Bayer CEO Anderson Flattens Management Layers to Fight Bureaucracy

拜耳CEO安德森精简管理层级以破除官僚主义 传统的层级制度会自然滋生组织官僚主义，而非像外部病毒那样侵入组织，这要求领导者以高度自律的90天周期和扩大的指导幅度，取代原有的命令与控制结构。 在这场对话中，拜耳CEO比尔·安德森（Bill Anderson）分享了他破除企业官僚主义并释放大型组织内部“传道者般热情”的激进策略。结合在Genentech、罗氏（Roche）以及现今拜耳的领导经验，安德森阐述了如何通过扩大“指导幅度”以及采用同步的90天规划周期，来取代僵化的命令与控制结构。他与主持人Brian Halligan探讨了职位头衔的演变、同级互评机制的推行，以及处于扩张期的企业引入职业经理人的战略时机。讨论最终强调了将薪酬与组织架构解耦、建立动态资源调配机制，能够怎样帮助不断发展的企业保持敏捷。 拜耳（Bayer）CEO Bill Anderson 推动了激进的组织架构重组，将管理层级从 11 层压缩至 6 到 7 层，并将部分管理者的直接下属扩大至最多 90 人，以此消除微观管理并将管理者角色转变为疏通业务障碍。 (7:47) Anderson 强调官僚主义并非侵害健康组织的外部“病毒”，而是传统金字塔层级结构的必然副产物；只要企业环境设计得当，绝大多数员工都能展现出“传教士”般的自驱热情，而非沦为被动的“雇佣兵”。 (2:58) 针对从 100 人向 1,000 人规模扩张的高速成长公司，Anderson 建议创始人应尽量推迟从大公司聘用“职业经理人”，避免其惯用的官僚管理模式将团队带向迟缓与平庸。 (20:03) 拜耳彻底废除了僵化的年度预算机制，转而采用以 90 天为周期的“动态资源流动”（Dynamic Resource Flow）双级体系，每季度根据实际业务优先级灵活重新调配 10% 到 15% 的资源。 (23:39) 公司全面推行每 90 天一次的同行互评机制来促进员工成长，但坚决将互评评分与薪酬奖金直接脱钩，防止反馈系统被利益绑架或演变为互相示好的虚假评价。 (33:20)

Bayer CEO Bill Anderson argues that corporate bureaucracy is an inherent architectural defect rather than an external infection, requiring deep structural redesign rather than superficial reorganization. Through an operating model called Dynamic Shared Ownership, Bayer has flattened management layers, replaced annual budgeting with fluid quarterly cycles, and decentralized decision-making across a 90,000-person enterprise. Bureaucracy as Structural Flaw and Expanded Coaching (2:58) Anderson asserts that corporate bureaucracy is not a disease infecting healthy companies, but the natural byproduct of functional silos, multi-layered hierarchies, and sign-offs by managers far removed from customers. Decades of traditional corporate initiatives failed because they left these underlying reporting systems intact. At Bayer—a 160-year-old pharmaceutical and agricultural company that reduced its workforce from 100,000 to 90,000 employees by eliminating redundant middle management—Anderson reduced management layers from 11 or 12 down to six or seven. To prevent traditional micromanagement, Bayer expanded its average span of control—rebranded as "span of coaching"—from 6.5 to 14, with some managers overseeing up to 90 direct reports. Managing 90 people makes standard command-and-control practices and routine one-on-ones impossible. Anderson explains that this structure shifts the managerial mandate from directing tasks to clearing operational bottlenecks, allowing frontline scientists, agronomists, and salespeople to take genuine ownership of their work. Dynamic Resource Flow and Synchronized Quarterly Cycles (23:39) Traditional corporate budgeting commits capital 12 months in advance, creating an incentive for departments to spend their exact allocation regardless of mid-year market shifts. To replace this rigid mechanism, Anderson implemented Dynamic Resource Flow, a two-tier budgeting model. Tier One sets an overarching, non-negotiable financial commitment with investors, such as spending $20 million toward clear deliverables. Tier Two pools that capital across teams without locking it into departmental silos, allowing funds to move flexibly based on real-time priorities. To prevent decentralization from descending into disorder, Bayer synchronized