Most of the people tend to relate innovation with millions of dollars or technology brands such as Apple or Microsoft; others tend to believe that the only answer for that word is the creation of new products that appears in a miracle way. Unfortunately, there exist some that say it is a concept that was recently created, a current tendency. However, innovation has always existed; the only difference is that in the recent years the world has been witness of more changes than before.

These changes are more visible because the companies have understood that innovation is now a duty to survive. Additionally, most of the enterprises have added to their routines the innovation process. This process makes reference to all the procedures and efforts that a company has to continuously develop new products or services and use them as differential factors to stay alive in the market.

A firm that understood innovation was going to be vital for its survival and differentiation was WL Gore and Associates. The company was founded at the late of the 50s and it’s considered the first company to challenge the hierarchy management system and until now it is named as one of the most innovative companies and best places to work in the world.[1]

WL Gore and Associates was founded by Bill and Genevieve Gore, happily married couple, in 1958 and one of theirs objectives was to have a company without hierarchy and bureaucracy, in which everybody could feel free to talk with others to share ideas and a place in which anyone could work in whatever they want, in what you are really good. The foundations of the firm was based on the theories of the book of Douglas McGregor, the “Theory X” vs “Theory Y”, in which X means the lazy employees that are motivated by the money and the Y means the employees that are self-motivated problem solvers and enjoy their work.

This idea came to Bill Gore because he was tired to work in a hierarchy company full of bosses and supervisors, in DuPont, in a system where a lot of ideas were dropped only because the managers didn’t understand them or didn’t believe on them. When Bill had 45, he finally decided to leave the company and start to work with his wife in the basement of their house using the family savings. Only few people dare to quit their comfort zone, and what Bill didn’t know was that his decision was going to create one of the most innovative companies in the world and that he was going to be considered a management innovator.

WL Gore and Associates is a company focus on the discovery and innovation of products. All their products can be found in almost every market, since pharmaceutical until cables, fibers and guitar strings. The company doesn’t have a core product but its most used product is the Gore-Tex, a technology that keeps the customer dry. This technology is used by important brands such as Nike, Under Armour, Caterpillar and The North Face.

Moreover, the company has around 10,000 employees and it has presence in 30 countries. In the last years the firm has reported revenues of $3.0 billion USD and it is continuously developing and creating new products. The management implemented system has let it to have the position it has now.

Hierarchical vs flat structure

The company doesn’t have an organigram or people with important titles. Everyone inside of WL Gore are important and nobody is essential than the other. All the teams are self-managed and the leader of the team is selected by the team members or is naturally selected with the actions implemented. With this format the worker reports directly to its peers and avoid bureaucracy.

In a hierarchical management the communication flows in one direction, from up to down, the typical cascade system. However, in WL Gore & Associates the communication flows in a sideway, team mate to team mate, from team to team. The channel is direct and the flat structure let to connect all the teams. This also helps to the message to arrive unfiltered and avoid any intermediary that can distort the information.

One of the rules for every team is, “to make money and have fun.”[2] In a company in which the management system gives a lot of freedom and wants to encourage the creation of news ideas, the communication should be as simple as possible and without obstacles.

Titles vs leaders

In the case of the selection of managers and leaders, it is well known that people will always prefer to follow leaders than someone named with an important title. For this reason, in WL Gore there are no titles such as boss, manager or supervisor and it is difficult to hear someone calling boss to other.

Every leader is chosen by the members or for all the work previously done and experience showed building teams. The road to the leadership is the steps of every employee. Quoting one member, “We vote with our feet.”[3] Additionally, in case a leader is having bad results the team mates have the power to remove him and give the opportunity to other partner.

Sponsors vs Bosses

Due to WL Gore has a lack of hierarchy system, the company has implemented a program for every employee hired. In fact, every new member always asks for his direct boss but for the firm this question will never have an answer. Instead of this, a sponsor is assigned to him. This sponsor is in charge to mentor and support him until he finds a place in one of the teams. If the new recruit doesn’t feel well working with the sponsor he has the option to pick a new one.

Orders vs commitment

Related to the theory that was used to found WL Gore, “Theory Y,” in which the employees are self-motivated and problem solvers, the company applies the same criteria for the tasks and responsibilities. Every employee has the freedom to do only the work that he wants instead to order an employee about what to do; the model is based in self-commitment.

The commitment reflects a self-decision, on the other hand, the people who receive orders they not always feel comfortable and the task could not be realize in the best effective way. According to the company, this model makes the employee feel free. Additionally, the rewarded plan for every worker is based in the evaluation of the contribution of every task.

Due to the selection of the tasks is done by self-commitment, the employee has the option to say yes to more activities and receive a better compensation but also exists the option to say no to the activities. In the company the only workers that receive a punishment generally are the new members because they tried to do a lot of tasks.

