BAYER: "Octopus move" / Lessons for management restructure. Brian D Smith

In these confidential meetings, I help them think about how their market is changing and how they can align their firm’s adaptation to those changes. Based on my academic research, I often use Darwinian evolution as a guiding framework for these meetings. This helps the execs make sense of their situation’s complexity and also offers a wealth of thought-provoking metaphors. This was especially true at one recent thoughtshop, which I will share with you.

Bill Anderson’s mutation

The thoughtshop happened just a few days after Bayer’s CEO Bill Anderson had announced a more than usually radical restructure, which involved not only some significant new appointments but also a pretty drastic delayering. It’s not always easy to see through the corporate PR-speak, but it seems clear that he is trying to accelerate the venerable company’s adaptation to our market’s changing social and technological environment. Frustrated by Bayer’s bureaucracy, Anderson is shrinking the leadership team and central management functions while pushing decision-making down the organisation. In the thoughtshop, this move became a point of discussion. Would it work? What would Charles Darwin predict for Anderson’s chances of success?

Nine brains

A good biological metaphor for what Bayer is trying to do is the octopus. In contrast to most other creatures, the octopus has a kind of distributed intelligence. Its central brain, wrapped around its oesophagus, contains only one third of its neurons and is helped by eight other brains, one in each limb, that together contain the remaining neurons. The nine brains seem to combine in a top-down/bottom-up coordination, with the limb-brains focused on making sense of their immediate environment and the central brain passing signals between them. This seems to work. Octopuses are phenomenally intelligent and have survived for millions of years. If Bayer can imitate them, then Anderson will deserve high praise.

Idea vehicles

Metaphors are more than writers’ devices. In science, they are a vehicle for carrying useful ideas from one subject area to another: Think of CRISPR’s molecular scissors and cell factories. They can be stretched too far but, used intelligently, metaphors are very useful. Applied to the question of whether Bayer’s restructure will work, they provide an answer that depends on two contingencies. 

_First, octopuses’ distributed brains work because their limb brains have evolved to be extraordinarily good at making sense of their local environment. Each of them processes the information from up to 280 suckers, each of which has 10,000 neurons that feel and taste. _Second, octopuses’ success is also due to coordination between limbs, which work together to push food into their mouths. Subsidiary sensing and central coordination are the two things that make octopuses so intelligent and effective. Without either, these creatures wouldn’t be the doyens of intelligence researchers that they are.

The Leverkusen displacement

As Donald Schön wrote, organisations learn by displacing ideas from one context to their own and, if he’s as smart as I think he is, Anderson will displace cephalopodologists’ ideas into Bayer’s Leverkusen office. He’ll ensure that his distributed decision-makers have the capabilities and resources to make sense of, and react to, their market sub-environment. At the same time, he’ll direct the much-reduced headquarters staff to be conduits and coordinators rather than controllers. Both of these tasks are much easier to write than to do and the success of Bayer’s reorganisation depends on its implementation. Anderson’s octopus move certainly could work, but whether it will or not hinges on another factor, clues to which lie in his public announcement.

Cultural artefacts

Anderson was quoted in the industry media as saying Bayer’s bureaucracy was the problem, not its culture. That suggests a gap in his understanding. Bureaucracy is an artefact of organisational culture, not separate from it. When he complains about small decisions needing multiple signatures, he’s observing a surface indication of a deep-seated culture that, like all organisational cultures, is persistent and pervasive. He can fix all the bureaucratic issues he wants, but if he doesn’t address the implicit values and ‘taken for granted’ assumptions that underlie them, they will come back to hinder even the most distributed intelligence. I’m very fond of Bayer and I really want its octopus move to be successful. That is more likely if Anderson is less complacent about the grand old firm’s culture.

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