single letter from “Butch. but its members did not take themselves too seriously. engineer. and Vieve. for a company of its size. this could be a chemist.” As Gilson said. Waterproof fabric was one of the two major properties responsible for Gore-Tex’s success. changed the company’s position. subordinates. Next. Clearly our solution was no solution at all to someone on a mountaintop. Gore did not have any managers. Bill Gore’s widow. At first. said. the late Bill Gore’s son. a second generation Gore-Tex had been developed. Butch wrote how he had been leading a group and. The associate the team looks to for coordination of individual activities to achieve the agree-on objectives of the team.” In the meantime. as president. “That scared the hell out of us. the researchers determined certain oils in human sweat were clogging the pores in Gore-Tex and altering the surface tension of the membrane. Gilson. the word about the qualities of Gore-Tex were being spread throughout the recreational and outdoor markets. Finally. This leader may also participate in the compensation committee on relative contribution and pay and reports changes in compensation to individual associates. The leader who coordinates the research.” a mountain guide in the Sierras. The trouble was that the Gore-Tex was leaking. they should replace it and bill the company. Thus. At first this solution. machine operator.” This was an organization that seemed to take what it did very seriously. and managers were taboo in the Gore culture. water could pass through. we were taking off—and then this.” Peter and a number of his associates in the next few months made a number of those below-the-waterline decisions. a few complaints were heard. We were really starting to attract attention. computer expert. who led Gore’s fabric division.” All of the products were recalled. This leader is perceived by the team membership as having a good grasp of how the objectives of the team fit in with the broad objective of the enterprise. or anywhere else in the pipeline. c. First. The replacement program cost Gore roughly $4 million. This kind of leader gives the team guidance in a special area. Anything that was in store.
the problem was chronic absenteeism and in the other the individual was caught stealing. If you can’t handle it.” As Anita McBride. and climate appeal. an associate in Phoenix. “It’s an unhappy situation. “When that happens. Intrapreneuring associates who organize new teams for new businesses. In one case. there were adjustment problems. Land cost was never a primary consideration. was being pressed by some outsiders as to what her title was. f.” The location of the plant was also no accident. This is the basic discipline of our lattice organization. you’ve got to go. he loved it and recounted the story to others. The lunchroom in each new plant was designed to be a focal point for employee interaction. If there is no contribution.” said Bill Gore. Functional leaders who help coordinate activities of people in a “functional” area. What you’re seeing looks like utopia. a nearby university. If you finally figure the system.” Not all people functioned well under such a system. j. “Expanding is not costly in the long run. nor are they “parents” to whom we transfer our own self-responsibility. The situation that leaders are frequently also sponsors should not confuse that these are different activities and responsibilities. “We can get damned authoritarian when we have to. Our actions result in contributions. For those accustomed to a more structured work environment. Sites were selected based on transportation access. Corporate leaders who help coordinate activities of people in different businesses and functions and who try to promote communication and cooperation among all associates. new products. “The design is no accident. an associate at the Flagstaff facility. The parking lot did not have any reserved parking spaces except for customers and the handicapped. beautiful surroundings. and yes we do have turnover. adapted quickly. Probably by your own choice. Leaders are not authoritarians. all hell breaks loose. It’s the new associate’s responsibility to find out what he or she can do for the good of the operation. The lunchroom in Flagstaff has a fireplace in the middle. “It’s not for everybody. These leaders invite other associates to “sign up” for their project. Many other aspects were arranged along egalitarian lines. For those who required more structured working conditions and could not adapt. especially initially. there is no paycheck. new processes. because you’re going to be so frustrated. We want people to like to be here. new or better methods of all kinds.” in Bill’s own words. Our pay depends on the magnitude of our contributions. Gore’s flexible workplace was not for them. McCarter justified the selection by stating. to the success of our enterprise. These leaders are usually called product specialists. They are respected for their knowledge and dedication to their products. new devices. or supervisors who tell us what to do or forbid us doing things. an associate “is trying to be unfair. As Dave McCarter of Phoenix explained. Plant leaders who help coordinate activities of people within a plant. There was only one area in each plant in which to eat. 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. People ask me do we have turnover. However. Sarah Clifton. after some initial floundering. but it also looks extreme.” 8 . She made one up and had it printed on business cards—SUPREME COMMANDER.commitments regarding the product type. it can be real exciting. said. In rare cases. i. they do often advise us of the consequences of actions we have done or propose to do. As Bill Gore said. Business leaders who help coordinate activities of people in a business. or lack of contribution. “All our lives most of us have been told what to do.” The vast majority of the new associates. According to Bill. managers of people. When Bill Gore learned what she did. g. new marketing efforts. both for the associate and the sponsor. for those few. It is clear that leadership is widespread in our lattice organization and that it is continually changing and evolving. The loss of money is what you make happen by stymying people into a box.” Associates had also encountered criticism from outsiders who had problems with the idea of no titles. h.