Peer reviews and shareholder

As it was mentioned before, the company doesn’t have managers or bosses, so every worker is evaluated by their peers. Every employee receives an evaluation of at least 20 team members and then he is ranked by the system to receive compensation. In many cases a manager is not able to see what the employees are really doing and this can cause a misjudgment. However, the teammates in the same “floor” know exactly what he did and what he need. This review also helps the employee to receive a constructive feedback. One company that had imitated this strategy of peer review with good results is Morning Star.

Moreover, after one year working for WL Gore, the worker receives shares from the company. With this action the employee feels that he is an owner and that every contribution he does for WL Gore will be also for him. The strategy creates and motivates the people to have a mindset of continuous improvement and experimentation.

Time for innovation

Every employee has as a rule to have 10% of free time respecting to his schedule work hours, or at least half day to work in new ideas and concepts. This is considered one of the most important characteristics for innovation in WL Gore. The company named this time “dabble time”. Some products that were created in this process was the “Gore-Tex” technology, this is a polymer that keep the customer dry and it is used in many products such as shoes, jackets, gloves, etc. All the workers inside of the company are free to experiment.

Other example created with the “dabble time” was the extra durable strings for guitars. This is a good illustration of how the innovation management model of the company and knowledge of the employees permit to develop new innovative products. The strings were created by an employee that was in a project for medical products. In this case, the original project belong to the cables division and it was going to be dropped, but the employee from the medical area saw the opportunity and he requested a team to research more focused in music. The company provided the workers and the crew began the experimentation with the cables for around three years until they reached with the Elixir strings.

The company invests in almost any kind of ideas even when exists high possibilities that the efforts could bring negative results and then the project could be shutting down. However, the company is convinced that the obtained results could be the solution for a different team.

Regarding to the examples previously mentioned, the process to develop a new innovative product correspond to the research-driven innovation engine.

1. The employees are proposing a lot of ideas coming from multiple researches and experimentations of the teams (The failure of someone could be the solution for other).
2. One idea correspond to a new possible product/technology
3. The company through its own process (“Real, Win, Worth”) will pick one to add it to the portfolio.
4. Some projects after being accepted could be canceled in the experimentation or before to be launch.

The process to accept and eliminate an idea is based in the filter of “Real, Win, Worth.”  This concept is in charge of a special group that decides if the investment continues or not, and for this the group resolves using the next questions: “Is the opportunity real? Is there really somebody out there that will buy it? Can we win in the marketplace? What do the economics look like? Can we make money? Is it unique and valuable? Can we have a sustained advantage, say, patent protection?”[1]

Between teams and members exists another filter that requires less time and goes before to the previous one. If someone calls to a meeting to present his idea but at the end only a few are able to support it, then it is possible that the idea is not a good one.

The company has developed the experience to “free” the projects even when these are very successful. Not all the technologies could be maintained and due to the nature of the product it is safer and healthier to look for a buyer. During the 90s the company created a dental floss, Glide, with high quality, well accepted in the market and very recommended by dentists. However, to have only one product for hygiene concepts was going to be expensive to keep it than sell it.

For external people who want to present their idea, they could goes to the program, “Studying & Working in Gore.” In this program the company permits to the persons present their project in the next categories:

• Students
• Internships
• Thesis (diploma, bachelor, degree)
• Different fields of activity: at least three times per year the students present their projects and thesis to the employees to receive feedback.

Mobilizing ideas

The company believes in the creation of the ideas through the interaction of its people. For this belief, every building can’t have more than 200 hundred employees. So every worker could walk and share easily information between the teams and know more about what others are doing. Furthermore, every time a complex reaches the number, a new facility should be open and this new building could be next to the other.

WL Gore has clusters with 15 or 20 facilities around the world and this strategy is also use to create new ideas. The firm encourages the employees to go and scout to the neighbor building and see what projects are being developed, to look for volunteers or to ask for some advices.

Patience

There is no time that guarantees that an idea will be innovative and will have success. Even when the proposed ideas took years to be developed and be mature, the firm has been able to create the value of patience. While others companies look for quickly return of investments in WL Gore are faithful to their process.

The patience and the innovation process of WL Gore is what have given the success to the company. Using both concepts, the firm experiments with the product until this get very mature and avoids launching a premature product, reducing the risk to fail in the market.

Wrap up[2]

According to the analysis, it can be considered that the process innovation model of WL Gore is based under two gears. The first gear is the disruptive management model of the company and the second gear is the internal process to accept and experiment through the research-driven innovation model. These concepts has permitted the success of the company even when it doesn´t have a core product. I consider that WL Gore instead to have one core product it has many.

