Why DSO might be the right destination reached by the wrong path
BOTTOM LINE Bayer’s Dynamic Shared Ownership isn’t wrong. The diagnostic sequence is. Harvard Business School is already writing the case study. The question they’re examining: “Could fewer bosses truly drive innovation, or was this an unsustainable gamble?” CIRCA-CLEAR suggests a different question: Is Bayer applying the right lever to the conditions it actually faces?
The Pattern
January 2024. Bill Anderson stands before Bayer’s board. Stock price at a 20-year low. Market cap eroded 40% in twelve months. Monsanto litigation bleeding billions. The prescription: Dynamic Shared Ownership. Flatten 13 management layers to 3. Push 95% of decisions to front-line teams. Replace annual budgets with 90-day cycles. Transform 90,000 employees into self-managing units.
Bold. Ambitious. Possibly exactly right.
But here’s what I’ve learned from 30 years of transformation work: identical-looking problems often require different solutions based on underlying conditions. The intervention that rescues one organisation destroys another. The difference isn’t execution skill. It’s diagnostic precision.
What to Observe
Bayer isn’t facing one turbulence condition. It’s facing five simultaneously:
- Insecure: 13,500+ layoffs since 2023. Post-Monsanto leadership trust deficit. Employees watching colleagues disappear while being told to “own the business.”
- Rapid: Management layers dropping from 13 to 3 in some areas. Company-wide implementation deadline: end of 2025. Two years to transform what Haier built over two decades.
- Complex: 160-year organisational history. Three major divisions. FDA and EMA regulatory oversight. Decades of acquisition-driven structural complexity.
- Contradictory: €2 billion cost savings target versus innovation mandate. Empowerment versus compliance requirements. “No compensation increases for 18 months” versus “retain top talent.”
- Anxious: Roundup litigation overhang. Patent expiry concerns. 40% market cap trauma pervading every decision.
DSO is an Agility intervention: self-managed teams, flattened hierarchy, rapid cycles. Agility works brilliantly for Anxious conditions—small wins, time-boxed decisions, explicit risk boundaries.
But Bayer’s primary conditions are Insecure and Contradictory. And applying Agility to Insecurity is precisely the diagnostic error that kills transformations.
| NOT THIS This isn’t an argument against self-management. Haier proved it works. Buurtzorg proved it works. Anderson himself led comparable transformation at Roche. DSO contains sound principles: decisions closer to customers, reduced bureaucratic overhead, faster market response. The question isn’t whether DSO is right. It’s whether Bayer has built the foundation DSO requires. |
Why This Matters
Trust breaks in days, rebuilds in months. When psychological safety erodes, the best people don’t fight—they go silent, then they leave. Insecure conditions kill flow not through technical complexity but through human fear. No amount of process improvement restores what only vulnerability, consistency, and time can rebuild.
Self-management requires people willing to take initiative, challenge assumptions, propose improvements. It requires psychological safety. It requires trust.
Bayer is removing management layers (which could be perceived as removing surveillance) while simultaneously conducting mass layoffs (which fundamentally destroys trust). The structural change intended to empower arrives alongside actions that terrify.
The Anderson Factor
Here’s what makes this genuinely interesting: Bill Anderson isn’t experimenting blindly. At Roche, he told executives there would be no budget. He led comparable agile transformation. He knows what works and what doesn’t in large pharmaceutical self-management.
This raises the stakes. If someone with Anderson’s experience still shows the diagnostic patterns CIRCA-CLEAR identifies, the challenge may be structural rather than executional—inherent to transforming organisations in crisis rather than a matter of approach.
| EXECUTIVE INSIGHT Bayer’s own HR leadership articulates exactly what’s needed. Janine Pajot, VP of HR at Bayer Canada: “Everyone in this organization has to feel free to be their authentic self—to feel they are safe and that they belong.” The question CIRCA-CLEAR poses: Is that safety being built systematically, or assumed to exist because the structure now permits it? |
The Safety Paradox
Pajot herself acknowledges the constraint: “This model is not for everyone. Your opportunities will be different, both personally and professionally.”
That’s honest. It’s also the signal. DSO requires a specific type of person willing to operate without traditional structure. But if the restructuring systematically removes those people while retaining those comfortable with the status quo, the structural change becomes cosmetic.
Quick Diagnostic
Ask yourself about your own transformation:
- Are you applying Agility interventions to Insecure conditions?
- Is structural change arriving before trust has been rebuilt?
- Are the people demonstrating genuine agility being retained or removed?
- Do contradictory mandates remain unresolved while you demand empowerment?
If you answered yes to any of these, your transformation may be treating symptoms rather than conditions.
What Comes Next
In Part 2, we’ll examine what Zappos learned about self-management that Bayer hasn’t absorbed yet—and why the precedent suggests this story has further chapters to write.
The transformation can’t be accelerated; it can only be begun.
Introducing the series The Case Study That Didn’t Make the Book
1) The Diagnostic Question Bayer Isn’t Asking
2) What Zappos Learned That Bayer Hasn’t—Yet
3) The Human Pulse Signals Published Metrics Can’t Capture
Some material is too good for the cutting room floor. This is that material.
Neil A. Walker is the author of Thriving in Turbulence: The CIRCA-CLEAR Framework for Navigating Organisational Change, available today on Leanpub and on Amazon on Thanksgiving Day. He has spent 30 years recovering failing transformation projects across financial services, government, and many other sectors.
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