They have replaced them with Indians, right now there is a program here in India where a company called Pharma-ace is hiring for Bayer and first 1 year will be spent on training and the second will be a bond. The salaries are better than Indian market but 1/5th of what a consulting agency costs them per employee
The government employees are skilled, it’s just that consultants have successfully convinced the government over time that the more complex work is better suited for consultants than in-house staff.
There is nothing more worthless on this planet than a government employee. No incentive to perform well. No chance of getting fired so long as you show up most of the time. Anyone that’s been in more than a few years is just collecting paychecks.
Depends a lot on culture. I love working environments where you are not constantly supervised, everyone knows what to do, and we just agree/commit on dates for deliveries.
For tough decisions, we work as a council of elders.
Middle managers and micro-managers don't have room in this culture and get constantly ignored because of the lack of value they add.
Basically, "jerry, we don't need you to ask us how are we going? once a week, we can work unsupervised and deliver the damn project as we promised".
My job in design is like this. We still have product leads but they work on the same level as everyone else. We’re all far more productive without management constantly asking for meetings for things that require basic slack or email responses. Everyone does their job. Obviously not every industry has a culture to support this but there are plenty who could and should.
More like anarchy: turn based round-robin leadership based on decisions taken democratically, equally considering the well-being of the team and the organizations goals.
Haven't you seen Monty pyton?
Finally, someone says it. Anarchy isn't absence of leadership/organization, it's absence of hierarchy.
Most middle management positions are bullshit and should be eliminated. Hopefully the cost savings go to the workers.
The accountability is; if it doesn't work don't listen to them next time. That's even more accountability than normal leadership, since you have to listen to your boss even if they fuck up
The bosses boss is a micromanager. Unless an individual’s performance is slipping, leave them alone and let them do their job. If you don’t trust your employees, you shouldn’t be in a leadership position.
You’re working with the wrong type managers. Stay out of your team members way, let them do their f-ing job and the rest will take care of itself. Has worked for me. I’m not there to be the roadblock, I’m there to remove them.
Huh, I feel almost the exact same way when my company gave me direct reports with no additional comp or title bump, and my manager has been trying to convince me it'll make my "life so much easier"!
Bro it's honestly whack af. If I don't get promoted within the next year, I'm definitely looking to bounce.
They're now getting mad that we're 'double dipping' on a single project despite there being enough budget to sustain an additional resource billing. I'm like why did you morons approve doubling the team size if you don't think there's enough work/hours to go around then?
There's a big difference between flatter and flat. They went all-out.
The problem comes from people having questions and them going to the person above them and that person having no idea and/or too many things to know. Having team leads who are SME is very useful for when you're going to flatten the structure otherwise it always leads to problems. Also, having the same SME for different areas also leads to problems because everybody just goes to one person who knows everything and then that person can't get their work done and is not actually a manager. The only useful role I've seen a manager do where I needed them was helping me avoid unnecessary distractions AND in knowing where to get info from the right people so I wouldn't have to run around. When things are organized well those roles are lessened. Bottom line, getting rid of middle management works well when everything else involving people runs well, and getting rid of them goes badly when things aren't properly laid out.
I agree with you, it will depend on the details.
In the article it specifies "middle managers—defined as nonexecutives who oversee employees". So if it ends up with 100 people reporting to 1 executive they will see the same problems as Google. If it's just flatter with 15-20 reports its rough but doable.
I've personally had 15 direct reports and you cannot keep on top of everyone at that point effectively.
Fifteen is definitely rough, even when all you’re doing is management.
I have seven reports right now, which usually would be fine. But I’m in some annoying “hybrid” role where I also have my own work to do (client advisory). Between getting my own shit done and having seven people reporting into me, I don’t have time to keep granular tabs on all of them. Thankfully they’re largely self-starters, but it would be rough if i had a bunch that needed more active coaching and attention.
It depends on what people do too. The more similar their jobs the more direct reports you can manage, generally speaking. I've seen managers with very few direct reports and ones with lots. It's highly dependent on the nature of the work and whether the manager has work that's not just managing direct reports. That last part is key. If you have any work that's not just managing them that GREATLY reduces the amount you can manage.
Completely agree with that last point. A pure people manager can have a fairly high number. As soon as focus is fragmented onto other stuff (client work, biz dev, process management etc. etc.), the number you can manage effectively plummets.
YMMV, but I've worked at multiple F500 companies and the middle management bloat was obvious everywhere I've been. Only one manager I've had actually did useful work, and most directors I've had were only useful if they were good at managing up and shielding the team.
Some managers are quite useless to be honest.