Most were technical and engineering focused because of the type of organization W.2 Entry-level salary was in the middle of the range for comparable jobs. None of the plants had been organized to date. Gore. The emphasis in employee development. L. Besides salaries. Before meeting with the compensation committee. Gore & Associates took three forms—salary. Gore “will work with associates who want to advance themselves. known as a silly worm. The company neither tried to dissuade an associate from attending an organizational meeting nor retaliated when fliers were passed out. was that the associate must take the initiative. the firm bought company stock equivalent to 15 percent of the associates’ annual income and placed it in an (ASOP) retirement fund. “We do not feel we need to be the highest paid. The principle of commitment was seen as a two-way street. Gore simply does not use the word employee in any of its documentation. In addition. the wire and cable division was facing increased competition. Research and Development Research and development.” Overall. “I figures out that if we ever could unfold those molecules. W. Gore & Associates tried to avoid layoffs. The result 2 Gore’s ASOP is similar legally to an ESOP (Employee Stock Option Plan). Compensation Compensation at W. Instead of cutting pay. The best way to understand how research and development worked was to see how inventiveness had previously occurred at Gore. L. Bill Gore believed all people had it within themselves to be creative. the company had used a system of temporary transfers within a plant or cluster of plants and voluntary layoffs. The sponsors for all associates acted as their advocate during this review process. get them to stretch out straight. said W. In addition. Yet the company held over 150 patents. L. were unstructured. as in many parts of W. an associate in Newark. Bill believed no need existed for third-party representation under the lattice structure. with which to experiment. According to Sally Gore. air could be introduced into its molecular structure. Bill wanted every associate to feel they were the owners. the company had cooperative programs with associates to obtain training through universities and other outside providers in which Gore picked up most of the educational costs for the associates. As he said. L. 9 . Bill estimated the year before he died that. Gore was. The reviews were conducted by a compensation team for most workers in the facility in which they work. L. W. Any associate could ask for a piece of raw PTFE. “Why would associates join a union when they own the company? It seems rather absurd. “The profit per associate is double” that of Du Pont. Thus. daughter-in-law of the founder. We want them to come here because of the opportunities for growth and the unique work environment. L. the sponsor checked with customers or whoever used the results of the person’s work to find out what contribution had been made. In addition. we’d have a tremendous new kind of material. although most inventions were held as proprietary or trade secrets. but the company also offered inhouse programs in leadership development. bonus. Bill Gore began to look for a way to straighten out the PTFE molecules. By 1979. the associates appeared to have responded positively to the Gore system of unmanagement and unstructure. We never try to steal people away from other companies with salary.” Associates were offered many in-house training opportunities. and an Associates’ Stock Option Program (ASOP).” He thought that if PTFE could be stretched. He asked the question.Over the years. The bonus consisted of 15 percent of the company’s profits distributed among all associates twice a year. Gore had a bonus and ASOP profit-sharing plan for all associates. an associate became a stockholder after being at Gore for one year. which was seen at Gore as disastrous to morale. Associate Development Ron Hill. There was no formal research and development department. the evaluation team considered the associate’s leadership ability and willingness to help others to develop to their fullest.” Associates’ salaries were reviewed at least once a year and more commonly twice a year. like everything else at Gore. Gore & Associates faced a number of unionization drives. Each attempt was unsuccessful.
