Loosen the Reins

Secret 4

Bike commuting "begins a process of calibration for the day," says year-round rider Tom Demerly, of TriSports.com     Photo: Photograph by Fredrik Broden

As Gary Hamel wrote in The Future of Management , his influential 2007 book on innovative strategies at top businesses, W. L. Gore & Associates (#16) is "a company built around a set of management principles diametrically opposed to much of modern business orthodoxy."

He wasn't exaggerating. Only a handful of Gore employees even have titles, and people work in small, self-directed teams, reporting to each other, not to a boss. At Gore, leaders are selected by their peers, and salary is based on rankings determined by a committee that gathers reports from staffers. Workers are encouraged to use half a day per week as "dabble time" to pursue projects. "You're able to leverage what you're good at to help the company be successful," says Brian Gallagher, who's worked in marketing at Gore since 2002. "It's awesome."

So why haven't more companies adopted this model? Hamel's conclusion: fear. Most executives tremble at the notion of handing over so much power. But that's not the case at Great Harvest Bread Co. (#43), which uses a unique "freedom franchise" model in its 209 licensed bakeries across the country. Ditching the traditional franchise strategy—top-down direction of cloned outlets—Great Harvest operates on a consensus basis, with any changes requiring the approval of an elected council. As CEO Mike Ferretti puts it in the company's blog, "Giving up control of your business is scary." But doing so, he says, will ultimately "cement the bond" with your team.

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