Innovative employers abandoning outdated management structure

Originally posted April 8, 2014 on by Michael Giardina.

The ability for staff to incorporate innovative new ideas that bring changes to dilapidated processes can only be fostered in a workplace that allows for an open communicative culture across organizational lines.

This core theme was offered by leaders of both retail home mortgage lender Quicken Loans, Inc. and W.L. Gore & Associates, a technology-driven company at last week’s annual Great Place to Work conference.

“The fluidity of communication, the openness of the communication, the transparency of the communication is absolutely critical.” says Quicken Loans CEO Bill Emerson. “…We win when our team members feel connected to the company.”

Quicken Loans, based in downtown Detroit, has more than 10,000 “team members.” In its family of companies, this comprises more than 112 businesses that envelope everything from consumer services and biotechnology to financial services and even the National Basketball Association’s Cleveland Cavaliers franchise. Dan Gilbert, Quicken Loans chairman and founder, previously became the majority owner in March 2005.

“You really need everyone to participate,” Emerson explains, while noting that every company should “make sure everyone understands their passion and ability to affect that outcome.”

On a monthly basis, Emerson has a face-to-face meeting with 20 team members. The content of these talks are usually open to whatever that employee feels can add value to the organization.

“It’s so important to be close to the business, and understand what’s going on so you can hear what’s affecting people on a day-to-day basis,” Emerson explains. “Email is the bane of American business,” he adds.

Emerson states that most businesses are currently plagued by the “spreadsheet mentality,” but offers that “innovation, creativity are all things that are going to drive the top line of your business.”

Creativity is something that is fostered at W.L. Gore & Associates. The company first introduced GORE-TEX in 1978, a waterproof but breathable fabric that probably makes up your jacket or boots. It was first founded in the late 1950s by Bill and Vieve Gore in Newark, Del. One of its first round of employees were paid, in part, in portions of Gore stock.

The longstanding sense of employer empowerment and connection to the company still resonates today, says current president and CEO Terri Kelly. She explains that she spends about 40% of her time to make sure the organization and employees are “nurturing that environment that will allow us to be successful.”

“If we get that right, that’s what engages our associates, that in turn allows them to do great things, and innovate all these wonderful products that we have,” she says.

When first joining the organization, which currently has more than 10,000 employees in 45 plants around the world, Kelly remembers the Gore family inviting its new crop of engineers to their home for a pool party. She contends that this mentality – one that is conducive to openness and family culture – is still driving the company today.

“This is not a new phenomenon for Gore, it’s something we have been shaping for over 55 years,” she explains. “We are very much relationship-based organization; trust is really important, teamwork is incredibly important and so again, the philosophy here is how do we create a network environment that is not based on hierarchy but the associates go to the folks that they need.”

It even holds the same values and trepidation that its founder held regarding rigid employee guidelines, which is similar the same core concepts at fashion retailer Nordstrom.

“Bill Gore also did not like policy manuals – I think he despised policy manuals,” Kelly explains. “I think he had for good reason because he really understood that you could never write down every circumstance or situation for an associate to make a decision.”

The elimination of bureaucratic lines and management reporting is something that sets apart the company that harbors a team-based, flat organizational culture. Adding to this open approach is employee compensation.

“Every associate is evaluated by their peers, and the question we ask is, ‘who is making the greatest impact to the enterprise success?’” she says. “We think this is very powerful, and it’s a lot of work to accomplish. The message it sends is that it’s based on performance, not on title, or positions or seniority … it’s based on your impact to the organization.

“Those that are making the greatest contribution are also making the greatest compensation,” Gore adds.