What do I do now?’ I told him to get together with Pete Cooper in our Flagstaff plant. Without a product champion you can’t do much anyway. Our marketing and our salespeople make their own commitments as to what their forecasts are. If you get a person interested in a particular market or a particular product for the marketplace. So I told him about its properties. He grabbed another rod and said. the number of patent applications and innovative products is triple” that of Du Pont. Naturally. at a plant in Newark. The hail tore holes in the top of the tent. Every associate was encouraged to think. ‘Well give it to me. ‘What do you use it for?’ ‘Got no idea. an associate with a third-grade education. “We have no quota system. Many other associates had contributed their ideas through both product and process breakthroughs. As Bill Gore told the story. The year before he died. so it could withstand hail. Vieve made a handsewn tent out of patches of Gore-Tex. As Bill Gore recalled. Then he pretended to get made. Again according to McCarter. Bob.’ he said. The operating procedures used to implement the strategy followed the same principles as other functions at Gore. Even without a research and development department. ‘and I’ll try it in a vascular graft on a pig. or whatever somebody feels is necessary. To his surprise. For example. ‘Oh the hell with this. he called me up. There is no person sitting around telling them that that is not high enough. fabricating costs would be reduced and the profit margins would be increased. then there is no stopping them. And that’s the key element within our company. it broke. the Gores heated rods of PTFE to various temperatures and then slowly stretched them. The design was done over a weekend. a machine that wrapped thousands of yards of wire a day was designed by Fred L. “Bob wanted to surprise me so he took a rod and stretched it slowly. the rods broke. The very first night in the wilderness. ‘What is that stuff?’ Ben asked.’ he said ‘I put it in a pig and it works. Working alone late one night in 1969 after countless failures.” Second.” The new arrangement of molecules changed not only the wire and cable division. a product champion was responsible for marketing the product through commitments with sales representatives. Regardless of the temperature or how carefully they stretched them. Delaware. but also led to the development of Gore-Tex and what is now the largest division at Gore plus a host of other products. It didn’t break—he’d done it.’ and gave it a pull. and that Gore could become a leader in that area of expertise. He tried it again and again with the same results. they encountered a hail storm. Bob demonstrated his breakthrough to his father. and follow a potentially profitable idea to its conclusion. ‘Bill. Bill was skiing with his friend Dr. experiment. According to Dave McCarter. Thus.’ Two weeks later. Marketing Strategy Gore’s marketing strategy was based on making the determination that it could offer the best valued products to a marketplace. You 10 . “We were just to start a run when I absentmindedly pulled a small tubular section of Gore-Tex out of my pocket and looked at it. We just needed to make it stronger.would be greater volume per pound of raw material without affecting performance. First. “The creativity. and let them figure it out. but the bottom filled up like a bathtub from the rain. that people in that marketplace appreciated what it manufactured. Bill Gore claimed. ‘Feels great. Ben Eiseman of the Denver General Hospital. They took it on their annual camping trip to the Wind River Mountains in Wyoming.” Now hundreds of thousands of people throughout the world walk around with Gore-Tex vascular grafts. in frustration.’ I said. it did not break. the marketing of a product revolved around a leader who was referred to as a product champion. Eldreth. Going about this search in a scientific manner with his son Bob.’ he said.” The second largest division began on the ski slopes of Colorado. innovations and creativity worked very well at Gore & Associates. so it is individually driven. “You marry your technology with the interests of your champions as you’ve got to have champions for all these things no matter what. “At least we knew from all the water that the tent was waterproof. The next morning. yanked at one of the rods violently. you have to increase it by 10 percent. Ben was pretty excited. Initial field-testing of Gore-Tex was conducted by Bill and Vieve in the summer of 1970. As Bill Gore stated. but not without some drama.
