Profile: WL Gore
A business that puts its people first.
"I would never have got this job in a normal hierarchical company," says John Housego as I tuck his business card into my wallet. I discover as I glance at it that the unconventionality I've heard so much about is not just surface quirkiness. It's a way of life. In a conventional business, Housego would be called the managing director or CEO, but here at WL Gore, employees - or 'associates' - don't have job titles. His card reads "John Housego - passionate champion".
This is the first of the many potent symbols I encounter that tell of a company that doesn't do things by the book. In fact, if you read one of the best books on the subject- Gary Hamel's 'The Future of Management' - you'll find an essay full of insights into what the author calls Gore's "contrarian thinking". But, says Hamel, to understand what makes Gore one of the best companies to work for, you have to visit and take a look for yourself. Which is why I have come to the company's headquarters in Livingston, set among the heather-strewn hillsides of Scotland's onetime 'Silicon Glen'.
"I just wouldn't have passed the checklist," continues Housego, referring to why he'd never have got where he is today anywhere else. "I had never led a team before. Elsewhere I'd not have got past the gate. But here it's about individuals and it's about trust. Which is why we have leaders and not bosses."
Gore is a household name for its breathable, wind-resistant, durable fabric that is normally associated with outerwear for the great outdoors. The adjectives used to describe Gore-Tex routinely change as the product develops to meet the specifications of clients such as Berghaus and Sprayway. But there is more to Gore than clothing the Chris Boningtons and Pen Hadows of this world.
Although it may not be immediately obvious to the public, whenever you use cabling, a filter or a gasket, or are fitted with a prosthetic, you could well be in contact with a Gore product. Although Gore tends to avoid tags such as 'core technologies' to describe what it does, it has four main divisions: textiles, electronic, medical and industrial products.
While famous for breathable textiles, in the business world Gore is equally renowned for being one of the best places to work. Gore has repeatedly appeared on the 'Best Companies to Work For' lists both in the United States and in Europe, and has topped the Sunday Times '100 Best Companies to Work For' list
for four years in succession (2004‑07).
This is due largely to the company's unconventional approach to how it is organised. The 'Gore Method' is a management philosophy introduced by the company's founder Wilbert 'Bill' Gore. He created a flat-lattice organisation without the chains of command or predetermined channels of communication that are features of pyramidal management. There are no bosses, but leaders. Associates choose to follow leaders rather than having bosses assigned to them. They commit to projects of their own choice rather than having tasks delegated to them. Performance reviews are based on a peer-level rating system.
To some this may sound like a utopian fantasy, and sceptics of the Gore philosophy talk of 'cults', 'mavericks' and 'Stepford wives'. This is nothing new to Housego, who accepts that the way Gore works "is not for everyone", stressing that, no matter what the critics say, working for Gore is not a charter for freeloading.
"What people don't understand", he says, "is that to have a system where the responsibility is on each individual to contribute is harder than the alternative. There's nowhere to hide here. No one ever says: 'I wonder what that guy does'."
Housego keenly believes that in order to innovate you need both time and trust. This is manifested in the Gore pastime of 'dabbling', where 10 per cent of an associate's time is set aside for project work separate from the day job. At this point I ask Housego if I can develop a new type of camera bag for Gore. I think that he has the materials, the people and the processes to produce a gadget bag better than anything else on the market.
"Sure," he says, before explaining a development philosophy that has resulted in bringing to market products such as long-life guitar strings and breathable bagpipes.
The bagpipe story
Since we're in Scotland I ask about the bagpipes. The story goes that there was a piper working in Gore's filter bags department. By day he'd be working on filter systems and by night he'd play his bagpipes. Before long it dawned on him that the physical properties of the product he was putting together during the day could make a synthetic bag for his pipes. Traditionally, bagpipes have an airtight reservoir bag made from sheepskin or cow leather that allows the instrument to play a continuous note. The problem is that the bag fills up with moisture and becomes a smelly health hazard.
