An Analysis of Bayer’s Radical Move to Dynamic Shared Ownership

On Friday 10th February, German pharmaceutical goliath Bayer announced to the world that it would be embarking on a radical shift to a flatter structure, and an increase in self-managed ways of working across the organisation.

Although Bayer had made announcements prior to this February event, nothing had been released which detailed the how, why and what of their plans until now. 

Labelled as ‘dynamic shared ownership’ (DSO), the press event was to inform and educate not only internal staff, but to share to the world that Bayer was taking a new journey in how it operates.

Considering the announcement was so public, and that this is a huge organisation taking on such a contemporary evolution; it’s no surprise that Bayer’s journey has caught the attention of the global press. 

Here I want to break down what was shared in the press webinar (which you can watch here), and what it means for the realm of self-management. 

With CEO Bill Anderson now at the helm of Bayer, it was only a matter of time before he began to influence the organisation to become more agile and less bureaucratic. 

For those of you who have never come across Bill Anderson and his work as the former CEO at Roche, Anderson is a huge advocate for agile ways of working, and a fan of Laloux’s Teal principles. I’ve had the opportunity to hear him speak at Teal Around the World on a few occasions, and you can often find him speaking publicly on podcasts and YouTube channels about his beliefs in better ways of working. 

While at Roche, Bill Anderson shared publicly that he was encouraging experiments across the organisation to reduce unnecessary bureaucracy and make the company become more responsive. For those of you familiar with Erik Korsvik Ostergaard’s work – Anderson was very much creating ‘Teal Dots in an Orange World’ while at Roche. 

Something that does make Anderson easy to admire is his openness. Or it certainly comes across that way in his interviews. On the occasions I’ve seen him speak he has never held back about the challenges that have faced teams and organisations when attempting to try to shift their ways of working. Especially in larger, more corporate environments. 

As Bill Anderson was appointed CEO of Bayer in June 2023, it was a no-brainer that eventually his passion for agile would manifest into an organisational evolution. But I don’t think anyone could have put bets on it being as big an evolution as this. 

Personally, I would have loved to be a fly on the wall as Anderson encouraged shareholders to trust him in taking the organisation on this journey. It’s hard enough to sometimes bring teams on the journey, let alone those whose investments are married to the success of the company.

It would be easy to assume that Bayer’s adoption of DSO is down to the passions of a CEO, but of course there is always more to an evolution than just playing with a trend or accommodating the desires of a leader.

As well documented in the press, Bayer has been facing severe difficulties. In November 2023 the company’s share price dropped by 18% after the company halted trials on a new drug. This was alongside a pay out of $1.5bn to plaintiffs who blame Bayer’s product Roundup weedkiller for their cancer. The case estimated to be one of the biggest product liability cases in corporate history. 

It’s clear to see that stepping in as CEO at Bayer, Bill Anderson has his work cut out to turn things around and clean up the flailing pharmaceutical company. And the biggest part of Anderson’s strategy has now been revealed – cutting bureaucracy and transforming Bayer’s organisational culture. 

The manoeuvre to DSO aims to enhance Bayer’s agility and responsiveness, and ensure that the brand can withstand the complexities of a fast-paced market. 

If you’re still scratching your head about what DSO (dynamic shared ownership) really means, the truth is, it’s simply a more glamorous phrase for self-organisation. As in most alternative operating models this means reducing layers of management and bureaucracy, and giving teams greater autonomy and decision-making power. The conventional hierarchical model is replaced with a more flexible and responsive structure that enables teams to adapt quickly. 

Now Bayer aren’t going this alone. They’ve hired one of the world’s most influential thinkers, and esteemed author, Gary Hamel. You may recognise Hamel’s work from his bestselling books “Leading the Revolution”, “The Future of Management” and “Humanocracy”. 

Hamel has spent his career at the intersection of theory and practice, challenging conventional wisdom and fostering innovative management practices. He argues that the traditional hierarchical models of organisation, characterised by rigid structures and top-down decision-making, are increasingly obsolete in today’s fast-paced, innovation-driven world. Hamel advocates for a more dynamic, flexible approach to management, where power is distributed throughout the organisation, and every member is empowered to take initiative and make decisions. This model not only accelerates innovation and responsiveness but also enhances employee engagement and satisfaction.

Partnering with a leader in the new work space such as Gary Hamel shows that Bayer are taking their DSO transformation extremely seriously. And as any company will tell you who has taken the evolution to more self-management, you can’t go it alone. 

