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Learnings from W.L. Gore: Compensate for Contribution

In 1995 I was invited to join a design team, charged with 1) examining how the Ken Blanchard Cos. operates and 2) facilitating large company meetings to build consensus and inspire action to make agreed to refinements. The project took 14 months of hard work. It was a tremendous learning experience with my five design team colleagues, and absolutely made me a better consultant!

One of the companies we studied was W.L. Gore, widely regarded as one of the best companies on the planet to work for. Best known for Gore-Tex – though most of their revenue comes from medical devices and medical clean room technology – today Gore is a $2.4billion global business with just over 8,000 associates.

Design team members were fascinated with many of the aspects of Gore’s culture and business (it was hard to differentiate between them, which is a big reason why the company is so highly regarded). Three of their approaches stand out to me, now 15 years later:

  1. They have a very flat organization, with no hierarchy or formal bosses. Founder Bill Gore called it a “lattice organization,” where committed, competent people worked with each other to create products that solve customer problems. They didn’t need a “boss” to direct their work.
  2. They keep facilities small to enable employee connections and employee influence of decisions and actions. Typically when a facility (which usually combines sales, R&D, and manufacturing) reaches 300 associates, they begin planning to split the facility into two smaller facilities. Why? Bill Gore said that once you reach 300 people on a site, you lose personal connections. The Gore culture highly values employee involvement, and smaller facilities helps that happen.
  3. They separate compensation from contribution. Associates are ranked by their peers for their contributions, and compensation is based upon the company’s success that fiscal year and on the associate’s ranking.

To learn more about the W.L. Gore company, please read WSJ’s Gary Hamel’s excellent two-part interview with Gore CEO Terri Kelly and the Great Place to Work Institute‘s overview of Gore, a 2009 “Great Place to Work” award winner.

A recent conversation with a client refreshed my memory of Gore’s unique compensation approach. The client’s organization had a classic performance appraisal structure, where employees were placed in a normal distribution of performance rankings. She has five exceptional performers across her 10-person team, yet because of the normal distribution, only ONE of those exceptional performers would be granted a “five out of five” rating. The “5 star” ranked players receive the greatest pay increase. “It’s so frustrating,” she related. “Why should four of my five great performers have their contribution capped because of this stupid system?!?”

I shared Gore’s successful approach of separating compensation from contribution. I explained that every associate at Gore is expected to commit to projects and goals, and to contribute to the company’s success by delivering on their commitments. Annually, their contribution is ranked by associates and compensation decreed by a cross-functional committee. My client loved the idea – but wasn’t sure if her company would consider such a significant shift in their compensation plan.

Many companies are tied to this antiquated approach that ties compensation to a normal distribution. But consider this: can you imagine how much greater performance and higher employee work passion would result if you had a team of all “A+” performers? You can – by separating compensation from contribution.

Evaluate employee contribution FIRST – let them know where they stand compared to benchmark performers. Give them a contribution ranking on a 1-10 or 1-5 scale. THEN explain, given the company’s recent fiscal year performance, how their contribution ranking translates into the upcoming year’s compensation plan.

You know, this just might work!


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Chris’ new “Culture Leadership Charge” series and the rest of his video clips can be found on YouTube. Subscribe to Chris’ YouTube channel.


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itunes_subscribeListen to or subscribe to over 300 of Chris’ Culture Leadership Podcasts on iTunes.


The music heard on Chris’ podcasts is from one of his songs, “Heartfelt,” copyright © 2005-2017 Chris Edmonds Music (ASCAP). He played all instruments, recorded all tracks, and mastered the final product for your listening pleasure.

Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, Chris will receive an affiliate commission. Regardless, Chris only recommend products or services he uses personally and believes will add value to his readers. Chris is disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Changing Habits to Enable Culture Change

In a recent session with a client’s senior leadership team, the group finalized the “ready to share” draft of their organization’s desired purpose, values, and valued behaviors. This process is a lot of hard work; they stuck with it and developed a very solid statement.