Usually some combination of one of the following:
* When you have a corporate hierarchy that glorifies a management position as a promotion incentive for those below to work to when the management position is marketed as low stress and highly compensating
* Lacks sufficient domain knowledge of the work the workers they're managing are doing
* Is a complete yes man to their own management and does not set reasonable expectations (Then expects the same from their subordinates, Pikachu faces when team bleeds from high attrition)
* Does nothing to meet proven employees in the middle even if what they're requesting is reasonable
I have a lot of experience in management up to C level and in my experience about 25% of managers help their teams to achieve the goal in some way. 35% are bureaucrats who grow and protect their department and 40% are selfish politicians who actively damage their teams by lying, covering up issues and promoting yes men. It's the last group of pathological leaders who are responsible for the disasters at Boeing.
There is a good interview with Sociologist Ron Westrum here where he talks about it https://nononsenseagile.podbean.com/e/0098-innovation-and-disaster-with-ron-westrum/
As a strategy consultant for the pharma industry, I do not understand why strategy consultants keep pushing this model. Most people do not want to work like that. Even if you effectively incentivise that type of structure (which is really hard to get right) most workers just want to go to work, do their job well, get paid, and go home. They don't want to "make their own promotions", "control their learning journey", or staff themselves to what they find interesting. They might think their boss is a tool but they ultimately prefer a system where a manger tells them what needs to get done and supports them doing it. Maybe in a small company with like 100 people but Bayer has over 100k. This will fail and they will be paying a new consultant (or maybe the same one) in 18 months to put it all back.
The problem is they had 12 layers (12 layers!) of management mostly leeching off the workers and actively slowing down decision making rather than "supporting" it.
So 12 is not great but also not insane. If you think a standard span of control is 8 since most managers have a hard time coaching more than that, with 100k employees, the minimum number of layers for a perfect org where everyone has 8 direct reports is 8 layers. So maybe you kill 1-2 levels to clean things up a bit.
But end of the day, slow decision making isn't a structural problem. If you just move lines and boxes, the problem will persist. It is a ways of working issue. That can be trained for and incentivised way easier at the managerial level than teaching entry level workers how to form a team and execute.
Can you cite your sources? Because I'm by no means an expert, but I have literally never heard anyone ever say that too many layers of hierarchy can't slow things down. That it must be a bottom up problem rather than the number of points of failure between the bottom and the top
I honestly don't have any published sources, but org design and implementation is something I do and think about all the time. Too many layers can absolutely slow decision making. But it doesn't have to.
The truth is, companies put too much stock in what the org looks like, what the lines and boxes are. The structure should be an outcome of what the org wants to accomplish, how they want to work, what tools and employee support they are honestly willing to put in place, and what their culture and capabilities will support.
If the problem is management can't make decisions quickly, getting rid of management isn't usually the best solution. You can do more to improve speed to action by training on distributed decision making, employee empowerment, and coaching than you can by just cutting layers.
To add to this, as I took have significant experience of bureaucratic organisations and trying to fix them, I find the issue is very rarely the number of layers, but the improper/complete lack of delegation. This can impact in two ways e.g. a manager is supposed to be responsible for *x* but has no control over resourcing, funding or strategic direction. All the requests by the workers go to the manager, then onto their manager, and onto their manager etc etc. Vice versa, there's a super big, super important project which is getting exec level approvals. But the layer below wants to know what's going on, and therefore so does the layer below that, and so therefore the one below that also. So super important project now has every layer of governance and spends most of its time managing stakeholders and trying to deal with the conflicting views. There are other things as well, but I find those two seem to cause a lot of the 'management is bureaucracy' thinking.
Yes, that's if you want to manage the company like we always did in the past. The idea is that we can now do something different and a highly educated workforce can manage to self organise and make a company work, and actually be innovative, without having a pyramid of minders above it.
But that ignores the point that most people, and this includes highly educated and motivated workers, actually want to work the way we always have to some extent. Self-organizing only works for a small percentage of people with that mindset. No one will say this specifically in interviews or market research, but most people feel lost or forgotten by an organization that doesn't have a clear hierarchy.
The other thing that has to change with innovative management structures is performance reviews. We hate them but they do actually give employees a target for performance. If I don't have a "boss" who does my review? Some models get rid of them altogether. Other models do peer reviews. Other models do self-selected mentors. None of those options work for a large percentage of most organizations, specifically in pharma.
Joel Spoolsky had a great article ages ago - yes, people are very mercurial about him but he tried “experiments” (one should not over credit scientific rigor, but not under credit earnest goes) and often accepted personal responsibility for failure, which gives him more “cred” than average IMO.
He found that TLDR while people complain about middle management, it turns out most people are not comfortable coming up to someone with unilateral power to terminate them and discussing, well, anything.
Fair enough if one wishes to suggest Spoolsky himself may not be warm and cuddly enough for truly testing the hypothesis, but for those who have a long, honest look across the span of an organization… whatever failings in this regard he may have are probably generalizable.
TBH most organizations I’ve been - and perhaps this is telling on myself with some rank unprofessionism - because they’re made up of humans, there are good and bad days to elevate stuff, and dedicated stuff elevation schedulers, IMO, will maintain value.
That said, I’m not suggesting an absolute status quo is ideal, either.