its operations around universal 90-day cycles. Every quarter, teams run retrospectives to evaluate customer-centric outcomes rather than mere outputs, establish upcoming priorities, and reallocate 10% to 15% of the organization's workforce and capital. Anderson notes that while inspired by decentralized frameworks like Frederic Laloux's Teal model and the Dutch home-care provider Buurtzorg, Bayer had to adapt the concept because complex pharmaceutical pipelines require coordinating thousands of specialists across a decade or more. Decoupling Peer Performance Feedback from Compensation (29:28) As organizations expand, Anderson and host Brian Halligan caution that relying solely on managers for performance evaluations pushes companies toward rigid hierarchies. Bayer introduced a quarterly peer-review model centered on two straightforward prompts: identifying an employee's major impact over the prior 90 days and highlighting areas for improvement, using a rating scale of 0, 1, or 2. However, Anderson insists on maintaining a strict separation between peer reviews and bonus multipliers, warning that direct linkage inevitably encourages reciprocal grading or soft evaluations out of sympathy. Managers must instead synthesize peer feedback, personal observations, and team deliverables at year-end to determine pay. Halligan adds that compensation must also decouple from the organizational chart itself, observing that elite individual contributors—such as specialized AI scientists at Meta—often create more enterprise value and should be compensated above the executives managing them. Scaling Traps, Professional Managers, and CEO Succession (20:03) When scaling from 100 to 1,000 employees, Anderson cautions founders against automatically capitulating to venture capital pressure to hire traditional "professional managers," pointing to Amazon's retention of core talent during its rapid growth. Halligan similarly recommends delaying professional executive hiring until key organizational milestones—such as adding a VP of sales at 100 employees, a CFO ahead of an IPO, or a general counsel at 500—while warning against recruiting executives from massive conglomerates due to severe operational and cultural mismatches. On leadership succession, both executives dismiss the concept of a "caretaker CEO" who merely maintains the status quo. Anderson warns boards against reflexively promoting internal second-in-command executives under the assumption that a company can operate in maintenance mode. Halligan and Anderson agree that whether an incoming CEO is hired externally or promoted from within, leaders entering seemingly comfortable, high-morale companies must be willing to initiate aggressive organizational restructuring immediately to prevent stagnation. Anderson's overhaul at Bayer illustrates that dismantling enterprise bureaucracy requires disciplined operational rhythms—such as synchronized 90-day cadences—to prevent decentralized teams from drifting into chaos. However, whether Dynamic Shared Ownership can successfully counteract impending patent expirations and sustain complex, multi-decade drug discovery pipelines over the long term remains an ongoing real-world test.

