Confirming Pages different languages, and live in quite different cultures. The diversity among team members, combined with the companys emphasis on growth and globalized operations, presented significant challenges for W. L. Gore as it strove to maintain a family-like, entrepreneurial culture. According to Terri Kelly, the president of Gore and a 25-year associate: 2 In the early days, our business was largely conducted at the local level. There were global operations, but most relationships were built regionally, and most decisions were made regionally.
That picture has evolved dramatically over the last 20 ears, as businesses can no longer be defined by brick and mortar. Today, most of our teams are spread across regions and continents. Therefore, the decision-making process is much more global and virtual in nature, and there’s a growing need to build strong relationships across geographical boundaries. The globalization of our business has been one of the biggest changes IVe seen in the last 25 years.
Elements of the culture at Gore are captured in Exhibit 1 . The core belief in the need to take the long-term view in business situations, and to make and keep commitments, drove cooperation mong individuals and small teams. This was supported by key practices that replaced traditional, hierarchical structure with flexible relationships and a sense that all workers were in the same boat. In 2010, W. L. Gore & Associates celebrated its 52nd year in business.
Founded in 1958 by Bill and Vieve Gore in the basement of their home, Gore had grown into a global enterprise famous for its high performance fabrics, medical products, and next-generation electronic products, as well as its use of self-empowered teams of employees (called associates at Gore). In its earlier years, the company had endeavored to restrict he size of its different corporate facilities to 200 associates or fewer, a practice that helped keep the number and facilitated cross-team coordination.
More recently, however, to better cope with the challenges of a global marketplace, increasing numbers of teams were composed of associates in different facilities, sometimes facilities that were spread across three continents; the coordination of team members working in different facilities was enabled by online communication. In 2010, Gore’s products were sold on six continents and used on all seven continents, as well as under the ocean and in space. The company global operations required teams of associates to tightly coordinate their activities in developing, producing, and marketing products to customers across the world.
Currently teams were organized primarily along product lines, with only a few teams consisting of members working in the same Gore facility. As a consequence, it was common for team members to be separated by thousands of miles, work in multiple time zones, speak Frank Shipper Salisbury University Charles C. Manz University of Massachusetts-Amherst Greg L. Stewart University of Iowa CASE 26 W. L. Gore & Associates: Developing Global Teams o Meet 21st-Century Challenges 1 Copyright 2010 by the case authors. All rights reserved. th012729 case26 C391-C405. ndd C-391 14/12/10 3:01 PM C-392 Part 2 Cases in Crafting and Executing Strategy The four principles were referred to as fairness, freedom, commitment, and waterline. The waterline principle was drawn from an analogy to ships. If someone poked a hole in a boat above the waterline, the boat would be in relatively little real danger. If, however, someone poked a hole below the waterline, the boat would be in immediate danger of sinking. The expectation was that “waterline” issues would be discussed across efore any decisions about them were made.
Gore still emphasized this principle even though team members who needed to share in the decisionmaking process were now spread across the globe. Commitment was spoken of frequently at Gore. The commitment principle’s primary emphasis was on the freedom associates had to make their own commitments, rather than having The ultimate focus was on empowering talented associates to deliver highly innovative products. Despite substantial growth, the core values had not changed at Gore. The objective of the company set forth by the founder Wilbert L. (Bill)
Gore, “To make money and have fun,” was still part of the Gore culture. Associates around the world were asked to follow the company’s four guiding principles: 1. Try to be fair. 2. Encourage, help, and allow other associates to grow in knowledge, skill, and scope of activity and responsibility. 3. Make your own commitments, and keep them. 4. Consult with other associates before taking actions that may be “below the waterline. ” Exhibit 1 W. L. Gore & Associates’ Culture Key Disciplines IP Protection Core Technology Commitment Investments, Not Expenses Product Concept Statements Sponsorship Value Pricing
Knowledge-Based Decision-Making Practices Profit Sharing Ownership through “ASOP” Contribution/ Compensation Cluster Concept Three-Legged Stool Commitments, Not Titles Culture Survey Core Values Innovation and Creativity High Ethics and Integrity Direct One-to-One Communication Lattice Deep Knowledge Natural Leadership Personal Realtionships Built on Trust Fitness for Use Compensation Based on Contribution Early Influences MasloWs Hierarchy of Needs McGregor’s Theory X vs. Y DuPont Task Force Creating an Enterprise The Gore Culture “The objective of the Enterprise is to make money and have fun doing so. Bill Gore What We Believe Belief in the individual Power of small teams All in the same boat Long-term view External Influences Customers Economic Climate Local Cultures Globalization Government Technology Competition Labor Market Environment Guiding Principles Freedom Fairness Waterline GORE and designs are trademarks of W. L. Gore & Associates, Inc. All rights reserved. 2008 W. L. Gore & Associates, Inc. Printed in USA. Creative Technologies Worldwide th012729 case26 C391-C405. tndd C-392 14/12/10 3:01 PM Case 26 W. L.