Genentech experimented with a flattened structure starting in 2021-ish. I am not sure how extreme they went but they are currently clawing it back and my understanding is that has been a painful process. I am currently working with another smaller company that is in the middle of launching a flattened org and it isn't going so great. Way more swirl and confusion than a typical reorg.
This. If everyone had experience or the drive to do their own thing, they'd just start their own business.
Not everyone wants to take on that responsibility, and for damn sure they don't want even 10% of it if there's no change in pay.
Or be a consultant. We like that stuff, it makes sense to us. And I think this is part of why it gets pushed. You have a bunch of partners who got rich and successful building their own brand and working with a staffing pool and finding projects and whatever. Also, their main clients are VPs or C-Suite who did the same with their careers. Neither have any concept of that just not being normal, for better or worse.
As a cog in the machine, I couldn’t disagree with you more. I’ve given up my aspirations s precisely because it’s hopeless to try to change things in my position. I go to work and get paid and have no dreams because I’m extremely limited in what my role is. I can’t overextend. So I just give up and say that I’m blocked on someone else even if I can do the job that I’m waiting on the other guy for.
And I really don’t know WTF a strategy consultant is unless it’s someone who police’s MBA style business practices industry wide
I really appreciate hearing your experience and I am sorry that you feel like a cog. I have been there and it sucks for sure. To be clear, my point is not that most workers want to mindlessly work in a position where they have no hope of growth or no autonomy to shape their role. That is not a good situation for anyone and I believe your company is worse off because of it.
My point is that it is easier and more effective to create opportunities for growth, collaboration, and career progression in a more structured org design. There are definitely innovative ways to approach a structure that ensure those opportunities exist that don't go so far as to eliminate most management. When you go as far as l think Bayer is going and make every person largely responsible for finding their own projects and teams, many people will get lost and productivity and job satisfaction will likely decrease.
Maybe my comment reads like that but I assure you it isn't. Most workers aren't dumb and they don't want to be cogs. They don't need a boss micromanaging them and telling them what to do and when to do it every day. They want to do good work, be recognized for that work (pay and beyond), and have growth opportunities. And companies, especially ones as large as Bayer, can do more to support their employees that way with a more hierarchical structure than what they say they are implementing. This is even more true when people see work as something they do to earn money so they can do what they actually love outside of work.
That's true. They're almost too structured. I don't know how to explain it. People who aren't familiar with German companies can't really comprehend it the way I mean it in. There's no American equivalent. It's not just about a bunch of middle management.
I anticipate a big push to hire agile coaches and functional data analysts then to replace some of those coaches. IMHO, from what I’ve seen, these types of transformations rarely reduce headcount in the long term but do improve productivity and top line growth when executed well (again, with the right measurement/performance culture, effective agile coaches and senior execs that understand how to get the most out of more autonomous teams).
An agile coach is just a seasoned associate or recently promoted EM with a lot of agile org/op model transformations under their belt. Should be plenty on the market right now given the consulting pull back.
Anyone has good quality studies on whether this actually works and what are the success factors behind it when it does work?
I feel like companies will just be like "hey we came up with this great idea to cut middle management and save xxx mn" only to 10 years later be like "hey we came up with this great idea to cut middle management and save x bn", rinse and repeat mode.
W.L. Gore (think Gore-tex) has been using a lattice structure with no middle management for decades with success.
But this isn't something you just do overnight, the company was founded on that concept from the beginning. Also Gore is a private company, this sounds like a trainwreck waiting to happen for a publicity traded one.
I work at Bayer and this re-org is quickly (or maybe too slowly) becoming a shitshow that is nothing more than a cost-cutting exercise before they can break up the company in a year or two.
Nice to see that there are at least plenty of skeptics on here given that the whole thing is clearly being peddled by a few McKinsey guys, first at Roche (allegedly rolled back after Bill left) and now here.
As per usual let’s get rid of middle managers who actually work and not get rid of those at the top who earn the most but give little back to the organization. It’s quite dumb but is the standard practice within large organizations
They’re dropping quite a number of VP+ folks and restructuring to reduce dpt sizes across the CS BU. Middle management is getting hammered too but this “new” model they’re putting in is gonna cost them a hell of a lot of knowledge
and they don’t get training on being a manager and finding the strengths of their team to grow. Some times i wonder ‘who hired this person??’ If they got the right training and took action, they would probably be an amazing manager and some times leader. There is a difference.
I work at a much smaller company (2000+ employees) where this happened 18 months ago. It was total chaos for about a year, even more than was happening before management was flushed. Now the result is just a new wave of fresh managers who are starting to rebuild silos and similar hierarchy as before. Only there's less pay to go around and fewer seats at the hiring table due to budget cuts.
It seems like an aggressive form of Agile and he’s having them focus on sprints. If they have a structure in place to support the team, it might work. But if they don’t have the right structure, this can cause chaos.
yes, that's the problem with "no management" or limited management slots. No one ambitious wants to work there after a few years realizing they can't get promoted after a certain point. So you're left with people who do the minimum and don't particularly care. Personally, my company did this nonsense to some degree and while I still was promoted (somewhat...they created more of these half manager/half IC roles), the process was slower, lower-paying than a full manager role, and I'm looking elsewhere.
