Team 4: Jisuk Yoo, Mihee Kim, EuiYoung Kim, HyungYun Park, Michael Yi IT Modeling Professor Hee Seok, Lee 3/23/2014 W.L. Gore – Culture of Innovation Q1. Many companies try to sidestep difficult trade-offs: freedom and responsibility, social mission and fat profits, community and competition. So they adopt metrics, rules and processes. How different is Gore from other companies from this perspective?
In relation to freedom and responsibility, Gore attempts to achieve both. The freedom for Gore does not mean that every staff or executive can work freely and make decision in the absence of following any sets of rules or guidance. Rather, freedom for Gore is strictly defined according to its sophisticatedly built-up enterprise culture, and they are as the followings. Gore’s Culture Key Concepts No titles, hierarchy, or a conventional structure. Associates To have belief in the individual are given the chance to work out their own problems power of small teams without an intermediary Discretionary time to explore Ideas are encouraged and making mistakes is viewed as new ideas & concepts part of the creative process Leadership emerged naturally by gaining and Deep Knowledge demonstrating special knowledge, skill, or experience No assigned tasks. Associates choose which projects to Commitments, not titles sponsor by committing their resources Personal Relationships built on Personal responsibility to connect and build their own trust lattice Freedom for Gore rather means that each member, regardless of his or her position, is free to speak up own opinions and is free to make any commitments on an equal footing. Members assist each other to develop through discussing and feed backing. All actions or decisions are strictly evaluated through systematically developed monitoring system before they are executed in reality. The freedom for Gore, in that sense, emphasizes having fairness at work, and is strictly regarded as freedom only when each member is willing to make commitments for the enterprise as a whole, and only when any decisions or actions are knowledge-based and not far off the key principles of Gore‟s. And finally, in pursuing freedom, every member of Gore has to have trust for each other. All in all, in balancing off between the freedom and responsibility,

Gore has created a perfect environment for staffs and executives to achieve the freedom at work, the responsibility in making decisions, and to build a strong employee value proposition. Another factor that differentiates Gore from other conventional enterprises is that it follows democratic process in sharing profits and in the selection of CEO. Gore enterprise provides compensation for its employees based on the contribution that each of these employees generate for the company, and the degree of contribution is strictly judged by his or her peers. As a matter of fact, such peer evaluation and compensation system are adopted by many enterprises in many countries nowadays. However, evaluation process is usually performed under a hierarchical environment and compensation is allocated for the division or team as a whole, or compensated discriminatively accordingly to the titles. On the contrary, peer evaluation in Gore is done within a small team base. Gore enforced the lattice structure that gives associates responsibility to work effectively for their own compensation. Secondly, all Gore members are the stockholders. This is another Gore‟s key practice in encouraging employees‟ commitments and driving motivations at work. Such system, in actuality, is considered to be one of the most effective ways to trigger employees’ motivations at work and is being implemented in many other enterprises nowadays. On top of its unconventional compensation and stock option system, Gore also follows a peer-driven process in selecting CEO. The current CEO, Terri Kelly, after spending 22 years at Gore as a process engineer and a leader for the global fabric division, earned the title of president and CEO in 2005. And such practice (an associate reaching the top to become a leader based on his/her ability to gain respects of their peers and to attract followers) is one of the core principles of Gore in terms of encouraging motivations as a whole and pursuing democratic environment. Aforementioned core values or principles implemented at Gore are all for one achievement after all. That is to create high-valued products. In creating such products, continuous innovation and creativity is crucial, and in order to foster such environment, Gore is adopting and adhering highly free, democratic, and compensating enterprise culture.

Q2. Do you think that the management practices at Gore look a lot like Web 2.0? If so, how?
In many aspects, Gore‟s management system is the so-called “Management 2.0”, which implies a management system that possesses similar traits to Web 2.0. Gore is renowned for its unique lattice organization structure, with no titles, hierarchy, or a conventional structure. The structure has no intermediaries and allows individuals to communicate and share with each other