Gore & Associates: Developing Global Teams to Meet 21st-Century Challenges C-393 engineering in 1933 and a master of science in physical chemistry in 1935. He began his professional career at American Smelting and Refining in 1936; moved to Remington Arms, a DuPont subsidiary, in 1941; and then moved to DuPont’s headquarters in 1945. He held positions as research supervisor and head of operations research. While at DuPont, he felt a sense of excited commitment, personal fulfillment, and self-direction while working with a task force to develop applications for PTFE.
Having followed the development of the electronics industry, he felt that PTFE had ideal nsulating characteristics for use with such equipment. He tried many ways to make a PTFEcoated ribbon cable, but with no success until a breakthrough in his home basement laboratory. One night, while Bill was explaining the problem to his 19-year-old son, Bob, the young Gore saw some PTFE sealant tape and asked his father, “Why don’t you try this tape? ” Bill explained that everyone knew that you could not bond PTFE to itself.
After Bob went to bed, however, Bill remained in the basement lab and proceeded to try what conventional wisdom said could not be done. At about 5:00 a. m. , Bill woke up Bob, waving It works, it works. ” The following night father and son returned to the basement lab to make ribbon cable insulated with PTFE. Because the idea came from Bob, the patent for the cable was issued in his name. After a while, Bill Gore came to realize that DuPont wanted to remain a supplier of raw materials for industrial buyers and not a manufacturer of high-tech products for end-use markets.
Bill and Vieve began discussing the possibility of starting their own insulated wire and cable business. On January 1, 1958, their wedding anniversary, they founded W. L. Gore. The basement of their home served as their first facility. After finishing breakfast, Vieve turned to her husband of 23 years and said, “Well, let’s clear up the dishes, go downstairs, and get to work. ” When Bill Gore (a 45-year-old with five children to support) left DuPont, he put aside a career of 17 years and a good, secure salary. To finance the first two years of their new business, he and Vieve mortgaged their house and took $4,000 from savings.
All their friends cautioned them against taking on such a big financial risk. others assign them to projects or tasks. But commitment could also be viewed as a mutual commitment between associates and the enterprise. Associates worldwide committed to making contributions to the companys success. In return, the company was committed to providing a challenging, opportunity-rich work environment that was responsive to associate needs and concerns. BACKGROUND Gore was formed by Wilbert L. (Bill) Gore and his wife, Genevieve (Vieve) Gore, in 1958.
The idea for the business sprang from Bill Gore’s personal, technical, and organizational experiences at E. l. du Pont de Nemours & Co. and, particularly, his involvement in the characterization of a chemical compound with unique properties. The compound, called polytetrafluorethylene (PTFE), had ome to be marketed by DuPont under the Teflon brand name. Gore saw a wide variety of potential when DuPont showed little interest in pursuing most of them directly, he decided to form his own company and start pursuing the concepts himself. Thus, Gore became one of DuPont’s first customers for this new material. Since then, W. L.
Gore & Associates had evolved into a global enterprise, with annual revenues of more than $2. 5 billion, supported by more than 8,500 associates worldwide. This placed Gore at number 180 on Forbes magazine’s 2008 list of the 500 largest private companies in the United States. The enterprise’s unique, and now famous, culture and leadership practices had helped make Gore one of only a select few companies to appear on all of the U. S. “100 Best Companies to Work For” rankings since they were introduced in 1984. Bill Gore was born in Meridian, Idaho, in 1912. By age six, according to his own account, he was an avid hiker in Utah.
Later, at a church camp in 1935, he met Genevieve Walton, his future wife. In their eyes, the marriage was a partnership. He would make breakfast and Vieve, as everyone called her, would make lunch. The partnership lasted a lifetime. Bill Gore attended the University of Utah; e earned a bachelor of science in chemical th012729 case26 C391-C405. tndd C-393 14/12/10 3:01 PM C-394 Part 2 Cases in Crafting and Executing Strategy it. ” The new arrangement of molecules not only changed the Wire and Cable Division but also led to the development of GORE-TEX fabric and many other products.
In 1986, Bill Gore died while backpacking in the Wind River Mountains of Wyoming. Vieve Gore continued to be involved actively in the company and served on the board of directors until her death at 91 in 2005. W. L. Gore had only four presidents in its 50-year history. Bill Gore served as the president rom the enterprise’s founding in 1958 until 1976. At that point, his son Bob became president and CEO. Bob had been an active member of the firm chairman of the board of directors. He served as president until 2000, when Chuck Carroll was selected as the third president. In 2005, Terri Kelly succeeded Carroll.
