Leadership Memo 2024-4
Imagine the challenges facing a US$50 billion multi-national company with a 160-year history: share price at a 20-year low (down 50% from a year ago), litigation, high debt, and losing patents on some of their most important products.
If you were the new CEO, how would you turn this around? What would be the most important thing to do? What would you consider to be the force that weighs the company down?
That is exactly the situation when Bill Anderson joined Bayer last June as the new Chief Executive Officer.
Sure, resolving the litigation, addressing the debt, and rebuilding the pipeline are the essential to-dos for him and his management team. But the most important thing, according to Bill, is “to get back to value creation”. The force that weighs the company down? Bureaucracy.
“There was a time for hierarchical, command-and-control organizations–the 19th century to be exact when many workers were illiterate, information travelled at a snail’s pace, and strict adherence to rules offered the competitive advantage of reliability. Today, the opposite is true. Our workforce is highly skilled and educated. Communication happens at the speed of light. And today, the most reliable companies are the most dynamic. A company’s value stems from its ability to innovate,” Bill said.
“To succeed, we need an environment where people and their ideas can thrive–not be stymied by red tape,” Bill continued.
The sprawling bureaucracy of corporations is “spirit-crushing” and a waste of human potential. In an organization with layers of approval chains and meetings that bleed into more meetings, many workers feel disconnected and tap out of the core business.
“Bureaucracy is like the wall that you can’t get past,” he says.
While we often hear talk about fighting bureaucracy, in companies and governments, rarely does anyone make lasting progress. The 57-year-old chief executive has been trying to understand this phenomenon for the past decade.
His solution? No re-organizing or streamlining of existing bureaucracy. Instead, throw out the corporate management playbook and blow the whole thing up!
Bill invites you to consider this question: If workers are hobbled by 1,000 rules, does it make a meaningful difference to reduce the rules to only 900?
That’s why most efforts fail, and why lasting progress requires eliminating all the rules and then starting fresh with a new approach.
And his fresh approach is the most audacious corporate experiment in recent years!
Labelled as ‘Dynamic Shared Ownership’ (DSO), 95% of decision-making is in the hands of the people doing the work. Employees will operate in self-directed teams that set and work on a new task for 90 days. Then teams regroup around a new set of goals. Bill estimates that Bayer in coming years will operate 5000 to 6000 self-directed teams.
Next time, we’ll delve into what DSO is all about.
How do you fight bureaucracy? Hit reply and share with me. I’d love to hear about your experience!
Latest happenings:
I’m excited to announce the launch of our latest “Our Agile Tales” podcast series, “Versatile Organization Design with the unFIX Model”. In this podcast series, we sit down with Jurgen Appelo, founder of the Agile Management Company and the author of several best-selling books, including Management 3.0 and Startup, Scaleup, Screwup, to explore the unFIX Model—a pioneering pattern library he authored—to empower organizations for dynamic change. Discover how this simple toolbox facilitates gradual transformation, dynamic team structures, and redefines the role of managers in today’s agile landscape.
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