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The Un-manager

No ranks, no titles, nothing but profits. W. L. Gore Associates has an unusual approach to management structure -- none at all.

Early on the morning of July 26, 1976, 23-year-old Jack Dougherty drove the five miles from his apartment to the Newark, Del., headquarters of W.L. Gore & Associates Inc. He noticed the horses grazing on either side of the road, and for a while he held the image in his mind. But he was preoccupied. It was his first day on the job, and the recent MBA from the College of William and Mary was bursting with resolve. "I was beginning my career," he says. "I told myself that all the fooling around had stopped. I was all business."

Dressed in a dark blue suit and smiling broadly, Dougherty presented himself to Bill Gore, the founder of the company. He shook hands firmly but warmly, looked Gore in the eye, and said he was ready for anything. "That's fine, Jack, fine," Gore told him. "Why don't you look around and find something you'd like to do." "That," Dougherty says, "was probably the one thing I wasn't ready for. I was shocked, but he was so relaxed about everything that I decided to go along with it. He said maybe I should start at the Cherry Hill plant, where a lot of the new products were, and I figured they'd probably have something set up for me over there. But they didn't. I was confused for the next three weeks."

Jack spent his time earnestly interrogating various product managers who were more than happy to explain their activities in great detail. Finally, Dougherty careened into the office of Joe Tanner, who was busy marketing the latest wunderkind from the Gore laboratories. It was a white, gossamer-thin membrane with pores too small for a molecule of water to penetrate yet large enough to transmit certain vapors.

It was called Gore-tex, Tanner said, and when it was bonded to a fabric, lo and behold, the fabric became waterproof but "breathable," a combination of qualities that had long eluded researches. He was only making tents with it now, Tanner continued, but it wouldn't be long until the great out-of-doors would see legions of campers wearing Gore-tex parkas, backpacks, and other gear. Dougherty heard them marching. "I liked what I heard," he says. The next morning, the new employee, dressed in jeans, was helping feed fabric into the maw of a huge laminator. Dougherty had found his "something to do." Today, Dougherty is responsible for all advertising and marketing in the fabrics group, the third largest segment of the company's business.

Bill Gore claims that Jack Dougherty's success, like the success of the company itself, is the happy consequence of a system of un-management Gore calls the "lattice organization." It is so named because every individual within it deals directly with every other, one on one, in relationships best described as a cross-hatching of horizontal and vertical lines. Unlike traditional "pyramid" management structures with carefully defined chains of command, Gore's lattice contains no titles, no orders, and no bosses. Associates, as all Gore employees are called, are allowed to identify an area where they feel they will be able to make their best contribution. Then, they are encouraged to maximize their individual accomplishments. "We don't manage people here," Bill Gore says. "People manage themselves. We organize ourselves around voluntary commitments. There is a fundamental difference in philosophy between a commitment and a command."

Hearing about the lattice without seeing it in operation can leave a suspicion that Bill Gore may have created a kind of self-indulgent commune where the profits of commerce are largely irrelevant. But the suspicion doesn't last long; the numbers won't allow it. During the past five years, Gore's sales and earnings have been growing at a compound annual rate of nearly 40%. In the fiscal year ended March 31, 1982, the company's worldwide sales approached $125 million from five basic product groups: wire and cable, medical, Gore-tex fabrics, Gore-tex fibers, and industrial filter bags. The company has some 2,000 associates in 20 plants worldwide and 7 more plants under construction.

"Money is essential," Bill Gore says. "Without it, you don't have an enterprise." When someone suggested recently that Gore's determined drive for profits seemed incompatible with his more rarified ideas about human relationships, Gore said: "That's because there's something wrong with your education, sir. Actually, making money is a creative activity. It means people are applauding you for making a good contribution. In fact, it gives us the freedom to be what we are."

Wilbert L. Gore was born in Meridian, Idaho, near Boise. He is 70 but looks 50. His face is tan and creased from a lifetime of outdoorsmanship, primarily backpacking. He is trim and compact, standing about five feet, seven inches tall. He is calm and totally devoid of pretense. When he was studying for his degree in chemical engineering at the University of Utah, he won the Rocky Mountain Conference diving title from the one-meter board. Bill recalls growing up "with a lot of love around me."

At age six, Bill began his mountain wanderings in the Wasatch Range in Utah. And it was in those mountains, at a church summer camp, that he later met his future wife, Genevieve. Vieve, as she is called, says that in those days, every time she came around, Bill would execute a series of back somersaults. Friends say they are inseparable. One company advertisement features a photograph of them in full backpacking gear against a cratered, mountainous landscape. The caption reads: "The force behind the dream."