拜耳（Bayer）首席执行官比尔·安德森（Bill Anderson）指出，大企业的官僚主义并非外部感染的“病毒”，而是传统层级与职能架构的内生必然；通过建立以90天为周期的“动态共享所有权”机制、大幅削减管理层级并扩充管理跨度，传统企业巨头能够打破组织停滞并重塑执行活力。 破除官僚体系：管理跨度与扁平化重构 (7:47) 安德森结合其25年的管理经验提出，传统层级制是官僚主义的根本来源，而常规的企业重组往往仅减少一两个管理层级却保留既有决策系统，无法解决核心问题。在掌舵拥有约10万名员工且面临专利悬崖与监管挑战的拜耳后，他将公司的管理层级从11至12层直接缩减至6至7层，员工总数优化至约9万人，裁减的岗位绝大多数为中层管理人员。 与此同时，拜耳将平均管理跨度（内部重新定义为“教练跨度”）从6.5人扩展至14人，部分管理者的直接下属甚至达到20人、30人乃至90人。安德森解释，直接管理90人使得传统的微观管理和一对一绩效追踪彻底失效，管理者的核心职责被迫转变为清除系统瓶颈与提供支持，从而让一线科学家、农学家与销售人员真正拥有业务自主权。 动态资源流动与90天同步周期 (23:39) 为解决传统企业在每年9月制定预算、次年年中即因外部变化而失效的僵化问题，拜耳废弃了传统的年度预算审批，推行名为“动态资源流动”（Dynamic Resource Flow）的双层资源配置模式。第一层维持与外部投资者的固定年度里程碑与总额承诺以确保商业信誉；第二层则将具体资金保留在内部共享资源池中，打破各部门刚性占有预算的壁垒。 拜耳全公司统一按照同步的90天周期运转，各业务团队聚焦于以客户为中心的“成果”而非表面的“产出”。每隔90天，各团队用约一小时复盘关键目标达成情况并设定下阶段优先事项；组织在此期间动态重新调配10%至15%的人员与预算。若某团队遭遇审批延误，其资源可被即时转移至出现高增长机会的团队中，从制度上消除了年底突击花钱的动机。 同行评估机制与层级薪酬的彻底解耦 (29:28) 在绩效管理上，安德森主张推行90天一轮的同行互评，由密切协作的同事回答个人在周期的重大影响及改进建议两个核心问题，并按0分、1分与2分进行极简评级。安德森明确警告，绝不能将同行互评分数直接用作奖金的计算乘数，否则会导致员工互相串通打高分或因人情而降低标准；管理者的职责是在年末整合个人观察、同行反馈与团队交付成果，综合做出薪酬决定。 播客主持人布莱恩·哈利根（Brian Halligan）进一步强调，企业在扩张过程中必须将员工薪酬与组织架构图上的纵向层级解耦。他以Meta为例指出，顶尖开发者与AI科学家的报酬甚至超过管理他们的副总裁；在健康发展的组织中，高价值独立贡献者（IC）的实际产出完全可能高于管理者，其薪酬理应依据真实业务价值而非职级高低来确定。 警惕职业经理人陷阱与激发组织使命感 (20:03) 针对由100人向1000人规模扩张的初创企业，安德森直言创始人应抵制风投机构在B轮后要求管理层全面“升级”的压力，避免过早引入传统的“职业经理人”，并列举亚马逊在数万人规模前长期依托核心初创班底的做法以防止组织平庸化。哈利根补充建议，初创团队应推迟设立总监层级并保持不低于1比10的管理跨度，直到跨过百人节点后再按需补充关键专业职能，且应避免从大型跨国公司直接挖人造成文化与运营脱节。 在组织文化层面，安德森驳斥了“使命型人才”与“雇佣军”的非黑即白对立。他以亲属在日常岗位恪尽职守、却能在业余志愿服务中以极高热情率队重建风灾房屋为例指出，绝大多数人身处恰当环境时皆能迸发使命感。优秀管理者的任务并非大海捞针般寻找罕见的自驱者，而是构建消除官僚内耗的制度环境，使全力以赴成为组织的普遍常态。 新任领导者的激进变革与内在参考心智 (61:45) 在探讨高管传承时，安德森否定了继任者应当稳健维持既有业务的传统思路，强调企业“要么变革，要么死亡”，并不存在所谓的“维护模式”。哈利根与安德森均指出，不论是外部空降还是内部晋升，新任CEO都必须在就任早期推行坚决的彻底重组；许多表面上员工满意度极高、气氛舒适的企业，内部决策流程往往早已陷于停滞泥潭。 面对组织深层变革中的阻力，安德森引入神经语言规划（NLP）理论，强调领导者应当建立“以内在为参考且具备社交敏感度”（internally referenced but socially sensitive）的心智模型。相比极易受下属情绪牵制的外在参考型领导，依赖内在罗盘行事的领导者能够在面对中层抵触与剧烈阵痛时坚决执行战略重组，同时以坦诚尊重的姿态回应外部质疑，而非刻意维持全知全能的虚假形象。 拜耳推行的“动态共享所有权”提供了打破跨国集团科层官僚的激进样本，但安德森亦指出，大型制药业务涉及数千人长达十余年的跨职能协作，无法完全照搬荷兰Buurtzorg等无管理层机构的极简模式。在面临专利到期与商业挑战的严峻现实下，拜耳这种依托坚韧制度底线与高度去中心化相结合的敏捷尝试，能否在复杂工业研发体系中持续维持秩序与效能，仍有待更长周期的实践检验。

[20:03] Bill Anderson: Don't hire professional managers. [23:39] Bill Anderson: the whole world has freaking changed. [23:39] Bill Anderson: treat the company's money like it's your own money [29:28] Bill Anderson: What was this person's major impact in the last 90 days? [29:28] Bill Anderson: What could they have done to be even better? [33:20] Bill Anderson: What you don't do is you don't take that rating... [and make it] their multiplier for their bonus. [35:56] Brian Halligan: It's amazing what a soldier will do for another color ribbon on their shoulder. [40:27] Bill Anderson: hire great people and turn them loose, [44:08] Bill Anderson: we can't get anything done around here. [54:09] Bill Anderson: If we have 90,000 people at Bayer, I want to have—if in those 90,000 there's a thousand that could be product visionaries—I want to make sure that they're product visionaries coming through. [58:31] Bill Anderson: There's no maintenance mode... you're either changing or you're dead. [61:45] Brian Halligan: make big change right away [65:52] Bill Anderson: To show up and say, 'Hey, this company's really important. Our mission is great. Our technology is great, but boy, I could really use your advice. I don't think I'm that good of a leader, and I'd really appreciate any input you have on how I can be more effective at helping the company.' [70:24] Brian Halligan: I think Jensen's got it right.