As with all the presidents after Bill Gore, Kelly was a longtime employee: she had been with Gore for 22 years before becoming president. The Gore family established a unique culture that continued to be an inspiration for associates. For example, Dave Gioconda, a current product specialist, recounted meeting Bob Gore for the irst time??”an experience that reinforced the company’s egalitarian culture: Two weeks after I Joined Gore, I traveled to Phoenix for training…. I told the guy next to me on the plane where I worked, and he said, “l work for Gore, too. ” “No kidding? ” I asked. “Where do you work? He said, “Oh, I work over at the Cherry Hill plant. ” . I spent two and a half hours on this plane having a conversation with this gentleman who described himself as a technologist and shared some of his experiences. As I got out of the plane, I shook his hand and said, “I’m Dave Gioconda, nice to meet you. ” He replied, “Oh, I’m Bob Gore. ” That experience has had a profound influence on the decisions that I make. Due to the leadership of Bill, Vieve, Bob, and many others, W. L. Gore was selected as one of the “100 Best Companies to Work For” in 2009 by Fortune magazine for the 12th consecutive year.
In addition, the company was included in all three 100 Best Companies to Work For in America books (1984, 1985 and 1993). It was one of only a select few companies to appear on all 15 lists. Gore had been selected also as one of the best The first few years were challenging. Some of the young company’s associates accepted stock in he company in lieu of salary. Family members who came to help with the business lived in the home as well. At one point, 11 associates were living and working under one roof. One afternoon, while sifting PTFE powder, Vieve received a call from the City of Denver’s water department.
The about the ribbon cable and asked for the product manager. Vieve explained that he was not in at the moment. (Bill and two other key associates were out of town. ) The caller asked next for the sales manager and then for the president. Vieve explained that “they’ were also not in. The caller finally shouted, “What kind of company is this nyway? ” With a little diplomacy the Gores were eventually able to secure an order from Denver’s water department for around $100,000. This order put the company over the start-up hump and onto a profitable footing. Sales began to take off.
During the decades that followed, W. L. Gore developed a number of new products derived from PTFE, the best known of which was GORE-TEX fabric. The development of GORE-TEX fabric, one of hundreds of new products that followed a key discovery by Bob Gore, was an example of the power of innovation. In 1969, Gore’s Wire and Cable Division was facing increased competition. Bill Gore began to look for a way to expand PTFE: “l fgured out that if we could ever unfold those molecules, get them to stretch out straight, we’d have a tremendous new kind of material. The new PTFE material would have more volume per pound of raw material with no adverse effect on performance. Thus, fabricating costs would be reduced and profit margins increased. Bob Gore took on the project; he heated rods of PTFE to various temperatures and then slowly stretched them. Regardless of the temperature or how carefully he stretched them, the rods broke. Working alone late one night after countless failures, Bob n frustration stretched one of the rods violently. To his surprise, it did not break. He tried it again and again with the same results.
The next morning, Bill Gore recalled, “Bob wanted to surprise me so he took a rod and stretched it slowly. Naturally, it broke. Then he pretended to get mad. He grabbed another rod and said, ‘Oh, the hell with this,’ and gave it a pull. It didn’t break??”he’d done thol C-394 14/12/10 3:01 PM Challenges C-395 The thing I love about Gore is that we have four very diverse divisions. During my time here, IVe noticed that when one or two divisions are down, ou always have one, two or three that are up. I call them cylinders.
Sometimes all four cylinders are working really well; not all the time though. Normally it’s two or three, but that’s the luxury that we have. When one is down??”it’s good to know that another is up. At the end of 2007, all four divisions were performing well. Having four diversified divisions not only protected against swings in any one industry, but it also provided multiple investment opportunities. Entering 2008, Gore was investing in a large number of areas, with the heaviest area of investment in the Medical Products Division.
This was a conscious choice, as these opportunities were Judged to be the largest intersection between Gore’s unique capabilities and some very large, attractive market needs. As Brad Jones, an enterprise leader, said, “All opportunities aren’t created equal, and there’s an awful lot of opportunity that’s screaming for resources in the medical environment. ” At the same time, the leadership at Gore scrutinized large investments so that those in what Brad Jones referred to as “big burn” projects were not made unless there was a reasonable expectation of a payoff. Developing Quality Products by Creating and Protecting Core
The competitive objective of Gore was to use core technology derived from PTFE and ePTFE to create highly differentiated and unique products. In every product line, the goal was not to produce the lowest-cost goods but rather to create the highest-quality goods that met and exceeded the needs of customers. Of course, Gore worked hard to maintain competitive pricing, but the source of competitive advantage was clearly quality and differentiation. Gore was a company built on technological innovations. Leaders at Gore often referred to a threelegged stool to explain how they integrated operations.