. 11 . . The thing that triggered me was the fact that he said he sold insurance and here is a guy with a high degree of technical background selling insurance. . You can bury it in the ground and in a matter of seconds it could detect a hydrocarbon (gasoline. He said. So. . Timberland. . Gore had been very successful using its marketing strategies to secure a market leadership position in a number of areas ranging from waterproof outdoor clothing to vascular grafts. If you think about it. They were not on commission. . Do you have something around here I can do?” I was thinking to myself.” So he did. After 25 years. big-time monetary. but nobody is going to tell you to change it. Cooperative advertising was especially used to promote Gore-Tex fabric products. It certainly is a valuable one too for the environment. and Michelle Jaffe. etc. In other words. Well.” Third. . “In the technical end of the business. I sat reading the application. Gore relied on cooperative and world-of-mouth advertising. this strategy was paying off. I like to play golf. you can have warm. With this handsome collection of gloves . . So the bell went off in my head that we were trying to introduce a new product into the marketplace that was a hydrocarbon leak protection cable. company reputation probably is most important. As in other areas of Gore. Certainly a champion of the product. They participated in the profit sharing and ASOP plans in which all other associates participated.). this is one of these guys I would sure like to hire. dry hands without sacrificing style. including Apparel Technologies. a company’s products would not be considered seriously by many industrial customers. In the implementation of its marketing strategy. Richard Zuckerwar. . Ran with it single-handed. his technical background interested me. . There is no order of command. . Austin Reed. Gore engaged in cooperative advertising because the associates believed positive experiences with any one product would carry over to purchases of other and more Gore-Tex fabric products. Lands’ End. I didn’t even know why I was interviewing him actually. . the individual success stories came from diverse backgrounds. He had marketing experience. why should you protect your tanks? It’s an insurance policy that things are not leaking into the environment. We were having a hard time finding a customer. but I just can’t do it every day so I want to do something else. I had a couple of other guys working on it who hadn’t been very successful with marketing it. . but I don’t know what I would do with him. He played golf a few months and got tired of that. These are groups of independent people who come together to make unified commitments to do something and sometimes when they can’t make those agreements . He had managed an engineering department with 600 people. which is your forecast. international marketing experience. Woolrich. “I’m retired. Sam was retired from AT&T. he went to work. I thought that kind of a product would be like selling insurance. he picked right up on it. which were sold through a number of clothing manufacturers and distributors. That has implications. Grandoe. .are expected to meet your commitment. . . I said. said about his company’s introduction of Gore-Tex gloves. He was selling life insurance. Apparently. a very energetic guy. You have to have a good reputation with your company. McCarter related one of these success stories as follows: I interviewed Sam one day. “Sports activists have had the benefit of Gore-Tex gloves to protect their hands from the elements. no chain involved. president of the Grandoe Corporation. the sale was often made before the representative called. he took the golden parachute and went down to Sun Lakes to play golf. you may pass up a marketplace. . . the sales representatives were on salary. North Face. He’d managed manufacturing plants for AT&T and had a great wealth of experience at AT&T.” He went on to say that without a good reputation. Now it’s a growing business. . According to McCarter. We hired him. “Why don’t you come back Monday? I have just the thing for you. but that’s OK because there’s much more advantage when the team decides to do something.” The power of informal marketing techniques extended beyond consumer products. actually.
p. March 1985. July 1986. 14–19. 1983. 12 . “Firm Thrives without Boss. August 1982. Franlesca.” Forbes. Posner. 1985. McKendrick.” Management Review. “The First Day on the Job. Rhodes. p. W. In addition. 1983.” Inc.” Forbes. L. “Dry and Cool.” Industry Week. “No Bosses. 34. 1984. “Give Them Stormy Weather.” Forbes.” Business Week.” The New York Times Magazine. 16–17. Trachtenberg. Alex. 1986. 1985. “The Gorey Details. pp.” Inc. Simmons. May 9. who spent hours with us sharing her personal experiences as well as providing many resources including internal documents and videotapes. 6. February 2. Reinventing the Corporation. Milne. March 24. pp. A. J. pp. We especially appreciate the input received from Anita McBride. Angrist. “Classless Capitalists. 1990. pp. pp.Acknowledgments A number of sources were especially helpful in providing background material for this case. “People Managing Themselves: Un-Management at W. J.. August 27. 98.. pp. and John Nasbitt. Gore associates who generously shared their time and viewpoints about the company. Weber. Hoerr. L. Patricia. April 15. Joseph. June 1986. G. Gore Inc. Gore. “The Un-Manager. 12–13. October 17. New York: Warner Books. “Wilbert L. “The Future Workplace. 1985. Joseph. p. sec. Trish Hearn and Dave McCarter also added much to this case through sharing their personal experiences as well as ensuring that the case accurately reflected the Gore company and culture.” Journal for Quality and Participation. Ward. The most important sources were the W. 73–75. “A Company Where Everybody Is the Boss. 126. J. 48–49. M. December 10. Lucien. Kathy. December 1987. 123–24.” Management World. November 10. J. Levering. B.” Management Review. 196–97. 1986. References Aburdene. The 100 Best Companies to Work for in America. Robert. January 1985.” AZ Republic. pp. “An All-Weather Idea. And Even ‘Leaders’ Can’t Give Orders. “The Employees as Entrepreneur.” Business Week. pp. Price. S. 22–23. pp. L. 172–74.