The dream itself first started taking shape from 1945 to 1957, when Bill worked on a task force in the research labs of E.I. Du Pont de Nemours. As Bill remembers it, the taskforce approach to problem-solving had just been introduced at Du Pont. It had become increasingly popular in scientific research after prototype groups had proven their effectiveness during World War II. Bill's group, which at times included 20 researchers from various scientific disciplines, was intent on fabricating useful products from a polymer Du Pont had patented in 1937 called polytetrafluoroethylene, or PTFE. Years later, consumers would know PTFE as "Teflon," of nonstick-frying fame.

At the time, though, PTFE was little more than a puzzle. It had all the markings of a super-substance: It was strong, impervious to chemical solvents, abrasion-resistant, stable over a wide range of temperatures, and a nearly perfect electrical insulator. But in polymer form, PTFE could be neither injection-molded nor extruded by melt-processing techniques, the two traditional methods of fashioning, say, a plastic bowl. It could be "ram" extruded, a process of taking a lump of PTFE, a battering ram of some sort, and then smashing the PTFE through an orifice. Tape and tubing could be made that way, but little else. "The task force," Bill says, "was exciting, challenging, and loads of fun. Besides, we worked like Trojans. I began to wonder why entire companies couldn't be run the same way."

But even as Bill's group burned the midnight oil, another task force succeeded in creating a thermoplastic copolymer of PTFE that could be conventionally fabricated. "Du Pont felt that was good enough," Bill says, "and our group was dissolved. Everybody went back to their departments." Gore did, too, but nights, holidays, and weekends, he went to his basement. "I had a pretty good shop set up," he says, "so I started fooling around with polymer PTFE down there."

Bill continued to pursue his career at Du Pont and tinker in the basement for a year or so. One night in the fall of 1957, Bob Gore, a junior studying chemical engineering at the University of Delaware, dropped in on his father in the basement lab. He was surprised when his father launched into a long lecture on PTFE. Not only did Bill recite the litany of qualities he considered superior to those of the thermoplastic copolymer, but he also related their importance to another technological revolution that was unfolding at an astonishing pace -- computers.

Ever since he first entered a few numbers into a computer named Einiac, a forerunner of Univac, Bill had followed the evolution of computers and transistors with growing excitement. He felt that some of PTFE's characteristics made it an ideal insulator for electrical wires in computers. It would make them easier to build, he said, and would ultimately increase their efficiency. And that, he concluded, could mean a very profitable market.

Bill explained that he had tried various ways to make a PTFE coating but had failed. He held up an aborted section of ribbon cable and pointed out where his attempts had broken down. "Then I noticed some sealant tape made by the 3M company," Bob says. "Dad had said it was ram-extruded PTFE so I asked him: 'Why don't you try this tape?' Dad said that would mean laminating the wires between two sections of tape and everybody knew you couldn't bond PTFE to itself. I went to bed."

As near as Bob can recall, it was around 4 a.m. when his father shook him awake. "I really didn't grasp what he was talking about," Bob says, "except I knew my father was very excited. I was sitting on the edge of my bed blinking at him, and he was waving this small piece of cable around saying: 'It works. It works."

"That's right," Bill says, "I stayed up all night to try out his suggestion. My son proved everybody wrong. But I really think it was 6 a.m. Bob used to sleep late." The next night, father and son returned to the lab and made ribbon cable "just as beautiful as can be."

During the next four months, Bill Gore tried to persuade Du Pont to take on the PTFE ribbon cable as a new product. "By that time in my career," he says, "I knew people who could make a decision. But it came through loud and clear that Du Pont regarded itself as a supplier of plastic raw materials and not as a fabricator." Soon after he learned of the company's decision, Bill and Vieve talked about starting their own wire and cable business. Bill said that if they mortgaged their house and took $4,000 from savings, they could make a go of it for two years. If they weren't successful by then, he said, he could probably get his job back at Du Pont or possibly teach at a university.

On January 1, 1958, their 23rd wedding anniversary, Bill and Vieve started another partnership."All of our friends told us not to do it," Vieve Gore says, "and that's a very difficult thing. But this man of mine had it in his head. He just had to do it. We had that basement festooned with lights. We put drill holes in the floor and drill holes in the walls. It's hard to describe what it's like to bring your husband home and turn him loose."