to come up with endless creative ideas. Meanwhile, the lattice structure uses direct lines of communication and enables associates to grow within the company by developing interpersonal relationships. The co-location of facilities and plants are the key resources for individuals within Gore to collaborate, build, and maintain long-term relationships, which operate similarly to the social interactions on Web 2.0. There are many benefits of having a lattice structure as it shows more organizational flexibility and ability to adapt changes. Gore‟s employees are given one of the three titles „Leaders‟, „Sponsor‟ and „Associates‟. Leaders and Sponsors are the senior employees who act as mentors to help the Associates developed. Besides, Gore treats everyone at the same level and everyone is referred to as an Associate. Leadership is widespread throughout the lattice organization and that allows associates to grow by developing relationship, making commitments, and working harder. A horizontal structure of the organization prevents communication barriers from occurring and assists in sharing of ideas through open communication throughout the organization regardless of experience and expertise. Freedom is one of the four elements in Gore‟s Culture to help and encourage the growth and development of the organization. Much like Web 2.0, there are administrators and creators of content but the main idea is to gather people together and share their knowledge and opinions as openly as possible. Free and open communication within the lattice organization has become a core component for Gore to the extent that the CEO is to be selected by the employees. Web 2.0 has many different types of users but users are all committed to contributing content on the web. Gore‟s horizontal management system works in similar ways in that anyone who has been with Gore for more than a year has a shot at being a Leader. Also, to drive commitment, Gore provides low barriers to drive experimentations and any project failure is put under review to learn from mistakes previously made. A great example of commitment and crowd sourcing on Web 2.0 is Wikipedia. Wikipedia relies on the knowledge of the users to build its knowledge base where people are free to add in their understanding of a specific topic. The only issue with Wikipedia is that, sometime the uploaded content is not always 100% accurate. But as Wikipedia is openly shared, viewers with better knowledge can raise a red flag and make corrections or improve the contents based on the wrong information. Gore utilizes the same principle when starting a new project. An employee with an innovative idea is required to share the idea with all the employees so that potential red flags can be detected before investing in the project. Much like Wikipedia, through openly sharing the idea with the group could lead to better outcomes or reduce the risk of harm being done to the company.

Web 2.0 works on the basis that sites interact with each other and information is shared freely. Gore’s co-location set up between plants and offices provides an environment much like that of Web 2.0. Co-location helps employees and partners to interact on a regular basis and builds teamwork within the circle. Similar to Web 2.0, the use of co-location and open communication leads to better exchange of ideas and to build commitment from the partnering relationship through implementation. As mentioned above, Gore‟s working environment reflects many of the characteristics we see and experience in Web 2.0 today. Characteristics such as open communication and crowd sourcing provide a platform for likeminded people, regardless of hierarchy, to gather and share ideas are both visible at Gore‟s management system as well as on Web 2.0. By providing a lattice environment, similar to that of Web 2.0, Gore successfully motivates, commits and guides the employees and the organization as a whole to become a more innovative company as well as maximizing profits.

Q3. What do you suggest for the implementation of the similar practices in Korean companies?
Top 100 Korean companies seek to hire individuals who possess S.U.P.E.R. as companies demand top qualities from their employees. S.U.P.E.R. stands for “Specialty, Unconventionality, Pioneer-ship, Ethicality, and Responsibility.” Pioneer-ship and responsibility are much more required in the current than 5 years ago because companies are in need of talents that are constantly up to challenges and able to actively overcome various difficulties for the long-term. However, are the working environments supportive enough for employees to reach their full potentials while maximizing firms‟ profits? Comparing to foreign companies, Korea firms tend to have unique specific advantages on relatively long working hours and low-cost hiring of educated employees. In order to strengthen the above characteristics, most Korea companies pursue on basic routines to maximize operational efficiency over their competitors within the shortest time possible rather than focusing on the creativity aspects and respecting individual’s opinions. Therefore, it would be a very risk move following Gore‟s way to provide entire discretionary authority to the employees. Korean companies that had already settled down with the conventional structure are less likely to ignore the benefits of “speedy & efficient management” gained through hierarchy system and go with a totally new innovative structure that raises employees‟ overall satisfaction. However, as the external environment is becoming more and more uncertain, new business opportunities capturing rise to become the main key target of many companies. Consequently,

Korea companies also adventured their management style to concentrate on the individual’s creativities and liberties at work nowadays. In case of Samsung Electronics, they have established the Flexible time policy since 2010 and allow employees to designate their work time between Work and balance. The method was successfully adopted in many divisions. And by providing various job opportunities within the intranet of Samsung electronics, employees are able to apply to different departments through job posting. Many Korea companies are trying to benchmark Google management style in which employee can invest 10% of work time to their own project or hobbies related to work. Jennifer Software, one of the venture companies, is famous for its unique company culture. They have been called the „Google of Korea‟. In fact, the firm enforced the lattice structure by removing the president‟s office. The Café located on the first floor offers casual work environment while the firm also offers flexible time management system and long vacation for their employees. Employees are encouraged for self-improvement and development through consecutive learning. With those cultures CAGR has risen to above 30% per year. Jennifer software and the employees treated each other as an end rather than a means. It collaborates employees for better performance and maximizes employees‟ satisfaction for continuous growth of the future. For Korean conventional companies to adopt the Gore’s management style, there has to be less control of ‘time‘, ‘space’, ‘work-load’ and support for self-improvement at the first phase. We would like to propose as below; which will help maintaining the benefits. 1st Phase: Adoption Range Recommendation industry: Media, Design, Consulting, Software, Game, Culture & Entertainment companies Theme Flexible time policy Hierarchy Detailed Utilize employees‟ time Balanced work & life No title, call by Nickname each other Reference Samsung Electronics Leoburnett, SK telecom

Work Space Work load

Cyber space, Café, movable place 10%~20% of work can be personal project or hobbies Long vacation (more than 5% of work days) Support cultural activities & hobbies Job postings, Self-KPI Jenifer

Self-improvement Job opportunities

SK Comms Samsung Electronics