This company is getting rid of bosses, wants employees to manage themselves

Bayer is doing away with managers to reduce organisational costs

Bayer is getting rid of bosses. The German pharmaceutical giant has been struggling, with its market cap plunging to a two-decade low, and it hopes that drastic measures will bring about positive change.

According to a report in Fortune, Bayer CEO Bill Anderson is doing away with middle management and cutting out 99% of the company’s 1,362-page corporate handbook.

The move, Anderson hopes, will slash corporate bureaucracy and allow nearly 100,000 employees to manage themselves. By giving employees more control, he hopes to bring about greater innovation at Bayer – the company best known for inventing aspirin.

"We hire highly educated, trained people, and then we put them in these environments with rules and procedures and eight layers of hierarchy," Anderson said in an interview with Business Insider earlier this year. "Then we wonder why big companies are so lame most of the time."

Bill Anderson took over as CEO of Bayer in June 2023. When he became CEO, the company’s handbook on rules and procedures exceeded 1,300 pages – longer than the tome “War and Peace.” The feedback from workers focused on one thing: it’s tough to get anything done with so much management.

"They basically said: 'Increasingly, we can't get anything done,'" Anderson told Business Insider. "It's just too hard to get ideas approved, or you have to consult with so many people to make anything happen."

With that in mind, Anderson is getting rid of middle management in a plan he calls “dynamic shared ownership.” The plan will also have another advantage: it will cut organisational costs by about $2.17 billion.

In March this year, Anderson wrote a piece for Fortune magazine where he addressed the problem of hierarchy. “We have excellent people, with expertise in a range of disciplines and exceptional commitment to our success. But they are trapped in 12 levels of hierarchy, which puts unnecessary distance between our teams, our customers, and our products,” he wrote.

“At Bayer, we have begun a massive effort to redesign every job and every process, with a radical focus on customers and products. Most importantly, we’re putting 95% of decision-making in the hands of the people actually doing the work. This means many fewer managers and layers, and replacing hierarchical annual budgets with 90-day sprints by self-directed teams,” he explained.