Leadership Memo 2024-6
In April, I introduced you to the most audacious corporate experiment in recent years: Dynamic Shared Ownership (DSO). DSO is Bill Anderson’s approach to fighting bureaucracy, the sinister force weighing on the company’s strategic options, and allowing his relatively new company, the German pharmaceutical goliath Bayer, to get back to the most important thing: value creation.
So, what is DSO? How does it work?
It is a new way of working where 95% of decision-making is in the hands of the people doing the work. This means fewer managers and layers. Employees from various departments are recruited to teams that decide on projects and work together for 90 days. Then workers regroup in different configurations for their next undertaking. These 90-day sprints by self-direct teams replace hierarchical annual budgets.
Bayer has also reassigned thousands of leaders, making some individual contributors and letting others go. The remaining managers have as many as 20 people reporting to them instead of the previous half a dozen or so. In return, many managers will unload some chores to AI like routine expense report approvals. These leaders are also working shoulder-to-shoulder with their charges on small-team projects.
Bayer already has hundreds of these teams with thousands of people working in this model, which they’ve coined Dynamic Shared Ownership (DSO). According to the 57-year-old chief executive, it’ll reach tens of thousands by the end of the year. Bill estimated that in the coming years, Bayer will operate 5000-6000 self-directed teams. “Rather than a lumbering corporation, Bayer will emerge as agile and bold as a startup–but one with operations in more than 100 countries. I’m convinced that this dramatic change will accelerate and unlock the value creation in each of our businesses.”
Whether it is a transformation that blows up like other corporate experiments or becomes a business landmark, only time will tell. But for sure, Bayer can’t continue with the status quo. “We don’t have to be that good to beat the current system,” Bill said. “That’s why the people of Bayer are all in for this journey, and we intend to make it count!”
Next time, we’ll analyze what it takes to make this work because DSO is not just an operating model, it is a mindset shift.
In the meantime, what do you think of DSO? Do you think Bill is crazy to undertake this radical change? What do you think Bayer’s chances of success are? Leave a comment below and let me know. I’d love to hear your thoughts.
Latest happenings:
I’m excited to announce the release of the latest episode in “Our Agile Tales” podcast series, “Money Matters”. In this new episode, we continue our conversation with Graham Scott, a Chartered Accountant, teacher, and author, tackling some of the most pressing financial questions every business faces, e.g. How do you know the value of the product you are making and selling? How do you calculate the potential ROI of an initiative? Are you investing in the right projects properly to generate revenue and profit? Tune in now and let’s bridge the gap between finance and other functions, using the universal language of numbers.
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It’s fascinating to see Bayer embrace such a bold experiment with Dynamic Shared Ownership (DSO). This shift towards decentralization and empowering frontline employees could indeed foster agility and innovation, akin to startup dynamics within a global corporation. While the scale and complexity of implementation pose challenges, Bayer’s commitment to change and value creation through teamwork and reduced bureaucracy is commendable. Exciting times ahead for Bayer as they navigate this transformative journey!
Absolutely! I can hardly wait to see how this turns out!
In case you’re not aware, I’ve posted more articles about Bayer, including what it takes for DSO to work and introducing the man behind this movement. I’ll end this mini-series with some early results of this audacious corporate experiment. You can read all those articles under the Topic: “Case Study”.