What happened when pharma giant Bayer radically simplified its management structure and empowered teams to run with new ideas? In just one example, a product team at Bayer brought a billion-dollar drug to market a year faster than was typical.
In this episode of Leaders at All Levels, learn how the 90,000-employee company transformed its culture from one marked by hierarchy and bureaucracy to one that chief catalyst Michael Lurie calls Dynamic Shared Ownership — a model in which thousands of entrepreneurial teams operate like self-managed internal startups. When DSO was implemented, management layers dropped from as many as 13 to as few as three in some areas. The company also ditched annual budgets in favor of dynamic shifts of resources to the teams creating the most value.
Among Lurie’s advice for other leaders who want to empower the organization’s teams:
- Create an aspirational vision that resonates with people enough to justify the change effort.
- Give teams real power. Bayer’s teams operate on 90-day cycles focused on outcomes, not KPIs.
- Transform leaders into what Bayer calls VACCs: visionaries, architects, catalysts, and coaches, who enable rather than control employees.
Most importantly, Lurie suggests, leaders should recognize employees as “fully formed adults” who can be trusted to design their own futures. When Bayer’s crop sciences R&D unit restructured itself, for example, it didn’t just reduce the number of managers from about 150 to 25 — the various teams within the unit cocreated a cross-functional customer- and product-focused way of working.
“You probably have more freedom than you realize,” Lurie says. Start experimenting within your team, and focus on creating value for customers.
Listen as hosts Kate W. Isaacs and Michele Zanini dig into how Lurie and other Bayer leaders changed employees’ focus from “what their boss expects” to value creation and innovation.
Video Credits
Michael Lurie is chief catalyst at Bayer AG.
Kate W. Isaacs is a senior lecturer at the MIT Sloan School of Management.
Michele Zanini is the director of MLab and coauthor of the Wall Street Journal bestseller Humanocracy (Harvard Business Review Press, 2020).
M. Shawn Read is the multimedia editor at MIT Sloan Management Review.