When Bill Gore left Du Pont, he was 45 years old with five children to support. He left behind a career that spanned 17 years, a good salary, and security. But he also took a lot with him. During the next 24 years, virtually every new product Gore & Associates introduced was based on the PTFE polymer, bought from Du Pont, that Bill first encountered on the task force. And, just as important, Gore set out to recreate in his own company the sense of excited commitment, personal fulfillment, and self-direction that he had experienced on the Du Pont task force. "From the very beginning," Bill says, "we were using the principles of the lattice. After all, there was just Vieve and me, and we had been using them for years."

The two years the Gores had given themselves quickly slipped away. They needed business badly. The few odd orders that trickled into the basement just weren't paying the bills. "We came very close to calling it quits," Vieve says. But help was on the way.

One afternoon, Vieve stopped sifting PTFE powder to answer a phone call from a man who said he was with the city of Denver's water department. He said he had a sample of ribbon cable and was very interested but needed answers to a few technical questions. "Obviously Bill was the technical expert," Vieve says, "but he was out on an errand. I didn't know what to say. First, he asked for the product manager and I said he was out at the moment, then he asked for the sales manager, and finally for the president. They were all out, I told him. Before I could ask if I could help, he was hollering: 'What kind of a company is this anyway?"

It took a little diplomacy, but eventually the Gores got an order for about $100,000 worth of ribbon cable to be used as part of a system that monitored pressure in water mains. "That order put us over the hump," Bill says. "We took off from there."

By the time Bob Gore joined the company in 1963 with a Ph.D. in chemical engineering, it was clear the wire and cable business had taken hold. The company was properly ensconced in a new plant on Paper Mill Road in Newark, horses grazed lazily in pastures nearby, and the sun was shining on W. L. Gore & Associates. But all was not well. There were profits in the till, but there were also cracks in the lattice.

One warm Monday morning in the summer of 1965, Bill Gore was taking his usual stroll through the plant "to look around and say hello" when he suddenly realized that he no longer knew everyone's name. "I'm not talking about just one person," he says, "but several. I said to myself, 'Hey, the game has changed." Actually, the game was still the same, but there were many more players. The company had grown from simple connubial bliss to close to 200 employees. That growth was, in itself, a basement dream come true, something every entrepreneur hopes for. But, as often happens, it was still somewhat disconcerting.

"As the number of associates grew," Bill says, "we had to find a way to help people get started and then to follow their progress. This was particularly important when it came to compensation." At the same time, Bill wanted to avoid smothering the company in thick layers of formal "management," a common response to organizational problems that he felt stifled individual creativity. Instead, he promoted a kind of "buddy system," a casual Big Brother or Big Sister relationship in which a more experienced associate took a specific and personal interest in the contributions, problems, and goals of a new associate.

Gradually, the "buddy" system maturned into the "sponsor" system, a largely semantic difference that, nonetheless, accurately suggests a more sophisticated sense of advocacy and involvement. Everyone at Gore has a sponsor and frequently more than one. The associate who starts out in, say, fabric inspection and quality control and then becomes interested in fabric lamination will have a sponsor in each department and perhaps still others as the associate's responsibilities grow.

Ultimately this associate will also become a sponsor, because at Gore leaders are not appointed but are allowed to "happen." "Leaders are so defined," Bill Gore says, "because they have followers. And why people follow one person and not another, I don't really know. Sometimes it's based on superior knowledge or skill, but there are many other nonobjective and perhaps even mystical factors."

The sponsorship system was a harmonious addition to Bill Gore's evolving method of un-management. It was flexible, expandable, and well suited to accommodate the future needs of a growing company -- but it wasn't enough. During that tour when Bill discovered that he didn't know everyone's name, he also realized that neither did anyone else. Even more alarming, he found a subtle shift in perspective; the once tightly knit group had lost its sense of identity. Although he wasn't sure of the cause, his memories of the Du Pont task force strongly suggested that it had to do with the number of people in the group. Apparently, he reasoned, as that number approached 200, a group somehow became a crowd in which individuals grew increasingly anonymous and significantly less cooperative.

In part to test his theory and in part to reach midwestern markets, Bill Gore opened a second plant in 1967 in Flag-staff, Ariz. As people shifted to Flagstaff, the number of associates at the Newark plant dropped to 150. "That did the trick," Bill says. "People started smiling more. You could tell they felt better even by the way they said 'hello." In the years that followed, the accuracy of his intuition was proven time and again. Each time the magic number was breached, group cohesiveness and cooperation declined. Each time, Bill would open another plant. In fact, he has opened 18 more plants since 1967, at an average cost of almost $4.5 million. The openings are all the more remarkable because the company never used a dime of debt until 1980.

