You’ve probably bought a garment made of W. L. Gore & Associates’ flagship product, Gore-Tex, a fabric that blocks wind and water, yet is highly breathable thanks to Gore’s patented technology. But you might not know that the company offers a host of other products, from heart patches and synthetic blood vessels to air pollution filters and fuel cells. In fact, W. L. Gore & Associates makes more than 1000 products. Though its financial data are not publicly available, a spokesperson for the company said that Gore had double-digit revenue growth the past three years. With this type of performance and extensive product line, you might expect Gore to be structured like big companies such as Westpac, SingTel, Microsoft or Goodman Fielder. But it’s not, and it never was.
Wilbert L. Gore founded W. L. Gore & Associates in 1958. Gore believed that too much hierarchy and bureaucracy stifled creativity and adaptation, a view he formed during his 17-year career as a DuPont engineer. He stated once that “communication really happens in the car park,” meaning informal arenas allowed employees to share their ideas openly without fear of criticism from management. So Gore decided to eliminate the hierarchy found in most organisations. Instead, he instructed everyone to communicate openly, with little regard to status differences. In fact, Gore eliminated status differences altogether. At W. L. Gore & Associates, there are no job titles. Each employee works on projects collaboratively, while at the same time is given the freedom to develop new ideas. Ideas that are deemed worthy of pursuing by team members are then developed.
In addition to the lack of bureaucracy, Gore also kept his facilities staffed with a small number of employees to promote information sharing and foster teamwork. For example, he limited staffing at manufacturing plants to 200 employees, which is smaller than typical manufacturing firms. Gore believed the number was low enough for employees to get to know one another, allowing them to talk freely about their knowledge and ideas. The result of such a corporate structure has been tremendous growth and profit. Gore has also been an industry leader in innovation. Gore’s unique structure does take some getting used to, particularly for new employees. Diane Davidson recalls that the lack of a formal hierarchy was bewildering at first. As a sales executive in the apparel industry, Davidson was hired by Gore to promote its fabrics to designers such as Prada and Hugo Boss. Davidson states, “I came from a very traditional, male-dominated business—the men’s shoe business. When I arrived at Gore, I didn’t know who did what. I wondered how anything got done here. It was driving me crazy.” Instead of a formal supervisor, Davidson was assigned to a “starting sponsor.” As opposed to a traditional supervisor, the sponsor at Gore helps new hires learn the ropes—which primarily consist of getting to know one’s team. “Who’s my boss.” she repeatedly asked her sponsor. Her sponsor would reply, “Stop using the b-word.”
Davidson eventually got used to Gore’s structure. “Your team is your boss, because you don’t want to let them down. Everyone’s your boss, and no one’s your boss,” she explains. Not only are there no formal supervisors at Gore, but employees’ job descriptions are conspicuously absent as well. Employees at Gore perform multiple tasks to create a new product. Davidson, for example, is involved in marketing, sales, and sponsorship—roles that typically are separated in other organizations. As John Morgan, an employee of Gore for more than 20 years, states, “You join a team and you’re an idiot. It takes 18 months to build credibility. Early on, it’s really frustrating. In hindsight, it makes sense. As a sponsor, I tell new hires, ‘Your job for the first 6 months is to get to know the team,’ but they have trouble believing it—and not contributing when other people are.”
1. How would you characterize Gore’s Organisational structure using terms from this chapter? For example, is it mechanistic or organic? How might this structure influence Gore’s strategy?
2. Considering what you know about individual differences such as personality, what types of employees might respond more or less favorably to Gore’s lack of hierarchy?
3. What are some advantages and disadvantages of Gore’s structure from a company perspective? What about from an employee perspective?
4. How might Gore’s Organisational design affect its relationships with external companies that are more hierarchical in nature?
1. CASE STUDY-Personality and Values – The Rise and Fall of Carly Fiorina
For a long time, Carleton S. (“Carly”) Fiorina was one of the best-known CEO’s in the world. Brought in as Hewlett-Packard’s (HP) CEO in 1999, Fiorina was instantly recognisable for her charisma, visibility, and aggressiveness. Practically every OB book (including past editions of this one) featured her. She was even mentioned as a possible cabinet member of the Bush administration or a Senate candidate from California. Widely praised as a change agent and a visionary leader at Lucent Technologies—which she led before joining HP—Fiorina had a way of generating enthusiasm and excitement. Some called her a “rock star” CEO.
However, under Fiorina’s leadership, HP struggled as the world’s second-largest computer company. Although revenue climbed steadily under her leadership, profits did not. Nor did the stock price—an investor who bought HP stock the day Fiorina was hired would have seen 55% of the investment vanish by the time she was fired. Her acquisition of Compaq in 2002, which Walter Hewlett (son of the company’s co-founder and one of HP’s largest shareholders) was adamantly against, never paid off as promised.
As a result of these struggles, the HP board tried to find a way to limit Fiorina’s powers and give more authority to the other executives. A month before her firing, Fiorina was told point-blank by three board members that she had to change her style. She adamantly refused. A month later, when informed of the board’s decision to fire her, Fiorina was “stunned.”
After her firing, there was no shortage of experts to point out her failings. Some felt that Fiorina spent too much time on the road talking to groups and not enough time inside the company. Others felt she over-promised results. One HP executive stated, “there were people inside HP who loved Carly because of her ability to architect a strategy, but then there were the people who thought that she was drawn to all the pomp and circumstance.” Another HP observer claimed after Fiorina’s was ousted, “The employees never accepted Fiorina's attempts to change HP culture, or her high profile ways (she placed her portrait in HP headquarters next to the HP founders, and she frequently rubbed elbows with rock stars like the Edge, Gwen Stefani, and Sheryl Crow).
For someone who was praised for her energy and leadership, how could the tides have turned so dramatically against her? For now, the rock star CEO is without a band.”
1. Why is it that the qualities that seemingly were a great asset to Fiorina and HP—energy, enthusiasm, charisma, vision, tenacity, aggressiveness—became liabilities? Does this case contradict the view that personality is important? Explain.
2. Some have argued that Fiorina failed because her personality was “too big” and that she became more focused on herself than on the nuts-and-bolts of business. Can a person’s personality be too strong? How so?
3. Some have argued that her firing is an example of the double-standard that being aggressive and forceful works for men but backfires for women. Do you think gender had anything to do with Fiorina’s firing?
4. Fiorina had to complete a 2-hour, 900 question personality test as part of the process to select her as CEO. Does this suggest that personality testing has little value?