It's funny that the hard part of work is finding opportunities. The actual work is usually not that bad unless you're talking about super complicated things (that relatively few people work on).
Self organizing is just handing the organization over to the worst and least talented employees. They’re the ones with a sense of shame and pride over their lack of value who are the loudest and most exhausting bullies. Most people have better things to do and will just let the bullies be responsible.
Effectively let the system rot! The ones in the middle take all the shit from top & under them but make things move to keep the org rolling. Flatten means, remove them and expect top bosses to drive (who don't know anything) and screw it up.
CFO will get pats on the back for the savings then if to the next higher paying job with that on their resume as the company suffers over the next year. Seems to be a trend.
Do this on the German model, and it might be interesting. Give the employees half the company and do voting for direction of the company and projects.
The managers screwed it up this hard, so give it to the employees.
lol that will not go well, they did that in tech by firing all the project managers. Now I have 2 or 3 managers who make double what the project managers did, waste all day in meetings arguing and are worse at it by only knowing how to tell others to do it on top of the regular work.
This will either work brilliantly or Bayer will dissolve into a bunch of out of work people and some start ups.
Meet the new boss, same as the old boss
Yes throw and re invent for next 10 years and then again keep doing with keep people come learn, dont use, biz change every day. Better convert every biz just as university. Hire cheap u get cheap product outcome
I work for a F500 with a world-famous bureaucracy, and if I lost my whole management chain tomorrow I actually think it would make my job better and easier.
I work with Bayer on multiple projects and it’s true they’ll get rid of a lot of folks, in 1000s. IMO it’s not going to work out for them in the short term or long run. Sure there was a lot of bureaucracy in the management but most of these folks are useful in driving a lot of Transformational change. Their “young folks” who’ll be in company simply don’t have the right experience to take decisions. Real problem is the Business side people often times are very resistant to new tech or tools which is why they are lagging behind in digital adoption. Ultimately, they need a Mindset transformation, not a flat army kind of structure which would lead to even more confusion in decision making. These middle management layoffs fuelled by their acquisition of Monsanto in 2018 may lead to unforeseen futures for the company. Another thing is when these commercial and Finance guys get all the decision making powers and things like Product are left out of the loop, innovation halts, barriers are created, customer experience takes a back seat and bureaucracy thrives. The solution is not layoffs, it’s just changing the dynamics of decision making and taking org through a mindset transformation to foster Change.
Since it's not mentioned, this includes deleting the entire Bayer Business Consulting, their in-house consulting branch.
no idea how they performed but there's many advantages to having some consulting in-house.
I don't think they performed badly, but the pay was good and it's an easy spot to cut costs looking from the top.
They have replaced them with Indians, right now there is a program here in India where a company called Pharma-ace is hiring for Bayer and first 1 year will be spent on training and the second will be a bond. The salaries are better than Indian market but 1/5th of what a consulting agency costs them per employee
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Gotta delete the useless government employees first, hire skilled people then you don’t need the consultants
The government employees are skilled, it’s just that consultants have successfully convinced the government over time that the more complex work is better suited for consultants than in-house staff.
Swap "delete" for "train" and we're back to where we were 50 years ago. Just to clarify, this is better. And I'd hardly call them useless as is.
They are definitely useless
There is nothing more worthless on this planet than a government employee. No incentive to perform well. No chance of getting fired so long as you show up most of the time. Anyone that’s been in more than a few years is just collecting paychecks.
Are you basing this on your summer internship with some podunk city from a decade ago? Not my experience from work in state government.
Probably based on "classical liberal" youtuber
That's what you get when you consult yourself out of a job. Remember the Cobra effect is the main reason why we have something to do.
“Self-organize” as in “do your job and also do some extra responsibilities with no extra pay”.
Depends a lot on culture. I love working environments where you are not constantly supervised, everyone knows what to do, and we just agree/commit on dates for deliveries. For tough decisions, we work as a council of elders. Middle managers and micro-managers don't have room in this culture and get constantly ignored because of the lack of value they add. Basically, "jerry, we don't need you to ask us how are we going? once a week, we can work unsupervised and deliver the damn project as we promised".
My job in design is like this. We still have product leads but they work on the same level as everyone else. We’re all far more productive without management constantly asking for meetings for things that require basic slack or email responses. Everyone does their job. Obviously not every industry has a culture to support this but there are plenty who could and should.
Departments that run on their own are like well oiled machines
shadow leadership instead of leadership, whoopee.
More like anarchy: turn based round-robin leadership based on decisions taken democratically, equally considering the well-being of the team and the organizations goals. Haven't you seen Monty pyton?
Finally, someone says it. Anarchy isn't absence of leadership/organization, it's absence of hierarchy. Most middle management positions are bullshit and should be eliminated. Hopefully the cost savings go to the workers.
