Stuart Read and Robert Wiltbank look at a company that managed to grow yet still remain entrepreneurial.

Adventurers from New York to Nepal have long appreciated Gore-Tex. The material’s seemingly paradoxical ability to keep the weather out while enabling perspiration to escape enables a wide range of functional and comfortable outerwear. And as the firm which delivered this innovation, WL Gore & Associates, has reached its 50th birthday, we celebrate by taking a closer look at how the company has stayed entrepreneurial for half a century.

Difficult Climate for Corporate Innovation

W.L. “Bill”ù Gore started his career at DuPont in 1945 and joined a team finding applications for a novel polymer called polytetrafluoroethylene ? Teflon to the rest of us. Bill experimented with the material as a tough, heat-resistant coating for wiring, an application which he felt offered great potential given the likely rise of the computer. Convinced of its technical merits, he tried unsuccessfully to convince DuPont to productize Teflon coated cable. Frustrated, in 1958 he created his own firm with his wife Vieve in their basement. WL Gore & Associates’ cable product did create a market and within 10 years the firm employed more than 200 people, and Gore cable had been used on a mission to the moon.

Fresh Air

Strong competition in the cable industry kept Bill and his son Bob focused on innovation. Continuing to work with Teflon, the pair figured out how to heat and stretch the material so it could be woven as fabric, and Gore-Tex was born. But even before that, Bill had started carefully crafting WL Gore & Associates’ organization so that it could embrace innovation in the way his previous employer had not.

The Committed Associate

Employees of WL Gore are called Associates. In the non-hierarchical ‘lattice’ structure, Gore empowered all his employees with the same level of authority. Leaders could only emerge if other Associates committed to follow them, and Associates had the choice of which projects to work on. The intent and outcome of the structure was to enable good new ideas to grow organically at the discretion of the team. And the teams also had the support of Gore as he let them do just about anything that would not jeopardize the entire company.

Smaller Sizes

Gore quantified optimal team size, and constructed his organization accordingly. He felt that when a team at a manufacturing facility exceeded 150 people, two things happened. First, the team lost a sense of cooperation, shifting decision responsibility from “we”ù (the team) to “they”ù (some anonymous faceless bureaucrat). Second, accomplishment per person started to decrease on teams exceeding 150. Consequently, when manufacturing teams exceeded 200 people, Gore split the operation into two.

Expectation Repellent

The approach has worked. Today, WL Gore & Associates has created innovative products in areas you probably know, such as clothing and shoes, and in many more that range from guitar strings to dental floss, and space suits to sutures. Gore is one of the 200 largest private firms in the US, and in 2007, for the tenth straight year, the firm made FORTUNE ‘s annual list of the U.S. “100 Best Companies to Work For.” Today, with more than $2 billion in annual sales, 2,000 patents and more than 8,000 employees worldwide, the company continues to defy the common expectation that large cannot also be entrepreneurial.

Stuart Read is professor of marketing, IMD, Lausanne, Switzerland. Robert Wiltbank is assistant professor of strategic management, Atkinson School, Willamette University, Oregon.

Publication:  British Airways Business Life
Stuart Read
Robert Wiltbank

Relevant Principles:
Pilot-in-the-Plane (Control vs. Predict)