L. As in many organizations. Bill Gore tried to persuade DuPont to make the new product—PTFE-coated ribbon cable. Radical may be one word to describe Gore’s structure and style. including its best-known product GoreTex fabric. became president. Gore’s management practices to the concepts and principles discussed in Chapters 9. the early experiences and business philosophy of the founder are ingrained in the company’s operations and culture. Bob. Bill’s wife remains as secretary-treasurer. Bill and his son. Gore & Associates.L. to motivating people to take responsibility and exhibit entrepreneurial behavior. SUGGESTIONS FOR USING THE CASE The Gore case is a good follow-on to your lectures on strategy implementation. Gore’s experiences personally.L.L. There is sufficient information in the case to generate good discussion about key implementation issues including exercising strategic leadership. Since 1958. DuPont de Nemours in 1945 where he worked on a team to develop applications for polytetrafluoroethylene. The case also can be used early in the course as an example of the manager as chief strategy-maker and chief strategy-implementer. What makes the case fascinating is the company’s unique approach to organization. The key issue is can this radically managed and structured corporation stand the tests of time and growth? This company has gone from a small entrepreneurial firm to a large multinational corporation while maintaining its original operating principles and close-knit family business philosophy. GORE & ASSOCIATES. management. successfully made a PTFE-coated ribbon cable in his home basement laboratory. Another is informal. The people at Gore insist on not using words such as managers. The basement of their home served as the first facility. Gore joined E. we predict. While on this team. INC. Wilbert Gore (called Bill “by everyone”) became knowledgeable about the development of computers and transistors and felt that PTFE had the ideal insulating characteristics for use with such equipment. Bob. W. the only other officer. W. will really like this 13 . The company is privately-owned. On January 1. In 1968. their twenty-third wedding anniversary.000 from savings against the advice of their friends. frequently referred to as PTFE in the scientific community and as “Teflon” by DuPont’s consumers. and to continuous innovation and new product development. It is a company that evolved from the late Wilbert L. they founded W.I. and 11. Gore & Associates case is about a highly successful. The radical steps the founder of the firm took to create a unique corporate culture have worked successfully to the present. Gore makes a wide range of products organized into four divisions—electronic. The company’s energy and ability to grow is continuously being renewed and invigorated by the emphasis on new products and by the company’s unique and informal managerial practices (described by some as “unmanagement”). they mortgaged their house and took $4. to people management. organizationally. The company has enjoyed spectacular growth and become a billion-dollar company on the strength of its ability to develop new products primarily derived from PTFE . After numerous attempts. Students. students have to ponder and analyze whether the culture can sustain itself and the company can continue to be managed in the same informal.TEACHING NOTE FOR CLASSIC CASE 6 W. fabrics. Bill Gore died while backpacking in the Wind River Mountains in Wyoming. Yet. things happen fast at Gore and success is evident everywhere. and employees. Gore & Associates has become a modern-day success story as a uniquely-managed family business. shaping the corporate culture. Gore & Associates is best known for its Gore-Tex fabric coating that make fabrics simultaneously waterproof and ventilated (breathable). medical. 10. The case is full of opportunities to link W. Bill began to discuss with his wife the possibility of starting their own insulated wire and cable business. to defining jobs. a position he continues to occupy. His son.L. 1958. unconventional manner. and technically.L. Consequently. After some preliminary discussions. large company that has an organic organizational structure and unconventional management style. To finance the first two years of the business. The W. and creating a strategy-supportive organization structure. it became clear that DuPont wanted to remain a supplier of raw materials and not a fabricator. W.L. and industrial products.
