The new Bayer CEO, Bill Anderson, began his tenure with high expectations. But half a year later, a sense of disenchantment has set in. This conclusion can be drawn, at the very least, from the stock's performance. Just a few days ago, the company's share hit a new annual low. With a market capitalization of 44 billion euros, Bayer now ranks only 14th in the DAX. This is largely due to the profit warning that the company had to issue in July. Nevertheless, it has heightened shareholders' expectations.

Moreover, the recently disclosed ideas about the new work model that Anderson intends to implement in the company have not fully convinced the investors. As far as currently known, the focus is primarily on reducing hierarchies and streamlining bureaucracy. This is a topic that has been on Bayer's radar for a while. Marijn Dekkers, Anderson's predecessor at Bayer, coined the memorable phrase "more innovation, less administration" back in the fall of 2010. Shortly thereafter, an efficiency program was initiated, which entailed the elimination of 4,500 jobs.

Unlike Dekkers, who ultimately implemented a traditional cost-cutting program without changing the structure, Anderson envisions an entirely different form of collaboration. The former Roche-Manager believes that teams should be granted more decision-making power to act responsibly and make significant progress. In short, the company should become leaner and, as a result, more agile.

However, Anderson faces a considerably more challenging task than most of his predecessors. Bayer has endured five economically challenging years, which have also eroded the confidence of its workforce. The adverse consequences of the Monsanto acquisition are still not entirely resolved. Not to mention, Bayer had already cut 12,000 jobs after the acquisition to reduce costs by 2.6 billion euros. But because this wasn't sufficient enough, another cost-cutting program was introduced in 2021 with the aim of making the company "leaner and more agile" once again. Promised savings: 1.5 billion euros.

Anderson is now set to implement a substantial organizational overhaul, eliminating numerous hierarchical levels for the deeply unsettled team. Understandably, the fear of job loss is particularly prevalent in the middle management. It's undeniable that streamlined organizations with flat hierarchies can respond more quickly to changing conditions. Yet it should not be overlooked that a corporation with over 100,000 employees on the payroll – despite all job reduction programs – cannot be run in a grassroots democratic manner. Therefore, Anderson is advised to not push the boundaries too far.

Cost considerations may not be the primary focus of the planned organizational restructuring. However, before presenting the project to investors, it unquestionably needs to be labeled with information regarding expected savings and associated costs. The pivotal question is how much time the weary shareholders will grant the new Bayer CEO. Their trust has been profoundly shaken, and for good reason. The medium-term goals announced at the end of 2018 quickly proved to be unattainable, and the financial targets presented at the Capital Market Day in 2021 are now out of reach as well.

Bayer has not managed to free itself from the financial burden of the Monsanto acquisition. On the contrary, the net debt will climb back up to 36 billion euros by the end of the year. Thus, there's no room for acquisitions to boost the pharmaceutical pipeline. Therefore, Anderson will not only need to make a compelling case for the organizational overhaul within the company but also work to gain the trust of shareholders.