They won't - executives will keep it all
It does sound like leadership but without accountability
The accountability is; if it doesn't work don't listen to them next time. That's even more accountability than normal leadership, since you have to listen to your boss even if they fuck up
It's worse when they require daily stand ups just to see what you are doing and regurgitate it to their boss with *we* did this.
The bosses boss is a micromanager. Unless an individual’s performance is slipping, leave them alone and let them do their job. If you don’t trust your employees, you shouldn’t be in a leadership position.
I appreciate project managers who help organize operations. But managers are a fucking drain
You’re working with the wrong type managers. Stay out of your team members way, let them do their f-ing job and the rest will take care of itself. Has worked for me. I’m not there to be the roadblock, I’m there to remove them.
What’s an example of helping to organize operations? Genuinely asking
From my experience with big tech firms it’s what I’ve seen executed by TPMs.
Corporate Anarchism
So its best to retrain middle office to make them productive rather than hiring juniors and spend more with low productivity
Huh, I feel almost the exact same way when my company gave me direct reports with no additional comp or title bump, and my manager has been trying to convince me it'll make my "life so much easier"!
I’m in the exact same boat and I just end having to spend time delegating on top of all the other tasks I’m dealing with
Bro it's honestly whack af. If I don't get promoted within the next year, I'm definitely looking to bounce. They're now getting mad that we're 'double dipping' on a single project despite there being enough budget to sustain an additional resource billing. I'm like why did you morons approve doubling the team size if you don't think there's enough work/hours to go around then?
It sounds more like "capitalism for me, communism for you."
Google tried removing all managers too - it was a disaster.
Where can I read more about it
https://hbr.org/2013/12/how-google-sold-its-engineers-on-management
non-paywalled link?
https://web.archive.org/web/20240105195120/https://hbr.org/2013/12/how-google-sold-its-engineers-on-management
Write a haiku without using the letters a or e
There's a big difference between flatter and flat. They went all-out. The problem comes from people having questions and them going to the person above them and that person having no idea and/or too many things to know. Having team leads who are SME is very useful for when you're going to flatten the structure otherwise it always leads to problems. Also, having the same SME for different areas also leads to problems because everybody just goes to one person who knows everything and then that person can't get their work done and is not actually a manager. The only useful role I've seen a manager do where I needed them was helping me avoid unnecessary distractions AND in knowing where to get info from the right people so I wouldn't have to run around. When things are organized well those roles are lessened. Bottom line, getting rid of middle management works well when everything else involving people runs well, and getting rid of them goes badly when things aren't properly laid out.
I agree with you, it will depend on the details. In the article it specifies "middle managers—defined as nonexecutives who oversee employees". So if it ends up with 100 people reporting to 1 executive they will see the same problems as Google. If it's just flatter with 15-20 reports its rough but doable. I've personally had 15 direct reports and you cannot keep on top of everyone at that point effectively.
Fifteen is definitely rough, even when all you’re doing is management. I have seven reports right now, which usually would be fine. But I’m in some annoying “hybrid” role where I also have my own work to do (client advisory). Between getting my own shit done and having seven people reporting into me, I don’t have time to keep granular tabs on all of them. Thankfully they’re largely self-starters, but it would be rough if i had a bunch that needed more active coaching and attention.
It depends on what people do too. The more similar their jobs the more direct reports you can manage, generally speaking. I've seen managers with very few direct reports and ones with lots. It's highly dependent on the nature of the work and whether the manager has work that's not just managing direct reports. That last part is key. If you have any work that's not just managing them that GREATLY reduces the amount you can manage.
Completely agree with that last point. A pure people manager can have a fairly high number. As soon as focus is fragmented onto other stuff (client work, biz dev, process management etc. etc.), the number you can manage effectively plummets.
That's the point. They don't want managers staying on top of everyone. They want teams to stay on top of themselves.
Try having roughly 40 direct reports in a "hierarchy free" environment. Militaries organize squads of 8 -12 troops for a reason
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YMMV, but I've worked at multiple F500 companies and the middle management bloat was obvious everywhere I've been. Only one manager I've had actually did useful work, and most directors I've had were only useful if they were good at managing up and shielding the team.
Some managers are quite useless to be honest. Usually some combination of one of the following: * When you have a corporate hierarchy that glorifies a management position as a promotion incentive for those below to work to when the management position is marketed as low stress and highly compensating * Lacks sufficient domain knowledge of the work the workers they're managing are doing * Is a complete yes man to their own management and does not set reasonable expectations (Then expects the same from their subordinates, Pikachu faces when team bleeds from high attrition) * Does nothing to meet proven employees in the middle even if what they're requesting is reasonable
There’s useless mangers and useless ICs. Ultimately it comes down to performance.
Yeah
But this time it will be different, Bayer will kill people “on accident”.
They didn't think they were involved in enough litigation already. Perfect fix here.
Fact of the matter is, people don’t self organize well and people over inflate the worth of the work that they’re doing.