The thought obviously pleases Bill Gore; he smiles faintly and says: "Opening plants costs money, but it makes money." Then he goes on to say that his goal in the next five years is to become one of the country's biggest companies. Almost impishly he waits for the message to sink in. Obviously growth of that magnitude means a cloudburst of new plant openings. "Yes, I know," he says contentedly."We've already got seven under construction. Now do you see why profits are essential?"

The middle '60s marked a period of transition for W. L. Gore & Associates. By 1969, as the company approached $6 million in sales, Bill Gore had confronted the problem of growth and had found some innovative solutions consistent with his vision of a lattice organization. The sponsorship system, for example, preserved both order and individual freedom. And the realization that size had a measurable impact on group dynamics was another theoretical and then practical breakthrough. As a result, the lattice itself was evolving. These developments couldn't have been better timed. Bob Gore was about to have another brainstorm.

In the fall of 1969, Bob was troubled by a growing suspicion that the company's wire and cable business was slowing down because of market saturation and increasing competition. The anxiety made him restless and soon he found himself working nights in the lab toying with PTFE. If he could stretch PTFE, he reasoned, he could introduce air into its molecular structure, giving a greater volume per pound of raw material without affecting its performance. This, in turn, could sharply reduce the company's fabricating costs and ultimately increase profit margins on coated wire and cable products. That way, any sales slowdown could be offset by increasing profitability. The scientific community had already determined that PTFE couldn't be stretched very far. But since he had proven conventional wisdom wrong once before, Bob decided to go ahead.

For three days, he took slender rods of PTFE about a foot long and preheated them in the lab's ovens. Then, ever so gently, he pulled on both ends of the rod. Each time, the rod snapped in two. He tried again and again. He tried different temperatures. He tried to adjust the force of his easy pull. Nothing worked.

Finally, the days of futile, frustrating effort caught up with him.One evening in October, Bob Gore, dressed in a white lab coat and heavy asbestos gloves, took a rod from the oven, grabbed each end, and angrily yanked his clenched fists apart. The foot-long rod stretched the full length of his extended arms. "I couldn't believe it," he says. "I went right home. I didn't say anything to anybody because I thought it might be a fluke. I knew what I had done, but I just couldn't believe it. I always entered my results in a journal, but that night I didn't write anything. I must've been really worked up."

Early the next morning, Bob hurried to the lab so he could repeat his experiment before anyone else arrived. After several successful attempts, he called in his father and colleagues. With a quick flourish of his arms, he revealed the fruits of his labor. "We were all very quiet," Bill Gore says. "We were all trained scientists so we recognized the importance of what Bob had done. I was very proud."

Word spread rapidly throughout the company that Bob Gore had discovered a "miracle product." Even today, associates who were there recall the time with a certain breathless sense of wonder. "Everybody seemed to have an idea how to use it," says Burt Chase, business leader of the wire and cable division. "Bob kept a small gray file-card box in his office so people could drop off their ideas. I remember one that said we should string tennis racquets with expanded PTFE. We were all caught up in the excitement." The list of suggested ideas was so exhaustive that when the patent was filed on May 21, 1970, it correctly anticipated every product application that would be introduced during the next 12 years, with the sole exception of vascular grafting. In only six months, the miracle product, now called Gore-tex, had totally reshaped the company's future. A wire and cable company had been transformed into a multi-faceted high-technology company reaching for a tantalizing variety of markets. At least that is how it appeared in the white heat of the moment. Translating imagination into viable commercial products was another matter.

Gore's first product using expanded PTFE was made by a process that didn't bathe the company in the glory of hightech precision but was, nonetheless, a fitting example of the resourcefulness that would characterize the development of Gore-tex. This product was, and is, a joint sealant that is put on pipe flanges to ensure a tight fit.

Bob Gore affectionately describes the sealant's method of manufacture as the "sneaker process." Two men would come to work wearing sneakers; they would each grab an end of a preheated length of PTFE; they would nod to each other when ready, and then they would run like crazy to opposite ends of the warehouse. Voila, they had made Gore-tex sealant tape. "Now that was something to see," Bob Gore says. "I guess it was about 100 feet, wall to wall, and those guys really flew. It wasn't fancy, but it worked."

