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Unique characteristics of ownership culture
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| Unique characteristics of ownership culture W.L. Gore believes that, given the right environment, there is no limit to what people can accomplish. That is where the W.L. Gore lattice system comes into play. It gives the associates the opportunity to use their own judgement, select their own projects and directly access the resources they need to be successful. Another unique aspect of the lattice system is the company’s insistence that no single operating division become larger than 200 people in order to preserve the intimacy and ease of communications amongst smaller work groups. As divisions grow, they are separated into constituent parts to preserve that culture. Discussion This case illustrates some of the organisational characteristics that are necessary for innovation to occur. The unique organisational model seems to work for W.L. Gore. It is certainly contemporary and does seem to help to unleash creativity and to foster teamwork in an entrepreneurial environment that seeks to provide maximum freedom and support for its employees (associates. Many of the organisational characteristics are not, however, unique to W.L. Gore and there are many other firms where these characteristics can be found, such as M, Hewlett-Packard, Corning, Dyson, BP and Shell. It does reinforce the need for firms wishing to be innovative to adopt these characteristics (see Table There are several key characteristics that help make the W.L. Gore company successful, both financially and as a place to work. First, the high-quality technology and heritage of the firm that encourages an emphasis on developing superior products. Second, the use of small teams encourages direct one-on-one communication this contributes to the ability to make timely, informed decisions and get products to market very quickly. Third, the channels of communications are very open, the lattice structure allowing all employees the freedom to meet and discuss projects, situations, concerns and share congratulations with everyone. Fourth, W.L. Gore believes that providing equity compensation to its employees establishes a sense of ownership and increased commitment amongst its employees. The ASOP programme at W.L. Gore is the majority owner of the company. Fifth, W.L. Gore provides a comprehensive set of employee benefits and is continually looking for ways to improve upon what is currently available. Sometimes, that just means reevaluating what the employees want and need. Finally, making sure that the individual work groups do not get too large to be effective is a key element of rightsizing for the company culture. This way, W.L. Gore maintains a sense of intimacy and ease of communications amongst its work groups. Whilst the employee share ownership sounds attractive, any decrease in performance and fall in value of the shares can cause enormous resentment within the firm as they seethe value of their savings decrease. And, unlike publicly listed firms, these shareholders cannot remove the managers. W.L. Gore’s competitors are varied and diverse there is no single company that competes with Gore in every product area. Firms such as Bayer, Hoecht, Corning, Dow and DuPont all compete in Gore’s product fields medical, fabric, industrial and electronic applications. The business strategy pursued by W.L. Gore Asssociates has been very successful to date. However, in some of its markets, competition is beginning to emerge. Gore must decide whether it wants to become involved in and attempt to win a price war in these markets or to try to offer superior name-brand products. Alternatively, it could decide to rely on its traditional approach of utilising its RD to develop new product applications that will enable it to enter new markets, often as the sole business offering certain product types. Gore may need to reassess its RD activities to focus on specific and marketable new technology if it wishes to keep its position as the technological leader in many of its industries. Rather than allowing individual associates to organise and conduct their own projects, more emphasis could be placed on strategic RD pro- grammes where the business sees opportunities for growth to enable it to create new ventures. Sources: Anfuso, D. (1999) Core values shape W.L. Gore’s innovative culture, Workforce magazine (US, March, 48–53; Gore (2003) Extract from the W.L. Gore Associates website Harrison, L. (2002) Were all the boss, Time, Inside Business edition, 8 April McCall, A. (ed) (2002) The firm that lets staff breathe, The Sunday Times (London, 24 March, ‘100 Best Companies to Work For, special section Milford, MA company philosophy in bricks and mortar, New York Times, 1 September, Sec. R, p. 5. The Sunday Times (2007) ‘100 Best Companies to Work For supplement, 11 March. M04 Innovation Management and New Product Development 51523.indd 137 20/11/2020 20:30 |