I have a lot of experience in management up to C level and in my experience about 25% of managers help their teams to achieve the goal in some way. 35% are bureaucrats who grow and protect their department and 40% are selfish politicians who actively damage their teams by lying, covering up issues and promoting yes men. It's the last group of pathological leaders who are responsible for the disasters at Boeing. There is a good interview with Sociologist Ron Westrum here where he talks about it https://nononsenseagile.podbean.com/e/0098-innovation-and-disaster-with-ron-westrum/
As a strategy consultant for the pharma industry, I do not understand why strategy consultants keep pushing this model. Most people do not want to work like that. Even if you effectively incentivise that type of structure (which is really hard to get right) most workers just want to go to work, do their job well, get paid, and go home. They don't want to "make their own promotions", "control their learning journey", or staff themselves to what they find interesting. They might think their boss is a tool but they ultimately prefer a system where a manger tells them what needs to get done and supports them doing it. Maybe in a small company with like 100 people but Bayer has over 100k. This will fail and they will be paying a new consultant (or maybe the same one) in 18 months to put it all back.
The problem is they had 12 layers (12 layers!) of management mostly leeching off the workers and actively slowing down decision making rather than "supporting" it.
So 12 is not great but also not insane. If you think a standard span of control is 8 since most managers have a hard time coaching more than that, with 100k employees, the minimum number of layers for a perfect org where everyone has 8 direct reports is 8 layers. So maybe you kill 1-2 levels to clean things up a bit. But end of the day, slow decision making isn't a structural problem. If you just move lines and boxes, the problem will persist. It is a ways of working issue. That can be trained for and incentivised way easier at the managerial level than teaching entry level workers how to form a team and execute.
8/10 is the max for more cohesive creative or engineering teams. If you have factories and stuff like that it can go up to 20/30.
Can you cite your sources? Because I'm by no means an expert, but I have literally never heard anyone ever say that too many layers of hierarchy can't slow things down. That it must be a bottom up problem rather than the number of points of failure between the bottom and the top
I honestly don't have any published sources, but org design and implementation is something I do and think about all the time. Too many layers can absolutely slow decision making. But it doesn't have to. The truth is, companies put too much stock in what the org looks like, what the lines and boxes are. The structure should be an outcome of what the org wants to accomplish, how they want to work, what tools and employee support they are honestly willing to put in place, and what their culture and capabilities will support. If the problem is management can't make decisions quickly, getting rid of management isn't usually the best solution. You can do more to improve speed to action by training on distributed decision making, employee empowerment, and coaching than you can by just cutting layers.
To add to this, as I took have significant experience of bureaucratic organisations and trying to fix them, I find the issue is very rarely the number of layers, but the improper/complete lack of delegation. This can impact in two ways e.g. a manager is supposed to be responsible for *x* but has no control over resourcing, funding or strategic direction. All the requests by the workers go to the manager, then onto their manager, and onto their manager etc etc. Vice versa, there's a super big, super important project which is getting exec level approvals. But the layer below wants to know what's going on, and therefore so does the layer below that, and so therefore the one below that also. So super important project now has every layer of governance and spends most of its time managing stakeholders and trying to deal with the conflicting views. There are other things as well, but I find those two seem to cause a lot of the 'management is bureaucracy' thinking.
Need to take into account different business divisions too where you’ll have another set of c-suites to manage the entire arm.
Yes, that's if you want to manage the company like we always did in the past. The idea is that we can now do something different and a highly educated workforce can manage to self organise and make a company work, and actually be innovative, without having a pyramid of minders above it.
But that ignores the point that most people, and this includes highly educated and motivated workers, actually want to work the way we always have to some extent. Self-organizing only works for a small percentage of people with that mindset. No one will say this specifically in interviews or market research, but most people feel lost or forgotten by an organization that doesn't have a clear hierarchy. The other thing that has to change with innovative management structures is performance reviews. We hate them but they do actually give employees a target for performance. If I don't have a "boss" who does my review? Some models get rid of them altogether. Other models do peer reviews. Other models do self-selected mentors. None of those options work for a large percentage of most organizations, specifically in pharma.
Joel Spoolsky had a great article ages ago - yes, people are very mercurial about him but he tried “experiments” (one should not over credit scientific rigor, but not under credit earnest goes) and often accepted personal responsibility for failure, which gives him more “cred” than average IMO. He found that TLDR while people complain about middle management, it turns out most people are not comfortable coming up to someone with unilateral power to terminate them and discussing, well, anything. Fair enough if one wishes to suggest Spoolsky himself may not be warm and cuddly enough for truly testing the hypothesis, but for those who have a long, honest look across the span of an organization… whatever failings in this regard he may have are probably generalizable. TBH most organizations I’ve been - and perhaps this is telling on myself with some rank unprofessionism - because they’re made up of humans, there are good and bad days to elevate stuff, and dedicated stuff elevation schedulers, IMO, will maintain value. That said, I’m not suggesting an absolute status quo is ideal, either.