While the boys were sprinting out in the warehouse, Bob and his colleagues were creating machines that could mass-produce the Gore-tex membrane in wide sheets and then bond it to fabrics. But it was slow work, and to keep the miracle product alive and growing, the associates foraged for new applications wherever and whenever they could.

In 1971, for example, Bill Gore chanced on the company's second largest division on a snow-covered slope in Colorado where he was skiing with friends, including Dr. Ben Eiseman of the Denver General Hospital. "We were just about to start a run," Bill Gore says, "when I absent-mindedly pulled a small tubular section of Gore-tex out of my pocket and looked at it. 'What is that stuff?' Ben asked. So I told him about its properties. 'Feels great,' he said. 'What do you use it for?' 'Got no idea,' I said. 'Well give it to me,' he said, 'and I'll try it in a vascular graft on a pig.' Two weeks later, he called me up. Ben was pretty excited. 'Bill,' he said, 'I put it in a pig and it works. What do I do now?' I told him to get together with Pete Cooper in our Flagstaff plant, and I let them figure it out." Although a major problem would have to be solved four years later, 375,000 patients throughout the world now walk around with Gore-tex vascular grafts. "Cardiovascular disease is one of the major health problems of mankind," says medical products leader Jack Hoover. "The use of Gore-tex to treat it has only just begun."

By 1973, Bob's engineering team had devised machines that could stretch Gore-tex wide enough to cover the standard commercial dimensions of several different fabrics. All their tests indicated that, at long last, the secret of a waterproof, breathable garment had been discovered. Bill Gore couldn't have been happier, but he wasn't going to wear it; he wanted to sleep in it. For years, Bill had yearned for a light, waterproof tent that would save him lower back pain on long mountain treks. Gore-tex looked like the answer to a veteran camper's prayer.

Since Vieve had routinely handcrafted their backpacks and tents, Bill commissioned her to stitch up a tent from sections of Gore-tex he had bonded to mosquito netting. Then they set off for the mountains of the Wind River Range in the wilds of Wyoming. "One night," Bill says, "it started to rain just after we had gone to bed. And it rained harder. Vieve and I felt around the tent and it was bone dry. We were very pleased with ourselves. But then the rain turned partly to hail. The hail punched tiny holes through the Gore-tex, and later there must've been two inches of water in the tent. We didn't sleep well that night."

As it turned out, Bill and Vieve's soggy night at Wind River was more than a temporary inconvenience; it was the first sign that Gore-tex had entered a time of troubles. During the next five years, Gore-tex would suffer a variety of technical growing pains. Some were minor, but others were critical, even potentially fatal to the reputation of a miracle product, and all would test the resiliency of the lattice.

In June 1975, Dr. Charles Campbell, senior resident at the University of Pittsburgh, reported to Jack Hoover that a Gore-tex arterial graft he had placed in a patient had developed an aneurism, a bubblelike protrusion of the arterial wall that meant it wasn't strong enough to withstand the pressure of the blood within it. If the aneurism continued to expand, it would eventually burst, and the patient could die.

The problem had to be solved quickly and permanently if the company's plans for vascular grafts were ever to be realized. "I'm told from time to time," Bill Gore says, "that a lattice organization can't meet a crisis well because it takes too long to reach a consensus when there are no bosses. But this isn't true. Actually, a lattice, by its very nature, works particularly well in a crisis. A lot of useless effort is avoided because there is no rigid management hierarchy to conquer before you can attack a problem."

Only days after his call, Dr. Campbell flew to Newark to present his findings to Bill and Bob Gore and several other associates drawn from production and research. The meeting adjourned after two hours of discussion, and the associates went their seaprate ways to consider solutions. But one of the associates, Dan Hubis, already had an idea he thought might work. If he could wrap another layer of Gore-tex around a section of graft, he reasoned, he might be able to increase the rupture tolerance of the entire section. Hubis, a former Elkton, Md., policeman who had joined Gore in 1966 to work on new production methods, immediately started testing his idea in the lab.

He tried various wrapping techniques, and after each try he forced compressed air through the specimen section to see it if would hold. On his twelfth try, after three hours of work, he found the right method. Hubis had resolved a potentially serious setback in only one afternoon. "It was quick because it had to be," Hubis says."I don't remember any clapping or cheering, but I know we were very happy." Bill Gore was pleased, too; not only was it a noteworthy technical accomplishment, but it also proved the worth of the lattice. "There were several people with different skills all working on a common problem," Bill says."They came together quickly, and no one was slowed down because they had to get the approval of some higher-up before they could proceed. The creativity of such a group is much greater than the sum of its members."

