Exceptional Americas, Ernst & Young



Meet Terri Kelly, CEO of Gore–America’s most innovative company

Terri Kelly is the first to admit it. “I can talk forever,” laughs the CEO and president of W. L. Gore & Associates. And as the leader of one of the most innovative companies in the world, she’s got plenty to talk about.

“I am such a context setter,” she says. “It’s all about giving people the big picture. I don’t like it when you leave a conversation and the communication wasn’t clear.”

There are two important things to know about Gore: the company develops cutting-edge products, and it accomplishes this using a truly unique management structure. As head communicator, Kelly is ushering the unique Gore culture into the virtual age and with a global presence.

In 1958, William Gore founded W. L. Gore & Associates, growing the company quickly with sales offices in Los Angeles and London, a manufacturing plant in Germany and a licensing agreement in Japan, all before 1970. In 1969, a Gore cable allowed Apollo 11 to attach seismographic equipment connected to the lunar lander.

That was the same year William Gore began stretching a polymer called polytrafluoroethylene (PTFE). This discovery launched one of the most adaptable and recognizable products in the world. In 1972, Gore-Tex fibers were born, eventually put to work in filters, fabric and synthetic vascular grafts. In the 1990s, Gore developed Glide dental floss and Elixir guitar strings, using the very same polymer.

But it’s not just material breakthroughs that set Gore apart. The company is also celebrated for its highly unconventional management structure. Gore operates as a lattice, where there are not many, if any, barriers between individuals. Depending on cross-functional teams, innovation is not relegated to the laboratory but is fostered in a variety of settings.

Employees are called “associates,” and Kelly is one of a very few to have a job title. Associates of the privately held company are offered associate stock ownership, and their compensation is determined by an unusual system of peer ranking and review. Small, self-managed teams drive innovation.

In fact, Gore is defined by innovation – in both the products it produces and its organizational systems. “Bill Gore was always thinking about how [the Gore culture] was going to allow us to be more innovative and a more effective enterprise,” says Kelly. “If there’s one thing I have to keep doing, it’s to connect that for associates. Having an environment where people feel good has to be connected to a higher purpose.”

And so Kelly spends much of her energy making sure the Gore values – belief in the individual, the power of small teams, a sense of shared responsibility and taking a long-term view – are front and center. These values drive every single decision that Gore’s people make, from scientist to CEO.

Kelly epitomizes the ideal Gore associate: she is a self-motivated, critical thinker who is devoted to the lattice-style management system. This should come as no surprise. With almost three decades at the company, she has never worked anywhere else.

As a mechanical engineer right out of the University of Delaware, Kelly was recruited by Gore as part of a new-graduate program. She took the job and never looked back. In the 1980s, she was on the team that introduced the US military to Gore-Tex, the waterproof and breathable fabric that put the company on the map. Eventually, she co-led the global fabrics division and helped established a manufacturing plant in Shenzhen, China.

Through a unique peer-selection process, she was selected as the company’s fourth CEO and President in 2005. As she describes it, leading Gore is not for the faint of heart. “My job is herding cats,” she says. “It’s a very messy process. It looks very structured and logical and orderly, and it’s absolutely the opposite.” This chaos stems from the Gore culture, which depends highly creative associates who are deeply and personally invested in their work.

Along with four basic values, the company depends on four principles: freedom, fairness, commitment and cross-checking (an idea Kelly expresses as “waterline”). Associates are driven by a passion for their work and a sense of responsibility to their teams and the company as a whole. But the independent spirit required to excel can bump up against the culture’s demand for cooperation.

So, associates must demonstrate a great deal of self-awareness, assertiveness and flexibility. Those without these qualities don’t last long, Kelly says, and it’s one reason that leaders are not usually hired from outside.

“Everyone [in the company] has the same value set and understanding of how we want to engage as associates,” she says. “When you empower folks who feel ownership – and are owners in the company – they’re not going to just sit back and listen to what I say or any other leader says.”

Kelly insures that Gore values take center stage even as the company grows. She is committed to maintaining individualism while working towards a common purpose. That ultimate goal is not financial, however. “In fact, it’s quite the opposite,” she says. “We purposely put the financial objective last [among strategic objectives]. If you do all of those other things right – drive innovation, drive commitment to your associates and your environment – [financial success] is an outcome.”

In the last fiscal year, Gore’s worldwide sales were US$3b. The company employs more than 9,500 associates in 30 countries, with plants in the US, Germany, the UK, Japan and China, as well as sales offices around the globe. But these locations remain small, usually employing no more than 200 people.

“As we’ve gotten larger, [we’ve become] a very decentralized organization,” says Kelly. “We’re organized around four main divisions [electronic, industrial, medical and fabrics products] that are, in large part, market segments. We’ve got to mesh that high level of integrity with some consistency in core processes that we care about. It does matter that we have a common approach to innovation, versus [allowing] every team to do it a different way.”

This is an idea that goes against the grain. Although consistency is now required, this is not an easy path to take. In the Gore culture, “we hate doing things in a consistent way. If it has to be done and sustained, we typically get really bored.”

Creating a balance between structure and innovation is critical. Gore’s “rainmakers” are a good example. These associates are the real innovators, the folks who build and discover new things, without regard to the next steps.

“They just keep inventing stuff,” says Kelly. “They have no clue how to operationalize it. The natural tendency is you’ll stifle the rainmakers. You have to kind of surround them with folks, save them from themselves.”

Clearly Kelly is not fazed by the impossible. It certainly helped to grow up in the Gore culture—which questions, criticizes and embraces failure. She has the heart of a pioneer and the soul of a scientist. “[We’re continuing to] push the boundaries of where our material sets will take us, as well as exploiting those [technologies] in the markets we are already in. We are a very diversified company. There are probably very few markets we’re not in, in some way. If there’s a need for that material set, you’ll find us there.”

Still, she recognizes that this is just one way to run a company. She’s often asked how other organizations can create their own, similar culture. “What some fundamentally fail to recognize is you have to embrace the values first,” she says. “It’s not about our innovation tools and how many reviews we do and what kind of models we use. If you don’t have [the values] piece, you won’t get the benefit you think you’re going to get.”

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