In the first gear, the culture and management it has developed through more 50 years has been essential to give the freedom and empowerment that an employee need, the “dabble time,” flat hierarchy, sharing ideas, scouting to other facilities, peer evaluation, etc. to create different and constant ideas, and also to work in many projects.

Additionally, the company creates the feeling of belonging giving shares to the employee, and this motivates the people to contribute more because they are not only contributing for the system, they are contributing for themselves. The first gear is essential to develop the mindset of innovation in the behavior of the employee. However, the success has not been only because they are good proposing ideas; it has been because it has developed a process to accept and reject.

The second gear in WL Gore is the key factor to success creating innovative ideas. The company developed the process “Real, Win, Worth” combined with the continuous research and experimentation of the idea has let the firm to be named in several as one of the most innovative companies of the world.

It is amazing how this company since its foundation and until now has been an example of what the word of innovation means. Even now it’s difficult to find companies with a similar management model and innovation process, the few that have followed the example of WL Gore have been very successful such as Google, Whole Foods and Morning Star. WL Gore is a company that has the innovation in its genes.

It is difficult to imagine that someone living in 1958 could have the idea to challenge the reality of the hierarchy systems and create a company without bosses and focus on the discovery of new technologies. Thanks to this bravery thinking the people is living great advances and discoveries.

Unfortunately there are no much information able about the company, probably because is still private. However, the data that is available can provide a panorama about why WL Gore is innovative.

Recommendations

Increase dabble time. Most of the strong projects WL Gore has developed (Gore-Tex, Elixir, Glide, etc.) have been through the “dabble time.” If the company permits to its employees more free time to work in their personal projects and share more ideas with their partners it could be possible that additional projects can be proposed. WL Gore could have a bigger pool of ideas and it can implement this strategy giving 15% or 20% of free time and observe if the pool of proposals start to grow.

Apply open innovation. Due to the company invests in many different sectors and ideas it could be interested to see what kind of ideas can attract or can create. Regarding to the concept of, “the results of someone could be the solution for others,” it exists the possibility that WL Gore could find some answers to the projects in which they have been working or what solutions that they have now could be improve with external proposals. According to the area of the projects, the company could start with external specific contests to generate ideas.

Be the R&D department of the companies. Many multinationals enterprises use WL Gore technologies such as Nike, Under Armour, North Face, etc. What could happen if these companies can request specific technologies or share their patents to be upgraded or created by WL Gore. Not all the companies have the same experience discovering and improving technologies as WL Gore. This is a win-win threat, WL Gore could learn about the patent and it can win money with the sales of the products that using it. On the other hand, the external firm will have an exclusive and high differentiator technology, and also it’ll have the guarantee that will be developed by real professionals.

Bibliography

Day, G., 2007. Is It Real? Can We Win? Is It Worth Doing?: Managing Risk and Reward in an Innovation Portfolio. [Online]
Available at: https://hbr.org/2007/12/is-it-real-can-we-win-is-it-worth-doing-managing-risk-and-reward-in-an-innovation-portfolio
[Accessed 23 February 2017].

Fortune, 2016. W. L. Gore & Associates. [Online]
Available at: http://fortune.com/best-companies/w-l-gore-associates-12/
[Accessed 28 February 2017].

Gary Hamel, B. B., 2007. The Future of Management. Boston: Harvard Business Press.

Gore, 2016. Gore Again Named One of the 100 Best Companies to Work For®. [Online]
Available at: https://www.gore.com/news-events/press-release/enterprise-press-release-fortune-100-list-2016-us
[Accessed 28 February 2017].

Gore, W., 2017. Collaborate with Gore Associates to Make a Difference. [Online]
Available at: http://www.gore.com/en_gb/careers/studentsandnewgrads/students/studying.html
[Accessed 23 February 2017].

Hamel, G., 2010. Innovation Democracy: W.L. Gore’s Original Management Model. [Online]
Available at: http://www.managementexchange.com/story/innovation-democracy-wl-gores-original-management-model
[Accessed 23 February 2017].

Harrington, A., 2003. Who’s Afraid Of A New Product? Not W.L. Gore. It has mastered the art of storming completely different businesses.. [Online]
Available at: http://archive.fortune.com/magazines/fortune/fortune_archive/2003/11/10/352851/index.htm
[Accessed 23 February 2017].

LaBarre, P., 2012. When nobody (and everybody) is the boss. [Online]
Available at: http://fortune.com/2012/03/05/when-nobody-and-everybody-is-the-boss/
[Accessed 23 February 2017].

I have had some problems with the references, an apologize for it.

[1] (Gary Hamel, 2007)

[2] Attachment #2

[1] (Gore, 2016)

[2] (Hamel, 2010)

[3] (Gary Hamel, 2007)