As 1976 began, W. L. Gore & Associates still looked like the wire and cable company founded 18 years earlier. It was more elaborate, of course, with more people, more markets, and a broader product line, but at least 90% of sales and profits were still being drawn from the basic wire and cable business. After several years of research and development, Gore-tex was only a modest success, contributing some $2 million in sales from uses in microfiltration, industrial filter bags, joint sealant, and medical products. But even though Gore & Associates may have looked like the same old company, it didn't look that way for long, because in 1976, Gore-tex took off and took the whole company with it. "From that time," says Shanti Mehta, Gore's financial leader, "the company's sales and earnings have grown at least 35% a year. Gore-tex products were soon contributing almost 50% of our business."

The initial surge was led by the medical products division as Hubis's strengthened graft won widespread acceptance in the medical community -- eventually it would control 70% of the market. Then the Gore-tex fabric division kicked in with its first commercial product, a tent.

Amountaineer named Bill Nicolai had nearly frozen to death in the Picket Range of Washington State's North Cascades in the fall of 1971. Like the Gores, Nicolai had problems with his tent, only his was shredded to streamers in a storm. And also like the Gores, he wasn't going to let it happen again. That winter he created a two-man expedition tent especially designed to withstand nature's high-altitude perversities. He called it the Omnipotent, in praise of its virtues, and then he founded a company, Early Winters Ltd., to make it and sell it.

But the Omnipotent was a costly and complex affair meant for very serious climbers, and Nicolai soon learned that there just weren't that many people around who habitually spent their time on the roof of the world. For several years, Early Winters, like its customers, lived close to the edge of disaster. Even by January 1976, the company -- one product, five employees, and rented space in a former neighborhood grocery store in Seattle -- was still struggling to survive. Then Joe Tanner walked through the door. Since February 1974, when he joined Gore, Tanner had been traveling around the country literally trying to give Gore-tex away to anyone who would agree to make something with it. A few companies were willing to give it a try, but afterwards they balked when they were asked to buy it. Then Tanner found Nicolai.

"I'd never met the man before," says Nicolai. "But there he was telling me about this stuff that was waterproof and breathed. He wanted me to make a tent with it. Of course, I'd heard all this before, but I had nothing to lose; my tent wasn't selling very well." Nicolai took some Gore-tex laminate, quickly fashioned a prototype tent, and headed for the hills. "The fantastic thing about it was that it worked," he says. "I took it camping at Icicle Creek in the Cascades. That night it was drizzling and 29 degrees Fahrenheit -- perfect for condensation. When I woke up in the morning, I felt the side of the tent and it was bone dry. A shiver went down my spine." Nicolai's new tent, christened Light Dimension, was an instant success.

Although the Omnipotent is still favored by professional climbers, the Light Dimension reached a much bigger market because it set up quickly and was light, compact, and, at $195, some $60 less than its big brother. Sales at Early Winters jumped from $6,000 a month to $35,000, enabling Nicolai to introduce several new products. Today, the company's tents, parkas, and other equipment produce annual sales of roughly $10 million.

There was only one man who could have matched Nicolai smile for smile, and that was Joe Tanner. Two years of hope, disappointment, tests, and more hope had finally paid off. That summer he explained to a young business school graduate recently hired at Gore that even though he was making only tents with Gore-tex laminate, it wouldn't be long until the great out-of-doors was draped with Gore-tex. During the next two years, as word of waterproof, breathable fabrics spread from Nicolai's store, Tanner signed up some half-dozen larger and better-known manufacturers.

Gore supplied the membrane and the lamination process, but it left design, cutting, and sewing to the manufacturers. Companies like Sierra West, Banana Equipment, and Recreational Equipment Inc. started making parkas, rainwear, sleeping bags, and a variety of outdoor accessories with Gore-tex. Once again, the sun was shining on W. L. Gore & Associates. But the summer of 1978, which began so full of promise for the Gore-tex fabrics division, gradually darkened into deepest gloom. "It was a nightmare," says Peter Gilson, the division's business leader. "Parkas were being returned because they leaked."

Gilson had just joined Gore. He was 38 years old, but he already had 15 years of conspicuous accomplishment in the fabrics business at Du Pont. But even with all his experience, Gilson was bewildered when leaky parkas started showing up in groups of threes and fours. "We had no idea why they leaked," he says. "At first we thought the customers hadn't sealed the seams properly or maybe they punctured it somehow. We sensed we had a problem, but because the parkas straggled in, we weren't sure how big it was." But there was one thing that Gilson did know: The entire company's reputation and credibility were on the line.

