Leadership Memo 2024-8
In recent months, I introduced you to the most audacious corporate experiment in recent years: Dynamic Shared Ownership (DSO). DSO is Bill Anderson’s bold strategy to revive Bayer, the struggling German pharmaceutical giant. I’ve explained what DSO is, how it works and provided insight into the 57-year-old chief executive leading the movement. Now, let’s explore what it takes to make DSO a success.
Bayer isn’t the first major corporation to experiment with new ways of working. Another notable example is Haier, a global leader in consumer electronics and home appliances. Back in 2005, Haier’s CEO, Zhang Ruimin, took the radical step of dismantling the company’s traditional, hierarchical, top-down management structure. He replaced it with the “Rendanheyi” model, a bold approach to self-management. Based in Qingdao, China, Haier is now seen as a model of decentralization in the corporate world.
Of course, we’re more used to stories of companies that have tried and failed at decentralization. Take Google, for example—they notoriously experimented with self-management, only to abandon the effort abruptly. Then there’s Meta (Facebook), which announced plans to become more decentralized, but self-management ended up being blamed for a major restructuring.
These failed case studies show that organizational change is not just about adopting the latest trend. There has to be a greater purpose driving the transformation. For Bayer, their purpose is survival; without change, they risk becoming another corporate dinosaur.
However, self-organization or any agile way of working involves much more than just changing the organizational chart. It requires a shift in mindsets, behaviors, habits, rituals, and practices at every level of the organization. You can’t just erase decades of workplace conditioning and cultural norms. This journey is an ongoing process of fine-tuning and progress, not a final destination.
Adapting to a new way of working, whether it’s called DSO, Horizontal, Flat, Holacracy, Sociocracy, DAO, or something else, requires a holistic transformation. It’s not enough to flatten the hierarchy and remove managers. Employees must embrace a new mindset of increased autonomy and decentralized decision-making. Building the right supporting habits, rituals, and practices is essential for success. There is no one-size-fits-all approach; each organization must find the model that best aligns with its unique culture and goals.
What are your thoughts on a more decentralized organizational model like Bayer’s DSO? What challenges do you foresee Bayer facing as they make this shift? Leave a comment below and share with me. I’d love to hear your thoughts!
Latest happenings:
Trusted Magazine recently interviewed me and asked about my career path, the impact of agile practices on companies over the past two years, and successful agile transformations I’ve observed. We also discussed the key mindset shifts needed for companies to thrive in a rapidly changing world. If you’re curious about how to stay ahead of the curve and want actionable tips on maintaining adaptability, be sure to check it out!