Once they publish this purpose, values, and behaviors statement, expectations and scrutiny from all staff will increase; this team understands that. As we finished the day, I explained the best practices for them, as senior leaders, to emphasize BOTH performance and values with their direct reports. I described how, in day to day conversations, during field visits, etc. these leaders must change the way they discuss expectations with their staff. “You do not need to spend more time with your staff at this stage, but you do need to change what you discuss and what you emphasize with them,” I said.

I asked one member of the team who is responsible for field operations to serve as an example. He typically spends 2+ hours on field visits meeting with facility managers. I explained,”You must shift your focus with that facility manager from primarily discussing performance metrics and opportunities to balancing performance discussions with how well they and their site leaders demonstrate and reinforce the organization’s desired values.” The blood drained from his face – he said,“I don’t think I can do that! I’ve been doing these meetings the same way for years – I wouldn’t know how to change them.”

Refining Behaviors to Emphasize Values

Typically leaders have well-developed habits for managing staff and expectations. Some of those habits serve them well – and some don’t. During a culture change initiative, leaders need to:

  1. clarify and share specific expectations (as this team is doing with their newly defined purpose, values, and behaviors), and
  2. demonstrate commitment to the purpose, values, and behaviors by acting on them and emphasizing them consistently.

If a leader’s current habits are not developing a values-aligned organization, he or she must change daily practices through development of new habits. Desired habits will enable  leaders to live the espoused values of the organization and to coach and celebrate others doing so each day. Changing daily practices is about creating new habits: clarify desired practices, evaluate current practices, then close those gaps! Research says that developing new habits requires demonstration of new behaviors for 21 days – no time like the present to start!

One suggestion: consider finding a mentor or coach who can help you understand how others perceive you, whether you are being consistent with values-aligned behaviors, etc.

What NOT to Do is as Important as What TO Do

Like the senior leader who told me this week, “I don’t think I can do that!,” identifying how to more effectively lead a values-aligned culture requires a conscious strategy of deciding what NOT to do . . . which will enable time to DO the important things required of the servant leader. One of our most successful culture clients told me, “There is NOTHING more important for me to do than to talk about and reinforce our desired culture!” Early in their change process he spent about two hours per week focused on their desired culture; as the process evolved over a year, he found he spent about 10 hours per week proactively managing their desired culture. He certainly watched key performance metrics but did not micromanage them.

With dedicated effort, your new habits will be comfortable and will generate immense synergy in your organization with a balanced focus on performance and values.


Subscribe to Chris’ mobile updates, texted right to your smartphone! Text VALUES to 72000 or head here.


Chris’ new “Culture Leadership Charge” series and the rest of his video clips can be found on YouTube. Subscribe to Chris’ YouTube channel.


vimeo_logoChris’ new “Culture Leadership Charge” series and the rest of his video clips are also available on Vimeo. Subscribe to Chris’ Vimeo channel.


podcast_subscribeSubscribe to Chris’ posts via RSS.


itunes_subscribeListen to or subscribe to over 300 of Chris’ Culture Leadership Podcasts on iTunes.


The music heard on Chris’ podcasts is from one of his songs, “Heartfelt,” copyright © 2005-2017 Chris Edmonds Music (ASCAP). He played all instruments, recorded all tracks, and mastered the final product for your listening pleasure.

Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, Chris will receive an affiliate commission. Regardless, Chris only recommend products or services he uses personally and believes will add value to his readers. Chris is disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

New Managers: Three Keys to Success

So you’re a new manager, eh? Congratulations – this role can be one of the most gratifying of your career! Or, it can be a very frustrating experience. We don’t want that, so let me offer some advice from over 35 years of working with effective leaders. Grab a latte and let’s talk.

Who Are You?

First you need to understand yourself thoroughly. Answering these questions will help clarify who you are as a person and as a leader.

