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Bayer boss Anderson:

The stock is at a ten-year low and in free fall. Only the football club is currently top

Photo: Tom Kaeckenhoff / REUTERS

Bayer boss Bill Anderson is promoting the pharmaceutical and agricultural group's new operating model, which manager magazin had already reported on in detail. This model, with which Anderson wants to reduce hierarchies, streamline structures and accelerate decision-making processes, is already bearing initial fruit, said the American, who has led the company since last June, at the weekend. It is a fundamental redesign, from the CEO to the customer. This will also involve a significant reduction in personnel, as Bayer announced in January - to the detriment of many managers. Dismissals for operational reasons in Germany are only excluded until the end of 2026.

Time is running out for a restructuring if Bayer does not want to sink completely into insignificance from the former DAX champion. The former most valuable German DAX company has lost more than 70 percent of its value on the stock exchange since purchasing the glyphosate manufacturer Monsanto in June 2018. Bayer is currently worth a good 27 billion euros - much less than it once spent on the $63 billion takeover of Monsanto.

Staff cuts also in the USA

Sebastian Guth, head of Bayer's pharmaceutical business in the US, said the number of managers there had already been reduced by 40 percent. Decisions that in the past would have taken three to six months are now made almost immediately. In the over-the-counter health products business in Southeast Asia - an important growth market for the division - the team managed to advance the launch dates for new products by five to nine months in less than three months after introducing the model. “This will bring an additional two million euros in value this year, an increase of 30 percent,” said Anderson.

Almost four weeks before the eagerly awaited Capital Markets Day - on which Anderson plans to present his plans for the future of Bayer - he gave insights into the new, simplified organizational model. Anderson had already complained in November that twelve levels between him and the customers were “simply too much.” The internal regulations consist of 1,362 pages. Anderson aims to reduce this by 99 percent. He also wants to move from annual to 90-day budgeting cycles and give teams more freedom when making decisions.

Suggestions from Gary Hamel, tested during the Roche conversion

He gets inspiration for this from the management bible “Humanocracy” by the US economist Gary Hamel. Anderson has already tested this with his previous employer, the Swiss pharmaceutical company Roche. There he cut fixed budgets in the pharmaceutical division. As a result, expenses have fallen and performance has increased, Anderson summed up at the time.

The pressure on the American is high. Investors expect him to review the group's structure - the demands have already ranged from a spin-off of the business with over-the-counter health products to a complete split-up of the group, which also includes the pharmaceutical and agricultural businesses. But according to insiders, Anderson initially wants to concentrate on introducing the new operating model.

Above all, he must also win back the trust of investors, who suffered heavily from the billion-dollar takeover of glyphosate developer Monsanto and the wave of US lawsuits over the weed killer's alleged carcinogenic effects. Bayer recently lost a series of glyphosate lawsuits and was recently sentenced by a jury to a record fine of $2.25 billion. The company still stands firmly behind the herbicide, Anderson replied when asked whether Bayer was planning changes to its process strategy.

la/Reuters