MGT3073: In these days of near-instant unicorns and listings that net a fortune for founders, selling an innovative small business: Leadership Case Study, SU, Malaysia

CASE STUDY

In these days of near-instant unicorns and listings that net a fortune for founders, selling an innovative small business in order to join a large established company might seem counterintuitive.

When Jason Field did just this, joining WL Gore & Associates in 2005, it could have been seen as an indication of burnout, or at the very least a tacit declaration of desire for a more routine, less pressured existence. But you do not join the US materials science group, which is best known for Gore-Tex waterproofing, but which also makes products as varied as guitar strings and heart patches, for a quiet life and sedate progress through the ranks of a conventional company. For a start, there are not any ranks.

Before joining Gore, Mr. Field, then in his thirties, had owned a horse veterinary practice in Flagstaff, Arizona, where he had pioneered the idea of a new kind of stent. By the time he joined Gore, he had picked up enough about the unique culture of the “enterprise” (its preferred identifier) through his customers, some of whom worked at Gore’s nearby medical business headquarters, to be intrigued.

Mr. Field says that the scientific expertise of his customers that worked at Gore had pushed him to be a better vet, while also helping him identify an opportunity “to apply my technological background in a new setting”. This initially led to him taking a research and development role in the company. First product: his stent. It was a natural fit.

Other aspects of Gore’s unusual working culture — including quite different reporting structures — took more adjusting to. Although roles and responsibilities at Gore are clearly defined, they are not captured in neat organizational charts, and the only concession to hierarchy is the word “leader” on a select number of business cards.

In Gore’s “lattice organization”, anyone can talk to anyone, and no one tells another what to do. Instead, new employees — all of whom become shareholders if they stay are encouraged to navigate their own way through the business.

The self-propelled culture suited Mr. Field. So much so, that somewhat to his surprise, he maintains, he emerged last year from Gore’s selection process as the fifth chief executive in six decades of history. A successful career at Gore and a close fit with the board and founding family over values and future direction were obviously important in his appointment. But those alone would not have been enough: no one gets to the top leadership role at Gore unless they have the strong support of colleagues, known internally as “associates”.

“We extend a lot of freedoms to associates,” says Mr. Field. “For individuals who are strongly personally motivated and self-driven, that usually works well from the outset. For those who are used to being directed and told how to do things, it’s a challenge.” Not everyone is able to adapt, he notes.

Gore has a disarmingly simple working definition of leadership: a capability to attract followers, for which no other qualifications are a substitute. Mr. Field quickly discovered that his previous business record counted for little. “That can be challenging for someone joining later with career experience, and I certainly went through it looking for my opportunity to build credibility and followership,” he says. “You really do have to demonstrate those capabilities, not just talk about them.”

As Mr. Field describes it, to lead Gore is to steward a company that prides itself on innovating. It has a constantly expanding portfolio of more than 1,000 products, ranging from Gore-Tex to aerospace cable wiring assemblies.

But Gore’s most significant innovation may not be a particular product, but rather the unique non-hierarchical management model that enables the new products to emerge. “We do see companies trying to replicate some of what we do,” says Mr. Field. “But it’s hard to take bits of it and apply them piecemeal because it’s an ecosystem a truly holistic way of working.

When Bill and Vieve Gore founded the company in 1958, in Newark, Delaware, the aim was to build an organization where inventive people could “have fun and make money”. But they did it seriously. Bill Gore was greatly influenced by human relations school theorists Douglas  McGregor, and Abraham  Maslow and emphasized the importance of purpose. In the case of Gore, this meant applying technology to have a meaningful impact on society. He also wanted to support human fulfillment, embodied in a set of principles and management practices designed to foster trust, and initiative and enable the emergence of natural leaders.

We talk about the sweet spot where personal interest, skills and experience, and business needs intersect,” says Mr. Field. “Where that happens, we really encourage associates to chase those experiences.” This, he believes, supplies the fun, the energy for forwarding momentum, and the fuel for Gore’s creativity.

Nurturing this all-important culture absorbs much of Mr. Field’s attention. And as the company has grown — in 2018 revenues were $3.5bn with a headcount of 9,500 being so atypical a company has cut both ways.

There has been no shortage of growth opportunities in healthcare, aviation, electric vehicles, and telecoms, for instance, but the company has learned the hard way that it cannot expand faster than it can scale the culture — one person at a time.

It helps that Gore is privately held, so it does not need to react to every spike in the news cycle or short-term demands from Wall Street. But inventing your own rules means there are no conventional management short-cuts to fall back on. It has had to define decision-making roles and attribute accountability more clearly. There have also been uncomfortable moments when the company has struggled to reconcile the founding principles with the need for more structure to support growth. “Gore isn’t perfect,” Mr. Field says.

“But we’re a human organization, a learning organization, and we think about our organization and practices in the same way as we think about our technology … the more we can find proof points that we’re going in the right direction and allocate resources against those practices, the better off we shall be.

Question 1

Is the approach to leadership known as “self-management” here to stay? Will it catch on, or is it just another passing management fad? Based on the case study above, critically evaluate the extent to which self-management can be replicated successfully in any kind of organization, regardless of industry or national culture. Your discussion should also compare this approach to leadership with other leadership theories that have evolved over time.

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