  1. What is your life’s purpose? What are you striving for, to serve whom, and to what end? Here is my purpose statement: “To use my expertise and passion to inspire and encourage leaders to clarify their personal values and lead with authenticity.” Feel free to use my statement as a template for yours.
    Realize that this initial step will take a bit of time, a bit of wordsmithing, and a bit of testing. Once you’ve drafted your purpose statement, share it with people you trust – family, friends, co-workers. Ask them if it rings true, based on what they know of you. Listen and refine.
  2. What are the values that guide your plans, decisions, and actions every day? Effective values statements include the value’s definition and behaviors that describe how you’re acting when you demonstrate your values. My values and definitions are listed below. Note that your values will likely be much different than mine – and you can use mine as a template. Then, share it, listen and refine.
    • Integrity – do what I say I will do, keep my commitments, act on my values, so I may “hold my head high” at the end of each day.
    • Learning – scan the environment for current research and discoveries that can enlighten me, my colleagues, and my program participants.
    • Joy – celebrate the pleasure derived from doing work I’m good at and enjoy with interesting, willing learners, and bask in the core grace I feel when helping others grow.
    • Perfection – deliver what I promise so that objectives are exceeded, clients and partners are wowed, and continuously sharpen the saw so future results are better than today’s.
  3. What are your beliefs about leading and motivating people? These beliefs will flow naturally from reflection about the people who have influenced you in your past and from your purpose & values. If, for example, you believe that ordinary people can accomplish extraordinary things when goals are clear and leaders serve followers’ needs, you’re on the road to effective leadership.

The vital question when you are done with this first phase is, “Will you be a servant leader or a self-serving leader?” You’ll be one or the other. If you’ve clarified your purpose, values, and beliefs, our research indicates that servant leadership more frequently results.

Clear Agreements

You want your people to understand what they can expect of you and what you expect of them. First, share your purpose and values with your direct reports; your leadership philosophy is heavily influenced by your purpose, values, and beliefs. Then, share specific performance expectations, and formalize standards, deadlines, and outcomes so there is a clear definition of what “A+” work looks like.

These clear agreements help staff understand the standards you require. Letting people know what you expect of them underscores that effective leadership is a partnership.

Partner for Performance

Leadership isn’t something you do TO followers, it is what you do WITH them. With expectations clear, you now must assess what staff bring to the work. Are they learners or doers? You must teach and guide learners, and support and challenge doers. Adapt your leader behaviors to your follower’s task-specific needs.

Most importantly, stay connected, meeting one-on-one weekly to gauge goal traction, celebrate progress, and redirect if needed. Keep an eye on goals and tasks, as they typically evolve over time with changing requirements and customer needs. Regularly ask each direct report, “How can I help?,” then listen and respond.

New managers, follow these three steps, and you’ll build a trusting partnership with staff who perform well and love what they do.


Subscribe to Chris’ mobile updates, texted right to your smartphone! Text VALUES to 72000 or head here.


Chris’ new “Culture Leadership Charge” series and the rest of his video clips can be found on YouTube. Subscribe to Chris’ YouTube channel.


vimeo_logoChris’ new “Culture Leadership Charge” series and the rest of his video clips are also available on Vimeo. Subscribe to Chris’ Vimeo channel.


podcast_subscribeSubscribe to Chris’ posts via RSS.


itunes_subscribeListen to or subscribe to over 300 of Chris’ Culture Leadership Podcasts on iTunes.


The music heard on Chris’ podcasts is from one of his songs, “Heartfelt,” copyright © 2005-2017 Chris Edmonds Music (ASCAP). He played all instruments, recorded all tracks, and mastered the final product for your listening pleasure.

Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, Chris will receive an affiliate commission. Regardless, Chris only recommend products or services he uses personally and believes will add value to his readers. Chris is disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Top 10%: Deliver Performance AND Values

How can you differentiate your business from the many others that offer similar products and services in your market? How can you earn “provider of choice” status with your customers by being in their “top 10%” of providers? It isn’t about a flashy new marketing campaign or a spin on what your product or service does. It isn’t, in fact, about external communication at all – at least, not at first.

The secret to creating a sustainable business that creates passionate employees who exceed performance standards and consistently wow your customers is embedded in the graphic at left, which we call the “Performance Values Matrix.” This model is the core of Blanchard’s proven, award winning culture change process.

This model comes from Jack Welch, who, while President/CEO of General Electric, was the first corporate senior leader to formally hold leaders and managers in his organization accountable for both performance and values.