the lattice structure. What impresses you about this company? Is it well-managed? Why or why not? Does the management style at Gore match what we in the business school have taught you about “how to manage?” How successful was Bill Gore in defining the business. What impresses you about this company? Is it well-managed? Why or why not? This is a good opening questions because you get an immediate feel for what students think about the company and how it is managed. The company’s impressive track record of growth and. the four guiding principles undergirding the corporate culture.L.300 associates). and crafting a strategy to achieve performance objectives? W. very good profitability. Gore & Associates positioned in the industry? What pitfalls to success must Gore avoid? Can Gore’s management style and culture stand the tests of time and growth? Will the same operating principles and philosophy that sustained the company as a small entrepreneurial firm lead to additional successes as a large multinational corporation? 15. 5. the company is churning out new products and developing new end-uses for existing technology. 18. personal atmosphere. Then you can delve into specifics—the way the company is managed. 19. The company’s overall approach to people management—the sponsor program. the business philosophy and values. yet it works and in a big company (44 plants. The following items are strong candidates for being included: • The company operates quite successfully without all the usual trappings—a mission. formal job descriptions. and so on. The lesson students will learn from this case is that the management of the strategy implementation/execution process makes a huge difference in the company’s ultimate success. 16. giving people lots of responsibility). where the emphasis and learning comes from understanding “what’s good about the company” rather than “what’s bad. developing a strategic vision. Many students. a code of ethics. One of our favorite ways to open the class discussion of a case like Gore. Unmanagement prevails. and the seemingly generous compensation plan. particularly the manner in which it is managed. Despite no formal R&D program. of course. ASSIGNMENT QUESTIONS 14. and executive leadership. the emphasis on the personal growth and development of associates. Gore & Associates attributes much of its success to its associates and the corporate culture. small business units. incentives and rewards.L. giving people lots of responsibility and decision-making discretion. Despite the company’s unconventional management practices. very effective.” is to lead off with the question “what do you find that is impressive about the company?” We like to make a list of the impressive features on the board. 17. The company’s business strategy is fairly clear-cut.L. the emphasis on leadership rather than management. one suspects. Gore? In what ways has the culture contributed to the success of the company? Is Gore’s organizational structure a strength or a weakness? How well is W. What key traits define the corporate culture and W. will be familiar with Gore-Tex products. a group of vice presidents and corporate officers. • • • • 14 . key policies and procedures. decentralized decision-making. the fact remains that its management approaches have proved very. the corporate culture. TEACHING OUTLINE AND ANALYSIS 20.company. What’s interesting here is how the strategy has been implemented and executed over the years. The company has managed to grow and get big by utilizing the principles of small-scale organization (close knit.
and no titles. There were no status differentials between “associates” at Gore—no reserved parking slots except for customers and handicapped. He declared that no plant would have more than 200 employees. 22. the emphasis on intrapreneurship. He defined the business broadly as a company that manufactured products primarily derived from PTFE to meet the needs of any performance and value conscious users. The corporate culture revolved around a number of key traits: • • • • • the four guiding principles—fairness. no lengthy policy manuals. There was no “we/they” atmosphere between management and employees such as characterize many organizations. The two are for all purposes inseparable. no separate compensation systems. How successful was Bill Gore in defining the business. high-value products that people would appreciate—was clear to all W. Students should see that Bill Gore’s management style was visionary. 15 . Gore’s corporate structure. It emerged from a process of trial and error. Bill took some radical steps to ensure that Gore would not be like other companies.L.” plant leaders.” high-performance. and “guidance” leaders— none of whom had formal authority. the role of leadership. the sponsor program. Gore & Associates attributes much of its success to its associates and corporate culture. the whole concept of associates). and the unconventional “unmanagement” style fosters an interesting corporate culture. the lattice structure (few layers of management. Gore associates. A compensation system based on contribution and fairness was established under his leadership. and discretion. pushed down to those managers charged with making Gore-invented products a market success. Several questions can be posed to pursue this point: • • • • Does the culture fit Gore’s strategy? How does Gore’s corporate culture contribute to successful strategy implementation? What is there about the culture that has resulted in better strategy execution? In what ways is Gore’s corporate culture strategy-supportive? Personnel practices at Gore were especially strategy-supportive. W. functional leaders. and crafting a strategy to achieve performance objectives? 21.L.