Bayer CEO Bill Anderson has cut the company’s manager ranks by 70%, reducing them from about 16,000 to 4,500 in a company of 88,000.
He replaced hierarchy and annual budgets with 5,000 small teams working on 90-day cycles, and he said the leadership job is to set the vision rather than tell everyone what to do.
'We are putting 95% of decision making at the bottom, not delegating it down in the hierarchy,' Anderson said.
The company is now trying to move from survival mode to growth. Anderson said that for the last three years the ambition was 'basically, was to survive,' and asked how far Bayer can stretch itself to 'put out a bold ambition for what this company can be and fight for that.'
Bayer announced plans to invest $2.2 billion in a new Ohio manufacturing site last week. The company also stopped assigning sales targets, according to Sebastian Guth, its global COO, who wrote in Fortune that the change was part of the overhaul.
Investors have responded positively. Bayer’s stock is up 57% over the past year, compared with about 21% for BASF and 14% for Novartis, but it is flat over the past three years, versus 43% and 47% growth for those peers, respectively.
Anderson has also improved profitability and won a Supreme Court ruling that addresses liability claims predating his arrival. Fortune said the real test will be whether he can keep driving revenue and profit growth.
Anderson said giving people more authority does not automatically make them more willing to make hard calls. He said Bayer has a 'nice culture' that is 'a little softer' on 'courageous authenticity and decisiveness.'
He ranked his priorities in descending order as mission first, employees second, shareholders third, and senior management last.
The market has already voted on the early results. Bayer’s stock has rewarded the restructuring, but growth still has to justify the new structure. Flat organizations can be powerful when they sharpen incentives and push authority closer to the factory floor or the lab. They can also become an excuse for talking about transformation while the numbers stay stuck.
For investors and employees alike, the next phase is simple: prove that fewer managers, faster cycles, and a $2.2 billion manufacturing commitment can produce real earnings, not just a cleaner org chart.