During the press conference Hamel kicked off the session explaining why it was necessary for Bayer to take this journey. Sharing many snappy one-liners worthy of a t-shirt, Hamel described the “systemic disabilities” that so many organisations face when they’ve become slow to adapt. From “ambition deficit disorder” , to “safe targets over stretches”. As Hamel hit home, too often “change programmes are catchup programmes” – companies don’t ask themselves – “are we changing as fast as the world around us?” 

The answer is, they’re not. 

To some, hearing the news of such a large corporation such as Bayer taking on alternative ways of working will sound like business lunacy. But they’re not the first. 

Haier, a global titan in the consumer electronics and home appliances sector, stands as a paragon of decentralisation in the corporate world. With its roots deeply embedded in Qingdao, China, Haier has revolutionised the traditional corporate structure, embracing a radical approach towards self-management and decentralisation for over a decade. This transformation began in earnest around 2005 when Haier’s CEO, Zhang Ruimin, embarked on an audacious journey to dismantle the hierarchical, top-down management structure, replacing it with what is now known as the “Rendanheyi” model. 

(Intrigued – this video by Corporate Rebels gives a great insight into how they work.)

Of course others have also tried to shift into new ways of working and failed. 

Google notoriously played with the idea of self-management before it came to an abrupt end. And famously, Meta (Facebook) announced their own ambition to become more decentralised, only for us all to discover self-management had been used as the scapegoat for a major restructuring. 

But as with any organisational shift, it’s not simply about adopting the latest trend. As many of the failed case studies demonstrate, there has to be a greater purpose in your evolution. 

Bayer has their greater purpose. Without changing, they could become another corporate dinosaur. 

As a culture coach passionate about self-management, I should be jumping for joy that yet another company is putting alternative ways of working into the spotlight. But I’m human, and I have experience in understanding the weight of this journey, so there are things I want to highlight. 

Self-management is more than an operating model – it takes mindset

Too often self-organisation, or any decentralised way of working for that matter, gets the simplistic label of just being about structure. Flattening the hierarchy and getting rid of managers. Nope, that’s not even half of it. 

Adapting to a new way of working no matter what you label it; DSO, Horizontal, Flat, Holacracy, Sociaocry, DAO etc; you have to work on more than just reforming the organisational chart. You also have to work on mindsets, habits, rituals and practices. 

Even starting with the mindset shift, it’s a huge change in how people work and show up in a culture that’s now more decentralised, and where autonomy has now increased. You can’t just wash away decades of workplace conditioning and cultural norms. This journey demands a shift in mindset and behaviours at all levels of an organisation. 

As much as I admire Bill Anderson and his goal to turn around a Bayer, he made some bold claims in the press event – “we know this will be 100% successful!” 

Yikes – that’s bold. And the truth is, Anderson cannot know this for sure. My question back to him would be – how do you know it’s going to be successful? 

Any coach, consultant or expert in change will tell you that there is never any way of knowing what you work on will be 100% successful. Why? – Because people and the world are complex. It’s not a maths puzzle with a simple equation. Every company has to find its own footing. Hence why there are so many rich varieties of self-management in existence. There is no one-size fits all approach. 

Besides, there’s also never an end destination. Every company who embarks on this journey will tell you that it is a constant exploration of fine-tuning and progress. Are we doing better? 

Doing self-management ‘with’ or ‘to’ people 

How you roll out self-management, or any new way of working is always up for debate.

Some believe that teams should learn about what this way of working involves and then vote on it as a collective – making the choice together. Others believe that sometimes the last autocratic decision of leaders is to decide on behalf of the company. There are fors and againsts for each camp, and sometimes there’s a blend. Each company will have its unique story of how they started their journey. 

As it appears in Bayer’s case, Bill Anderson has made this decision. I’m sure he’s probably consulted with other leaders and shareholders, but ultimately this is a top-down decision. 

This first act in itself will start the journey, because either people will fight against this decision, or get on board. And there will be people feeling both. How Bayer supports teams and individuals to go through this change will set the tone for what comes. 

With Bayer embarking on DSO, could we see more large corporations consider adopting more agile, collaborative and flat organisational structures? – Only time will tell. 

The fact is, large behemoth organisations are struggling. They’ve become tied up in knots with their own bureaucracy, slow to respond to market changes, and overwhelmingly out of touch with their customers. Is it any wonder that consumers have become disenfranchised and employees disengaged? 

The domination of rigid hierarchies is in decline, and the emergence of agile organisations who are flatter and more collaborative is on the rise. Let’s all hope that Bayer sets a precedent that more will follow, otherwise we could have another self-management autopsy on our hands – and that will be sad for us all.