• This seems like a great company to work for—it’s innovative. Equality was practiced from the parking lot to the offices.L. and the stress placed on individual growth and development. Gore’s culture is not for everyone. Strategic decisions were decentralized—that is. no separate dining facilities. business leaders. In addition. The culture appeals to people who operate well in an unstructured environment and who are self-starters. the work climate is supportive of individual initiative. However. Bill Gore created the culture and Bob Gore is now perpetuating and nurturing it. Once the class has drawn out the defining traits of W. the decentralization of decision-making. that the mission of the company— providing “hi-tech. The outcome was an unstructured. developing a strategic vision. freedom. So. clear job descriptions. commitment. all employees were given a variety of ways to participate and contribute to the organization. and policy manuals won’t like Gore’s culture and won’t function well in it. Bill Gore did not actually craft a strategy. He avoided the use of job titles from the company’s inception. results-oriented organization structure predicated on fairness and contribution to strategic performance. no plush offices for the elite. no organizational charts. What are the key traits of the corporate culture? In what ways has the culture contributed to success of the company? The primary influence on Gore employees appears to be the organization’s leaders and culture. then you can ask the class how and why the culture has contributed to Gore’s success. aided by “Intrapreneuring associates. more top-down direction. People who like more structure.
In the industrial market. and problems were tackled by people who had the skill to lead others. The Gores (Bill and Bob) believed that leaders should communicate a direction for an organization that others accept. create new products or production processes. and ability to see what needed to be done. Gore’s policy of giving associates formal feedback at least twice a year on their performance and rewarding them accordingly. enormously influenced the performance of the employees of the organization and created a very strategic-supportive work environment. The combination of a variety of ways to perform. Gore also has a reputation for being the first to market with innovative products. 24. Gore’s mass marketing efforts were limited. twice before with early versions of the fabric and vascular grafts this almost proved to be disastrous. On the other hand. not managers. and for individual initiative. This is both a strength and a potential weakness. people following a participative. financial exposure was minimized. not bureaucratic procedures. products with Gore-Tex fabric in them were well-known to consumers in those markets. projects. join teams.L. and an Associates’ Stock Ownership Program (ASOP). but no other significant penalties were incurred. The only limit on Gore associates in implementing and executing strategic moves was their own initiative. Associates are encouraged to make commitments. another of Gore’s strengths is its emphasis on product development. motivation and long-term performance are in jeopardy. and marketing costs. They pitched in to help an associate who was struggling. The sponsorship program established by Bill Gore was largely responsible for sustaining this culture. employees have a number of ways to contribute and a number of ways to be compensated for their contributions. The lack of formal authority may be seen by some as conducive to lack of accountability and tight organization control. Moreover. The primary strength of the organizational structure is its encouragement of individual initiative. Some students will cite as strengths the direct lines of communication. and tasks and functions organized through commitments rather than pre-established work schedules.L. To recognize and reward associates’ achievements. consensus-building leader could perform for indefinite periods of time at levels that authoritarian organizations rarely approach. How well is W. the success of Gore’s structure depends on a highly motivated workforce and strong leadership. Both products failed and could have caused Gore heavy legal. both for their quality and status symbols. One facet of its product development is extensions. and to be recognized and rewarded for that performance. Gore & Associates positioned in the industry? What pitfalls to success must Gore avoid? In addition to its leadership and corporate culture. Being innovative and first to market allows Gore to grab the early lead in the market. Gore relied on cooperative advertising and word-of-mouth. employees would not stand and watch another colleague/associate struggle. Associates who weren’t performing were formally given feedback within six months or less that their performance was unacceptable. In their view. In the outdoor sports apparel market these tactics had been very successful. All managers were exhorted to display strong leadership. Another facet is developing totally new products such as the hydrocarbon leak cable. The Gore reputation for quality and functional products appealed to customers in this market as well. As a supplier to final product manufacturers. Gore compensates everyone through six-month salary reviews. associates got informal feedback through their sponsors on a continuous basis. lack of assigned authority. or not perform. 23. as one would expect of a components manufacturer. yet authoritarian decisions were discouraged. Is Gore’s organizational structure a strength or weakness? Students can build a case for either one. Bringing to market a product without thorough testing when that product might have potentially life threatening failures is a risk that Gore or any company can ill afford. tasks. Furthermore. profit sharing. objectives set by those responsible. financial.Strategy implementation was also enhanced by W. Because of the speed and manner in which Gore responded. In his view. make suggestions. skills. As a result. Gore did spend over $4 million dollars to satisfy early purchasers of its fabric. such as marketing Gore-Tex fabric to makers of fashionable outerwear as well as its traditional market. plus the strong support for individual leadership at Gore. some students could view these same characteristics as weaknesses. Unfortunately. Thus. Gore’s sales force appears to have represented its products well. Bill Gore emphasized the company’s need for leaders. makers of outdoor and athletic oriented apparel. 16 . The emphasis on individual exercise of leadership was also very strategy-supportive. Absent forceful personal leadership. the structure resided with the leaders and not vice versa. and in general to improve on how things are being done. In addition.