In September, Gore researchers discovered that certain oils in human sweat could clog the pores in the Gore-tex membrane, which, in turn, altered the surface tension of the membrane, allowing water molecules to pass through. In short, sweaty parkas leaked. But they also discovered that such "contaminated" parkas could be restored if they were washed in a detergent and doublerinse cycle or, in extreme cases, in a denatured alcohol bath. This became known as the "Ivory Snow Solution" and it was passed on to every Gore-tex manufacturer and dealer. For a while, there was hope that this solution would remedy the relatively few complaints being reported. Then, in November, Gilson received a disturbing letter from a part-time employee of Sierra West who also worked as a mountain guide. He told Gilson about a recent experience when he led a small group of campers into the Sierras and they were hit by a freak storm. "His name was Butch," Gilson says, "and I remember he wrote: 'My parka leaked, and my life was in danger.' That scared the hell out of us. Clearly our solution was no solution at all to someone on a mountaintop."

Gilson, at Gore only a few months, was faced with a decision that could cause serious damage to the entire company. Bill Gore calls decisions of this type "waterline decisions," using the image of a sinking ship. At any other time, Gore associates are allowed to solve their problems independently; free to seek advice or not, as they see fit. But if the problem could twist toward the company's waterline, associates must consult with other associates before proceeding. As evidence mounted, it became clear that the contamination problem was larger in scope and carried more serious consequences than had first been imagined.

Gilson sat down at a conference table with Bob Gore and four other associates. The circumstances were undeniably grave, but otherwise the meeting merely reflected the normal metabolism of a healthy lattice organization. Once again, associates with different skills had been brought together to solve a common problem. Bob Gore was there for his scientific expertise and the others brought talents in marketing, manufacturing, and quality control. The more they talked, the more they realized that there was only one thing they could do. "We took all of the noninsulated Gore-tex garments off the market," Gilson says. "We brought back, at our own expense, a fortune in pipeline material. Anything that was in the stores, at the manufacturers, or anywhere else in the pipeline, we stopped."

Meanwhile, Bob Gore set out to find a permanent answer to the contamination problem. One month after the garments were taken off the market, Bob Gore came out of the lab having restructured the molecular configuration of the membrane to exclude the oils that were causing the contamination. By late December, parkas made with improved, second-generation Gore-tex laminates were already on dealers' racks. In addition, Gilson told dealers that any time a customer returned a leaky parka, they should replace it with a second-generation model and bill the company. "In the four years since 1978, we've taken back roughly $3.5 million of first-generation products. But hind-sight tells us that we made the right decision. We didn't lose our credibility. We haven't lost even one customer."

As time passed, Gilson's perspective changed to give equal weight to what was gained as well as to what hadn't been lost. In four years, Gore's customer list grew from the original 6 to 125, including names like North Face, C. B. Sports, and Sierra Designs. Gore-tex fabrics blossomed into a profusion of products. There are Gore-tex jogging shoes, hiking boots, and high-fashion boots for women; Gore-tex hats and gloves; and trench coats, ski jackets, and golf jackets. There are even Gore-tex space suits on the space shuttle, Columbia. The fabrics division has grown "substantially faster" than the company as a whole, and Gilson expects it to double its size in the current fiscal year alone. And, he says, there is more growth on the way. This year the Army and the Marine Corps will begin outfitting troops in Gore-tex wet-weather parkas, pants, and headgear. "That," says Gilson, "is a sizable piece of business."

Still, the scare of '78 hasn't been entirely forgotten. Bill Gore, for example, likes to test a sample of every new garment personally to assure himself that it doesn't leak. Sometimes, he is spotted wandering around the grounds of the Newark plant during a rainstorm wearing a colorful, hooded parka, but at other times, when nature fails, he is perfectly content to wear a similar parka out to the garden behind his house and stand there with a hose over his head.

Ever since Bob Gore yanked a new future out of preheated goop, W. L. Gore & Associates has risen at a pace and in directions that no observer could have anticipated. But just as the company seems focused on a future of dramatic growth with fabrics as the largest and fastest-growing business in the company, yet another Gore prepares to yank something spectacular out of the goop.