[0:00] In the 30 person organization, you see [0:03] an opportunity and you just do it. [0:05] Almost every large organization has a [0:08] bureaucracy problem, but a lot of times [0:10] things just don't happen because it's it [0:12] there's just too much overhead. It's not [0:14] that the organization is healthy and [0:16] then it gets a virus. Is actually the [0:19] composition of the organization is [0:21] what's creating bureaucracy. [0:40] I'm here with Bill Anderson. You've [0:42] never heard of him, but you're about to [0:44] understand why he's one of the most [0:46] fascinating CEOs operating today. Bill [0:48] runs Bayer. It's a company that's been [0:50] around since 1863. [0:52] They invented aspirin. This is a [0:54] 160year-old pharmaceutical and [0:57] agricultural giant. When Bill joined, it [0:59] had a 100,000 employees spread all over [1:02] the globe. By every measure, it should [1:04] be the poster child for corporate [1:05] bureaucracy. Here's what makes Bill [1:08] interesting. Since taking over as CEO 2 [1:10] years ago, he's essentially torn down [1:12] and rebuilt how the entire company [1:14] operates. He's flattened 11 layers of [1:18] management, expanded some managers [1:20] direct reports from 60 to 90, and thrown [1:24] out the entire budgeting and planning [1:25] process. This episode's not just theory. [1:28] This is a realworld case study of how to [1:31] scale without becoming sclerotic, how to [1:34] stay agile even at massive size, and [1:37] frankly, how to avoid the bureaucratic [1:40] death spiral that kills most growing [1:42] companies. You'll learn why bureaucracy [1:44] doesn't infect organizations, it comes [1:47] from within. Why the key to staying [1:49] nimble as you scale is the kind of [1:51] people you hire. And why the key to [1:54] earning trust as a leader is admitting [1:56] when you don't know what the hell you're [1:57] doing. Before you think, well, it's easy [2:00] to build the organization you want at a [2:02] huge company with unlimited resources. [2:05] Remember, Bill's doing this while [2:07] navigating patent cliffs, regulatory [2:10] challenges, and shareholders looking for [2:12] him to turn the stock around. If you're [2:13] a founder going from a 100 to a,000 [2:16] employees, if you're trying to maintain [2:19] startup energy as you scale, or if [2:21] you're just frustrated by the speed of [2:23] your organization, this is a [2:25] conversation for you. Bill's basically [2:28] created a playbook for organizational [2:30] transformation I wish I'd had when we [2:32] were building HubSpot. Bill, amazing to [2:35] have you, my friend. One of the things [2:36] I've noticed these days is the rule book [2:38] for being a CEO and the best practices [2:40] seems to be getting rethought. Man, [2:42] you're the perfect guest because from [2:45] inside a company that's over 160 years [2:47] old with 100,000 employees. You seem to [2:50] be rethinking how to run a company. And [2:53] so, thanks for coming on. Really [2:54] appreciate it. [2:55] >> Yeah, thanks for the invitation, Brian. [2:56] Glad to be here. [2:58] >> Tell me a little bit what's broken. You [2:59] know, what what do CEOs have wrong? What [3:01] are companies