The model is a simple X-Y graph with the vertical axis representing PERFORMANCE and the horizontal axis representing the VALUES MATCH. The quadrants represent the four possible combinations of high or low performance and high or low values match.

Starting Point: Clear Expectations

The first step is to ensure that expectations are clearly defined and agreed to by all parties. That means all employees have formal performance plans that outline project, goal, and task expectations and those expectations are agreed to. In addition, it means that values are defined in tangible, behavioral terms, and those expectations are also agreed to.

The best place for staff (leaders, managers, supervisors, employees – everybody) to exist on this model is the upper right quadrant. That means they are meeting or exceeding performance standards and are consistently demonstrating desired valued behaviors. You should wildly praise and recognize the high performance, values aligned players that reside here!

A not-so-good place for staff to reside is the lower left quadrant. If they are here, it means these players fall short of performance expectations and do not demonstrate desired valued behaviors. What should you do with the “low performance/low values match” player? Lovingly set them free. Or, as WD-40 President Gary Ridge says, “Share those employees with your competition!” It is unlikely that time and energy spent to raise skills (to improve performance) and coach to modify behavior (to increase the values match) will pay off in the short run (or long run). It’s best to let these folks go work somewhere else. “Lovingly” set them free because the way you treat staff – those that are leaving and those that are staying – says more about your values than any published statement.

The bottom-right quadrant offers an interesting challenge. What should you do with the values-led players who are unable to perform? Train them, build skills, and even shift their roles to leverage their talents as required. You don’t want to lose the values-match! If they are unable to consistently perform in any role, then you need to lovingly set them free.

The upper left quadrant is where the most damaging players reside. The high performance/low values match players are poison in your organization. They exceed performance expectations (good!) while demonstrating a very different set of values from those you desire (bad!). What must you do with these players? Lovingly set them free. As fast as you can. Their existence in your organization erodes leader integrity and trust among staff and customers.

Accountability for both performance and values can occur only after expectations (for both) are clear and agreed to. It takes intentional effort to build the necessary foundation for applying this model and creating the high performance, values-aligned organization.

Once you have embedded the desired values and are delivering consistent performance, your customers will become a tremendous positive word-of-mouth marketing force for your business.

Client Successes: Profit, Service, Passion

Our culture change clients have enjoyed hard dollar benefits from our proven process, including increased profits, efficiency, product quality, employee engagement, and customer service rankings. They have also enjoyed reduced turnover and reduced conflict across their work environment.

To what extent does your organization hold staff accountable for both performance AND values? Add your thoughts to the comments section below.

How can we help you create a high performance, values aligned culture?


Subscribe to Chris’ mobile updates, texted right to your smartphone! Text VALUES to 72000 or head here.


Chris’ new “Culture Leadership Charge” series and the rest of his video clips can be found on YouTube. Subscribe to Chris’ YouTube channel.


vimeo_logoChris’ new “Culture Leadership Charge” series and the rest of his video clips are also available on Vimeo. Subscribe to Chris’ Vimeo channel.


podcast_subscribeSubscribe to Chris’ posts via RSS.


itunes_subscribeListen to or subscribe to over 300 of Chris’ Culture Leadership Podcasts on iTunes.


The music heard on Chris’ podcasts is from one of his songs, “Heartfelt,” copyright © 2005-2017 Chris Edmonds Music (ASCAP). He played all instruments, recorded all tracks, and mastered the final product for your listening pleasure.

Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, Chris will receive an affiliate commission. Regardless, Chris only recommend products or services he uses personally and believes will add value to his readers. Chris is disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Demonstrated ROI of Culture Change

When I meet with senior leaders to discuss the impact of culture on their business, I am not surprised to learn that many senior leaders don’t understand that powerful impact. I ask questions like, “What would the creation of a high performance, values-aligned culture mean to your business?” and “How would employees, customers, and stakeholders benefit?” Our discussions help senior leaders understand that they may not have much experience with a values aligned culture. Most are intrigued by the possibility.