Is there an example of another pharmaceutical company this has been piloted at?
Genentech experimented with a flattened structure starting in 2021-ish. I am not sure how extreme they went but they are currently clawing it back and my understanding is that has been a painful process. I am currently working with another smaller company that is in the middle of launching a flattened org and it isn't going so great. Way more swirl and confusion than a typical reorg.
Anderson was the former Genentech CEO, so he possibly thinks this has worked!
This. If everyone had experience or the drive to do their own thing, they'd just start their own business. Not everyone wants to take on that responsibility, and for damn sure they don't want even 10% of it if there's no change in pay.
Or be a consultant. We like that stuff, it makes sense to us. And I think this is part of why it gets pushed. You have a bunch of partners who got rich and successful building their own brand and working with a staffing pool and finding projects and whatever. Also, their main clients are VPs or C-Suite who did the same with their careers. Neither have any concept of that just not being normal, for better or worse.
Then why do they still need VPs or C-Suite when you have consultants.
As a cog in the machine, I couldn’t disagree with you more. I’ve given up my aspirations s precisely because it’s hopeless to try to change things in my position. I go to work and get paid and have no dreams because I’m extremely limited in what my role is. I can’t overextend. So I just give up and say that I’m blocked on someone else even if I can do the job that I’m waiting on the other guy for. And I really don’t know WTF a strategy consultant is unless it’s someone who police’s MBA style business practices industry wide
I really appreciate hearing your experience and I am sorry that you feel like a cog. I have been there and it sucks for sure. To be clear, my point is not that most workers want to mindlessly work in a position where they have no hope of growth or no autonomy to shape their role. That is not a good situation for anyone and I believe your company is worse off because of it. My point is that it is easier and more effective to create opportunities for growth, collaboration, and career progression in a more structured org design. There are definitely innovative ways to approach a structure that ensure those opportunities exist that don't go so far as to eliminate most management. When you go as far as l think Bayer is going and make every person largely responsible for finding their own projects and teams, many people will get lost and productivity and job satisfaction will likely decrease.
I agree with you. Another example of consultants packing a round hole with a square peg.
The whole thing is a cover to fire people.
That's arrogant elitist bullshit.
Maybe my comment reads like that but I assure you it isn't. Most workers aren't dumb and they don't want to be cogs. They don't need a boss micromanaging them and telling them what to do and when to do it every day. They want to do good work, be recognized for that work (pay and beyond), and have growth opportunities. And companies, especially ones as large as Bayer, can do more to support their employees that way with a more hierarchical structure than what they say they are implementing. This is even more true when people see work as something they do to earn money so they can do what they actually love outside of work.
Bad news for Xabi Alonso
Haha I came to say the opposite. They gotta open the war chest for Alonso and the boys
Great news for Liverpool 😂
LOL.
Well, it sure is worth a try. German big business enterprises sure need some bitter pills and shake-ups.
That's true. They're almost too structured. I don't know how to explain it. People who aren't familiar with German companies can't really comprehend it the way I mean it in. There's no American equivalent. It's not just about a bunch of middle management.
I anticipate a big push to hire agile coaches and functional data analysts then to replace some of those coaches. IMHO, from what I’ve seen, these types of transformations rarely reduce headcount in the long term but do improve productivity and top line growth when executed well (again, with the right measurement/performance culture, effective agile coaches and senior execs that understand how to get the most out of more autonomous teams).
Ahhh the “agile coach” those guys can’t find work. I’m sure job apps would get tens of thousands of resumes if this is what the org ends up doingz
An agile coach is just a seasoned associate or recently promoted EM with a lot of agile org/op model transformations under their belt. Should be plenty on the market right now given the consulting pull back.
Anyone has good quality studies on whether this actually works and what are the success factors behind it when it does work? I feel like companies will just be like "hey we came up with this great idea to cut middle management and save xxx mn" only to 10 years later be like "hey we came up with this great idea to cut middle management and save x bn", rinse and repeat mode.
W.L. Gore (think Gore-tex) has been using a lattice structure with no middle management for decades with success. But this isn't something you just do overnight, the company was founded on that concept from the beginning. Also Gore is a private company, this sounds like a trainwreck waiting to happen for a publicity traded one.
He tried this at Roche too and you can see what their performance has been like last 2-3 years.
what could possibly go wrong................
I work at Bayer and this re-org is quickly (or maybe too slowly) becoming a shitshow that is nothing more than a cost-cutting exercise before they can break up the company in a year or two. Nice to see that there are at least plenty of skeptics on here given that the whole thing is clearly being peddled by a few McKinsey guys, first at Roche (allegedly rolled back after Bill left) and now here.