This strategy has worked so far.” whether protected by patents or as proprietary information. In addition. and individual responsibility may well work to the company’s advantage since it has long since ceased to be dependent on the actions and talents of a single CEO. It is experiencing more competition now than in the past. but the over-dependence on a single raw material calls for extreme vigilance for any possible threats to the company’s competitiveness. A second vulnerability is the company’s dependence on a single basic material. First. as well as various forms of industrial espionage. or if the product or the production process was found to be environmentally unsafe. Gore must be a company that generates a large amount of cash to pay for the necessary expansion. While we can conclude “so far. Gore’s financial management is very conservative. an unwillingness to finance corporate expansion. The point is that trade “secrets. its associates. Bob Gore has a challenge to sustain the culture and abide by the principles his father espoused.” only time will tell whether the culture Bill Gore created can be sustained. but trying to develop products to match a highly successful product such as Gore-Tex is difficult at best. 17 . Given its growth rate. Gore will have to defend its market share. proprietary information can be obtained through backwards engineering (i.e. Other companies such as IBM have had real difficulty trying to sustain their cultures in a period of slow growth and/or market reversals accompanied with organizational downsizing. One potential vulnerability is Gore’s dependency on patents and proprietary information. The case provides few clues as to Bob Gore’s executive and leadership skills. If for any reason the raw material required to make this material became expensive. have limited life spans. In this regard.Both of these failures occurred in the 1970’s. At present. individual leadership. It is too early to see what effect this new competition may have on Gore. Patents expire or can be designed around. however. its strong capital structure allows Gore the freedom to pursue opportunities without having to check with creditors. The conservative financial policy. Several other breathable but windproof and waterproof membranes have been developed. Every company’s culture has to be constantly nurtured and renewed. PTFE. Can Gore’s management style and culture stand the tests of time and growth? Will the same operating principles and philosophy that sustained the company as a small entrepreneurial firm lead to additional successes as a large multinational corporation? Gore’s culture evolved and has been sustained during a period of corporate growth. The company’s comparatively small number of employees and the emphasis on individual action. figuring out how the product was made). including plant and equipment. for manufacturing a high percentage of its products. the company’s unmanagement style may prove a valuable culture-sustaining strength. EPILOGUE Gore continues to be a highly successful company. which may indicate that product testing has since become more thorough. When Gore’s patents expire or competitors learn its proprietary information. There is a very limited amount of financial information available on Gore. limits growth to what can be internally financed. the company will face competition. the very essence of the company—its culture. It uses no debt and does not share much financial information with outsiders. None of these appear to have a high degree of probability. 25. has some drawbacks. Gore’s current strategy is to keep developing more patents and proprietary secrets and churn out a continuous stream of new products and product applications. There is great concern that as the company grows. or if a low-cost substitute became available. The company has not had to try to sustain its culture through a period of slow demand for its products and/or market reversals. Gore would be in deep trouble. This low debt structure reduces its exposure to fluctuating interest rates. especially with Gore-Tex fabrics. High profit margin items such as those Gore manufactures always attract competition. through debt. and its management style/structure—will start to crack and/or lose its vitality. Sooner or later. this does not appear to be a problem at Gore. but the policy does prevent Gore from being as opportunistic as it might be. so good.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.