Housego takes up the story: "He recognised that if you added Gore-Tex, it would be breathable and it would be dry. He knocked one up, tried it, and it worked. Then he decided to spend time developing it. He pulled together a team of like-minded people, and now just about every Scottish bagpipe has a Gore-Tex bag in it. That's the result of the passion of a champion who sees something. We have freedom here. Natural freedom: principled freedom to go off and to explore."
The story of the breathable bagpipes is a classic example of creative innovation generated from a culture of trust that allows people to follow their passion. According to Housego, it's all about how you view the people you work with. Do you believe that your colleagues go to work to do a good job, or do you believe that they are "coming here to take your money and do nothing?"
Working at Gore
When Bill Gore set up the company half a century ago he instigated four guiding principles that are valid for all associates: freedom, commitment, fairness and waterline. While the first three are conventional corporate ethos buzzwords, the fourth requires a little clarification.
Ann Gilles is from Gore's Human Resources Group in Livingston. She says: "When somebody has a good idea, he or she can quickly launch a new project. The Waterline Principle serves as a regulating force, comparing the enterprise
with a ship."
What this means in practice is that every associate on board is allowed to innovate, providing the effects of a potential failure do not harm the long-term success or reputation of the company. Projects with uncertain outcomes are compared with drilling holes in the ship's hull - best done above the ship's waterline. Two questions must be answered in the affirmative before a new product can be launched. First, does the project warrant the investment of time and resources? And, second, if all goes wrong, can the company live with the consequences?
Not all projects are successful straight away. Housego says that Gore-Tex didn't happen overnight and, early on, seemed steadfastly to refuse to be profitable.
"Gore-Tex was a product that we believed was going to change people's lives. It's just that people didn't know that they needed it. So we decided we were going to have to teach them the difference between a jacket that's breathable and one that's not. So we developed standards and did lots of testing and we went out to the market and showed them that this really worked."
What if Gore-Tex had failed?
The Gore Method seems to work when products are a big success, but what happens if you hit a bad run of form? I ask Housego to comment on a hypothetical scenario where a leader has worked on a few projects and for some reason has two or three duds in succession.
"You wouldn't necessarily be fired, but there would be discussions. Were they simply bad ideas, and should we have focused on something that we were better able to deliver? Having taken on the commitment, have we actually found out that the person involved is simply not very good at it? Is there a training requirement?"
The ability to filter out good projects seems to be one of the main characteristics of Gore's success, but there is also the retention of staff, with as little as 5 per cent annual turn over, with a significant proportion of associates having been retained for more than a decade.
"Gore is not the place for people driven by status or career path," explains Housego, referring to the company's simple but effective ethos of being in business "to make money and have fun". In order to do this you need associates who buy in to the philosophy, and as Housego says "it's all about buying into" a flat management structure based on respect and valuing the individual skills and strengths of each person.
This is, in Housego's mind, where the Gore Method wins hands down: "The lattice not only makes more sense than the pyramid, but it also shows one fundamental thing, and that is that every individual is respected for his or her contribution however large or small it is. No one is more important than anyone else. Someone may have a broader reach, and his or her decisions may have a larger magnitude of effect on our business and the environment in which we work, but no one is more important than anyone else, because we're all contributing to the common good of the company, because we all own the company."
Gore turns over $2.5bn per year and has more than 8,000 associates worldwide. The company doesn't publicise its trading figures but it is an open secret that it has made a profit each and every year it has been in business. So, at the very least, Bill Gore's dream can't be dismissed as an idealist's utopian fantasy. This is big business and the model works. It follows then that the big question must be why more companies don't get rid of their old school pyramidal thinking and go for the flat lattice management set-up.
Housego answers my question with a polite smile. He's enjoyed watching me battle against my cynicism, play devil's advocate and tie myself up in knots trying to understand a management process that is really very simple indeed. But, I ask as a parting shot, you do accept that most of what you have said today is radically at odds with what the conventional business world outside these doors thinks? "Yeah," says Housego, "don't tell them. They might get better."