"It will be the desalination of sea water; you know, malking it drinkable," says Bill Gore. "We haven't talked much about it, because it's still in development. But my son, Dave, is going to give a paper on it next month."

Dave Gore is a 37-year-old physicist who has been working on the process for almost three years in Flagstaff. He says the idea first impressed him when he was a child watching his father scamper around the roof of the house setting up solar-distillation experiments. "It's always been a big dream of mine," he says. "It would have impact. You can make the desert bloom." But it was the invention of the Gore-tex membrane that made the dream come true.

Basically, Dave's process, which he calls "membrane distillation," involves passing water vapor from salt water through a Gore-tex membrane. Impurities are left behind and then the vapor condenses against a cold surface to recover potable water. He claims membrane distillation is considerably more efficient and less expensive than any other technique currently available. Even though he has only small units being tested, Dave says he is about ready to market them commercially. "We'll start with the $100 million-a-year market for pure laboratory water," he says, "and then we'll move to making drinking water from seawater. Worldwide, the market is probably worth billions. It's a little bit mind-boggling when you think of all the possibilities."

Could it be that virtually anything is possible in some kind of corporate paradise structured on the lattice? Is the lattice the answer to every problem? "No," says Bill Gore. "For example, established companies would find it very difficult to use the lattice. Too many hierarchies would be destroyed. When you remove titles and positions and allow people to follow who they want, it may very well be someone other than the person who has been in charge. The lattice works for us, but it's always evolving. You have to expect problems."

Sometimes, it appears, the lattice can even make life difficult for those it serves. Burt Chase, head of wire and cable, says the unhappiest moment of his 20-year career was caused by a sponsor who wouldn't sponsor. "I still don't know what his problem was," Chase says. "At the time, I was selling on the West Coast, and I had three men working with me. Time after time I'd tell my sponsor that if he didn't come through for me on one thing or another, I'd have to let the men down. He'd nod and say: 'Uh, huh, I'll take care of it.' But he never did. Finally, I had to go directly to Bill Gore. I guess Bill told him that there were some very unhappy men out there and that woke him up. Anyway, it's still a potential problem that we work very hard at avoiding."

And sometimes customers don't quite know what to make of it. "I was taken aback that something that loose could really work," says Eric Reynolds, founder of Marmot Mountain Works Ltd. of Grand Junction, Colo., and a major Gore customer. "I was also taken by the romance of it all, the idea of free spirits working together. But the more I've seen of it the more I think that the lattice works best in research and development projects. I think the lattice has its problems with the day-to-day nittygritty of getting things done on time and getting products out the door. I don't think Bill quite realizes how the lattice system affects customers. I mean, after you've established a relationship with someone about product quality, you can call up one day and suddenly find that someone new to you is handling your problems. It's frustrating to find a lack of continuity. But I have to admit that I've personally seen at Gore remarkable examples of people coming out of nowhere and excelling."

Associates asked to describe the lattice in operation act as if they have just been teased with an insoluble riddle. They do their best to capture a phenomenon that at times requires them to invent a new vocabulary. But in the end it becomes clear that the lattice to them is like breathing, something done every second and rarely thought about. "You don't come to work here and say 'Okay, now we've got to do the lattice system," says Carmela Avallone, head of fabric inspection. "The lattice is a feeling, a state of mind." And ultimately, they say, that feeling finds its way back to Bill and Vieve Gore.

Late on afternoon, Bill and Vieve were swapping stories about their adventures in the mountains of the world. Vieve suddenly changed the subject and began talking about a meeting the company had held for the associates on the previous Saturday. Some 600 associates filled an auditorium at the University of Delaware, she said, to listen to a detailed presentation about the company's results for the year and plans for the future. This was done regularly, she said, but this year was a little different. "My son, Bob, got up to speak," she said. "And then behind him were slides projected that he had put together showing Bill as a young man. There was even a picture of him going off a diving board. Bob looked at the pictures for a while and then he turned to the associates and said: 'My father was a young man once,' and that's how he introduced Bill."

As Vieve was telling the story she never stopped looking at her husband, and at the end of it she had tears in her eyes. And he never looked away from her, because they were talking really only for each other. He was looking at her and smiling faintly with utter tenderness.Vieve didn't say any more, but Carmela Avallone finished the story later. "When Bill got up," she said, "everyone started clapping, and then they stood up, and it went on and on, and there weren't many dry eyes that day."

"It's much better to use friendship and love," Bill Gore once said, "than slavery and whips. The results will always be much better."

Last updated: Aug 1, 1982

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