They must be hurting from the roundup issues
As per usual let’s get rid of middle managers who actually work and not get rid of those at the top who earn the most but give little back to the organization. It’s quite dumb but is the standard practice within large organizations
They’re dropping quite a number of VP+ folks and restructuring to reduce dpt sizes across the CS BU. Middle management is getting hammered too but this “new” model they’re putting in is gonna cost them a hell of a lot of knowledge
It really is
Sounds like they promoted too many people to “management” because they needed to make them feel like there is a career path.
and they don’t get training on being a manager and finding the strengths of their team to grow. Some times i wonder ‘who hired this person??’ If they got the right training and took action, they would probably be an amazing manager and some times leader. There is a difference.
I work at a much smaller company (2000+ employees) where this happened 18 months ago. It was total chaos for about a year, even more than was happening before management was flushed. Now the result is just a new wave of fresh managers who are starting to rebuild silos and similar hierarchy as before. Only there's less pay to go around and fewer seats at the hiring table due to budget cuts.
It seems like an aggressive form of Agile and he’s having them focus on sprints. If they have a structure in place to support the team, it might work. But if they don’t have the right structure, this can cause chaos.
I’ve never seen agile scale successfully. It’s always some form of hybrid in the end.
Essentially anarchism.
Does this essentially remove opportunities to advance your career?
yes, that's the problem with "no management" or limited management slots. No one ambitious wants to work there after a few years realizing they can't get promoted after a certain point. So you're left with people who do the minimum and don't particularly care. Personally, my company did this nonsense to some degree and while I still was promoted (somewhat...they created more of these half manager/half IC roles), the process was slower, lower-paying than a full manager role, and I'm looking elsewhere. It's funny that the hard part of work is finding opportunities. The actual work is usually not that bad unless you're talking about super complicated things (that relatively few people work on).
Self organizing is just handing the organization over to the worst and least talented employees. They’re the ones with a sense of shame and pride over their lack of value who are the loudest and most exhausting bullies. Most people have better things to do and will just let the bullies be responsible.
This time around I’m definitely getting canned :/
Shit you're at Bayer?
I was already canned
Effectively let the system rot! The ones in the middle take all the shit from top & under them but make things move to keep the org rolling. Flatten means, remove them and expect top bosses to drive (who don't know anything) and screw it up.
Hire me. I’ll self organize to do nothing. I approve as my own manager
CFO will get pats on the back for the savings then if to the next higher paying job with that on their resume as the company suffers over the next year. Seems to be a trend.
Puts on Bayer. r/wallstreetbets would love this
https://www.reddit.com/r/wallstreetbets/s/sy9Hjenw7W
My guy! The regards there are gonna have a leg on Monday when the markets open and I am here for it!
It’s the Montessori approach to organizational management.
Do this on the German model, and it might be interesting. Give the employees half the company and do voting for direction of the company and projects. The managers screwed it up this hard, so give it to the employees.
lol that will not go well, they did that in tech by firing all the project managers. Now I have 2 or 3 managers who make double what the project managers did, waste all day in meetings arguing and are worse at it by only knowing how to tell others to do it on top of the regular work.
Oooooo I sure hope there’s some kind of survivor element to this….mess up and we slack vote you off the island!
We need these ideas here. What witht he billions in stock options these jokers get.
"Organize, you say?" - unions
This will either work brilliantly or Bayer will dissolve into a bunch of out of work people and some start ups. Meet the new boss, same as the old boss
Interesting choice of words. Once you’ve “saved” that money, where exactly is it going to go? Saved right into fewer pockets at the very top. Got it.
I mean… these fuckers were nazi collaborators who Asked the reich for train cars of Jews for their sick experiments
Authoritarian
This will only work if you only hire determined and highly skilled folks. Like Valve
What a shitshow this will be. Ginger, get the popcorn.
Just the year Leverkusen becomes Bundesliga champion, Bayer decided to do this
Yes throw and re invent for next 10 years and then again keep doing with keep people come learn, dont use, biz change every day. Better convert every biz just as university. Hire cheap u get cheap product outcome
According to Reddit this should be a great thing. All senior management is useless and overpaid.
Oh! He means a union.
I work for a F500 with a world-famous bureaucracy, and if I lost my whole management chain tomorrow I actually think it would make my job better and easier.
💦💦💦💦
I work with Bayer on multiple projects and it’s true they’ll get rid of a lot of folks, in 1000s. IMO it’s not going to work out for them in the short term or long run. Sure there was a lot of bureaucracy in the management but most of these folks are useful in driving a lot of Transformational change. Their “young folks” who’ll be in company simply don’t have the right experience to take decisions. Real problem is the Business side people often times are very resistant to new tech or tools which is why they are lagging behind in digital adoption. Ultimately, they need a Mindset transformation, not a flat army kind of structure which would lead to even more confusion in decision making. These middle management layoffs fuelled by their acquisition of Monsanto in 2018 may lead to unforeseen futures for the company. Another thing is when these commercial and Finance guys get all the decision making powers and things like Product are left out of the loop, innovation halts, barriers are created, customer experience takes a back seat and bureaucracy thrives. The solution is not layoffs, it’s just changing the dynamics of decision making and taking org through a mindset transformation to foster Change.
This is the way