However, there is nothing like demonstrated return on investment (ROI) to generate strong senior leader interest in our proven culture change process.

I have helped many organizations around the globe create high performance, values-aligned organizational cultures. The underlying principles of our process are simple: clarify performance expectations, define values in behavioral terms, and hold leaders and staff accountable for both. Implementing these principles is hard work over time, but the results can be astounding.

Our approach has a 10 year track record of demonstrated ROI. Here are highlights from select global clients:

  • ASDA – Since implementing Blanchard’s culture change process, this retail division of Walmart in the UK has been voted the number one employer of choice in a survey conducted by The Sunday Times. 80% of employees believe management listens to and understands their needs. In terms of sales and profit, the company has outperformed the whole of the UK retail sector for growth over a two year span, with profit goals well ahead of plan.
  • Banta Catalog Group – This catalog printing and distribution center outside of Minneapolis, MN generated significant benefits during the culture change process. Two years after starting the process, the plant found:
    • Profitability has increased 36%.
    • Within 6 months employee engagement improved 20%.
    • Employee Retention improved 17%.
    • Recruiting costs have decreased.
    • Training costs for new employees have decreased.
    • Employees actively look for ways to cut costs and improve the work environment.
  • Bowater Pulp and Paper – This newsprint manufacturer and de-inking facility had generated positive impact from a total quality initiative, but Patrice Cayouette, VP and plant manager, wanted to “engage employee’s hearts.” Blanchard’s culture change process helped the Bowater senior leadership team do that. Bowater has realized more than $50 million in cost reductions, health and safety records have improved, and employee satisfaction has risen dramatically. In comparative studies prior to and following the culture change initiative, employees indicated (among other positive changes) 20% improvement in quality being a priority; 40% increase in clarity of work objectives and responsibilities; 20% gain in employees having authority to make decisions; 44% in management follow-up to employee suggestions; and 24% increase in positive interdepartmental relations. In addition, the company has been named a Dow Jones gold medal service and quality winner for several years in a row.
  • Foodstuffs Auckland Limited – New Zealand’s biggest grocery distributor and retailer chose Blanchard’s culture change process to build on their successes and develop leaders at all levels of the organization to ensure focused growth in their market. Results from the program have been exceptional. Within the first year, ROI on the project has been over $600,000, a more than tenfold return on the training investment. In addition, participation, collaboration, ownership, teamwork, morale, and the inspiration to make a difference have all increased. Foodstuffs has achieved:
    • A 28% reduction in employee turnover within three months in just one supermarket
    • A 1% out-of-stock reduction, resulting in $100,000 additional profit
    • A reduction in delivered cost per carton of 9.5% through one of their Distribution Centers, resulting in $200,000 in additional profit
    • A huge positive shift in employee morale and attitude. One employee comments, “This has been extremely valuable; I want to pass it along to others. It provides the skills needed to have an impact in the workforce and turns values into behaviors and performance.”

These numbers are significant, and prove that Blanchard’s culture change process can have a real dollar positive impact on your business.

What is your experience? When you’re in a high performing, values aligned work environment, what ROI benefits have you seen? Share your insights in the comments section below.


Subscribe to Chris’ mobile updates, texted right to your smartphone! Text VALUES to 72000 or head here.


Chris’ new “Culture Leadership Charge” series and the rest of his video clips can be found on YouTube. Subscribe to Chris’ YouTube channel.


vimeo_logoChris’ new “Culture Leadership Charge” series and the rest of his video clips are also available on Vimeo. Subscribe to Chris’ Vimeo channel.


podcast_subscribeSubscribe to Chris’ posts via RSS.


itunes_subscribeListen to or subscribe to over 300 of Chris’ Culture Leadership Podcasts on iTunes.


The music heard on Chris’ podcasts is from one of his songs, “Heartfelt,” copyright © 2005-2017 Chris Edmonds Music (ASCAP). He played all instruments, recorded all tracks, and mastered the final product for your listening pleasure.

Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, Chris will receive an affiliate commission. Regardless, Chris only recommend products or services he uses personally and believes will add value to his readers. Chris is disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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