
This week, Bayer CEO Bill Anderson published a new article in Fortune, talking about Dynamic Shared Ownership ("DSO"), the company's ambitious de-bureaucratization initiative. Everything Anderson says about DSO sounds good and well. And it seems that everybody in the field is excited about what they are hearing from Bayer, including management gurus like Gary Hamel, who is aiding Mr. Anderson's efforts, conceptually. While others claim that consistent de-bureaucratization, or decentralization, as we call it, is impossible to achieve in large organizations, Bill Anderson is publicly authorizing it at Bayer. And with impressive clarity.
But getting this kind of transformation done is by no means simple. I can feel my inner W. Edwards Deming nagging me: Deming warned that a target is utterly irrelevant, and destructive even, as long as it is not paired with the right method for making it real. An objective without appropriate method, Deming taught us, will only lead to tampering, and to (more) management by fear. So the real challenge at Bayer now seems to match great intentions with appropriate method.
What we can see in the many well-produced interviews and surprisingly outspoken videos about Bayer's DSO is laudable goals and all the right intentions. Bayer's top brass deserves recognition for being very straight-forward about their intentions to bring about an organization at Bayer that's much less bureaucratic, less centralized, more self-organized, and more entrepreneurial – in the process getting rid of hurtful practices such as budgeting (which Mr. Anderson has highlighted as a superfluous, toxic ritual that has to end at Bayer). Few managers today express their faith in employees and their intrinsic motivation as clearly, and as consistently, as Mr. Anderson has done since the start of the campaign around DSO. His highly democratic, humanistic stance at management, and the clarity by which the DSO effort is articulated not just internally, but also publicly and almost politically, deserve the highest praise and it deserves our respect.
Now, of course someone like me who has been helping organizations to transform for self-organization and organizational democracy for more than two decades - since my stance at the Beyond Budgeting Round Table between 2003 to 2007 – it is also highly interesting to understand what methods Bayer is deploying to achieve its transformational goals. And here interpreting the DSO story gets a little more complex. We should acknowledge, first of all, that Mr. Anderson and Bayer are in no way obliged to disclose their transformation methods, or to publicly justify their actions. From the point of view of Bayer, it is intelligent and wise not to disclose any kind of "execution strategy." The challenge Bayer is facing with DSO is serious, and Mr. Anderson does not need external know-it-alls to educate him.
Still, for us as organizational development practitioners, researchers, and developers of method at the BetaCodex Network, the question of "how" DSO efforts are undertaken at Bayer are certainly interesting to analyze and observe. Especially as the company, which has more than 100.000 employees, intends s to "roll out DSO" to "all corners" of Bayer until the end of 2024. Which can be translated into: Very very quickly.
The good news is: DSO is possible. At Bayer and elsewhere
To de-bureaucratize and to work the system at Bayer (including elimination of budgeting and other obnoxious practices), the company needs to consistently apply organizational principles that are sufficiently coherent, sufficiently practical and sound: It needs BetaCodex principles. Bayer needs "knowledge", in Deming's words, or thorough understanding of decentralization and Cell Structure Design, in order to achieve more than just temporary flattening and de-layering of its bloated organizational structure. Bayer also needs a coherent understanding of performance systems without steering, to move beyond planning, motivating, individualization, steering and learned helplessness - an approach that we have come to call Relative Targets.
Finally, Bayer needs a transformation approach that allows to make all those changes in a very fast, time-boxed, invitation-based and democratic manner. In 2018, we identified five principles of Very Fast Organizational Transformation, such as invitation, time-boxing, and principled action. Currently, OpenSpace Beta is the best such approach to transformation available in the market. It is open source and it can be put to use immediately. If Bayer really wants to make DSO a reality within the year 2024, there clearly is no alternative to this kind of transformation "together with all the willing."
By combining the approaches of Cell Structure Design, Relative Targets and OpenSpace Beta, DSO can become a reality within a few months, if Mr. Anderson really, really wants this. Without this kind of combination of transformational, "DSO-fit methods", however, consistent results in the spirit of de-bureaucratization at Bayer (and elsewhere) will remain illusive.
Language makes reality. Which is why I would like to see a few words appear in, or disappear from Bayer's DSO work
Public communication around DSO certainly gives us a few clues about how the work around DSO is currently undertaken at Bayer. And here the 25 years of experience from the Beyond Budgeting and BetaCodex movements can prove helpful, in order to analyze possible gaps of awareness in current thinking at Bayer around the organizational transformation it aspires to.
Interestingly to me, neither Mr Anderson nor his executive team seem to use key words capable of substantiating a rigorous de-bureaucratization effort, such as decentralization, federalization or "periphery" (as opposed to "center"). Some details around the way that Mr. Anderson and his team describe the "future structure" also seem indicative: Bayer executives including Mr. Anderson apparently do not accentuate that in order for self-organization to unfold consistently, team size must be limited to a maximum of, say, 10 team members, in order to provide social density and make team-based self-steering highly effective. These words and accentuations currently seem to be absent from Bayer's communication around DSO, and I think that is a pity.
On the other hand, I wish a few words, or concepts would not be used in the context of DSO. Let me give you two related examples here. In various articulations of DSO principles at Bayer, the terms "employee-centric" and "meritocratic" appear. But these are terms from the realm of command-and-control, not of DSO. Decades ago, the great W. Edwards Deming labeled the concepts of meritocracy "destroyers of people". And he was right about that. Deming's crucial insight was that merit systems of all kinds, and driving individuals through goals and steering is a natural enemy of team effectiveness, self-organization and intrinsic motivation. Concepts like "people-centered" and "meritocracy" do not do justice to DSO's humanistic, democratic and economic ambitions.
The age of the outspoken, Beta-thinking CEO has arrived. That's a good thing
We welcome Mr. Anderson's stance at organizational democracy, de-bureaucratization, self-organization and faith in mankind's ability. In the last few years, few CEOs in this world have publicly articulated their commitment to Beta organization as consistently and as daringly as Mr. Anderson has. In doing so, Mr. Anderson is following in the footsteps or remarkable CEOs like Southwest Airlines' Herb Kelleher and Colleen Barrett, Handelsbanken's Jan Wallander, W.L.Gore's Terri Kelly, or Buurtzorg's Jos de Blok. We hope that more CEOs will follow suit, liberating their organizations of command-and-control management, and taking personal responsibility for it. We can only wish Bayer and Bill Anderson all the best for the corporate transformation that is at the heart of DSO.
Learn more about the BetaCodex approaches to organizational transformation
For introductory information and plenty of resources around Beta and Beta transformation, check out the BetaCodex Network website. For more about OpenSpace Beta, we recommend the OpenSpace Beta handbook, co-authored with Silke Hermann, and the openspacebeta.com web page.

You can find more about the other above-mentioned BetaCodex approaches on cellstructuredesign.com and relativetargets.com.
Get What would Deming do? - a new book from BetaCodex Press, with 160+ Deming quotes. Learn from one of the greatest minds of organizational theory and practice!

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