Iowa Business Professor Studies Why GORE-TEX Maker So Successful
For years, poll after poll has put W.L. Gore & Associates near the top of the list of best places to work.
In a study published in Organizational Dynamics, Greg Stewart, a management and organization professor at The University of Iowa's Tippie College of Business, and two colleagues found the company's success stems from its unique management structure.
Or, or more accurately, lack of one.
Gore is a consumer and industrial products development company that is perhaps best known for its GORE-TEX line of outdoor clothing. The company has more than 8,500 employees worldwide with annual revenues of more than $2 billion and is on Forbes magazine's list of the 500 largest privately held companies.
Stewart and his coauthors—Frank Shipper of Salisbury University and Charles Manz of the University of Massachusetts—conducted interviews with several of Gore's leaders and employees to find out what makes it so unique that it has appeared on most every best places to work poll since such polls first appeared in 1984. The research article cites a Fortune magazine report that Gore's turnover rate is only 5 percent, which he said is remarkably low for a company of such a size.
Over and over again, employees cited Gore's egalitarian management structure that essentially has no leadership other than what is required by law. Group project leaders emerge based on their product knowledge and skill and are designated by their peers, not by upper levels of management. New employees spend their first months mostly meeting other employees and building relationships, not jumping into production.
If there is a corporate structure, Stewart said it is mostly a lattice, not a hierarchy, with new employees guided around the lattice by a "sponsor," or what more traditional companies would call a mentor.
"The emphasis is not on title or authority but on making valuable contributions to the business," Stewart and his coauthors wrote. "In turn, associates are compensated based on their contribution to the company."
But while many companies say they emphasize loyalty and commitment, Stewart said Gore seems to actually put those principles in place. Nobody gives orders—decisions come from consensus building that, while company officials admitted could be time-consuming, works in the long run because employees feel like they had a voice in the decision.
Ultimately, the structure fosters personal initiative and encourages innovation that leads to marketable products that benefit the company's bottom line.
Stewart said the company's nontraditional structure means it's not a good fit for everybody. For instance, his study found that workers who use their jobs to stroke their own egos or play office politics are discovered early and tend not to stay with the company.
The study by Stewart and his colleagues, "Everyone a Team Leader: Shared Influence at W.L. Gore & Associates," appears in the July-September 2009 issue of Organizational Dynamics.
Contact: Tom Snee, UI News Services, 319-384-0010