doing wrong? what you know [3:03] what what's the problem? Why did you [3:04] have to attack this? [3:06] >> Many companies have their own very [3:08] specific problems, but almost every [3:11] large organization has a bureaucracy [3:14] problem. And uh it's really interesting [3:18] because this is something that I've been [3:21] trying to get my head around for yeah [3:24] probably at least two decades. [3:27] And I say that because I think I I [3:29] became a manager first about 25 years [3:31] ago. And um and I noticed, you know, [3:35] when I was a new manager that one of the [3:37] things that we managers were doing was [3:40] we were we were trying to fight [3:41] bureaucracy. We were busting [3:43] bureaucracy. We're trying to take out [3:46] complications, simplify, prioritize. [3:50] Um and so that was, you know, 1999. [3:53] And then, you know, like fast forward [3:55] to, [3:56] oh, 15 years later and I noticed, wow, [4:00] you know, we're we're we're still doing [4:02] that. [4:02] >> Yeah. [4:03] >> Only the thing I noticed is is like [4:06] we're doing all this bureaucracy [4:08] busting, but things are only getting [4:10] worse. You're kind of like, hm, [4:13] what's going on here? You know, it's [4:15] kind of like if imagine you had a [4:17] disease and the more you tried to treat [4:20] the disease, the worse it got. you you [4:23] kind of have to rethink your strategy. [4:25] So I I think that's kind of a starting [4:26] point. [4:27] >> I I find with HubSpot like the bigger we [4:30] got, the less we got done. Do you feel [4:32] the same way? [4:34] >> Yeah. Yeah. Um that's that's I I had the [4:38] same kind of thing because I went from a [4:40] 30 person enterprise to a 700 person [4:44] enterprise and then that 700 person [4:46] enterprise merged with another and we [4:48] became 5,000. Then I went to like a [4:50] 10,000 person organization. and then a [4:52] 100,000 person organization. I noticed [4:54] that. Yeah. It it the bigger you got, [4:57] the worse it got. Yeah. [4:59] >> Like for example, in the 30 person [5:02] organization, [5:03] you'd see an opportunity and you just do [5:05] it. Or you see an opportunity and you [5:08] need some help. So you call a couple of [5:10] your friends and at at lunch because [5:12] you're just eating around the same [5:14] table. You got only got a little table, [5:15] you know, in your in your like little [5:18] break room. And uh you just go, "Hey, [5:21] what what if we do this?" and before [5:23] lunch is over, you've decided, "Yeah, [5:24] we're gonna do this." And you and you do [5:26] it. And then and then I go to [5:29] like from a 700 person organization to a [5:32] 5,000 person organization, that same [5:35] activity. Oh, you you can't just talk to [5:37] two people. you got to talk to like [5:39] seven people and then they got to talk [5:41] to their managers and then you got to [5:43] have like a follow-up meeting and you [5:45] know maybe [5:47] occasionally you actually get something [5:49] done but a lot of times things just [5:51] don't happen because it's it there's [5:53] just too much overhead. [5:54] >> Okay. So t talk about is bare is a lot [5:57] of people you joined and you made [5:59] massive changes. I read somewhere that [6:01] you eliminated 11 layers of management. [6:03] you took the rule book from 3,000 pages [6:06] to I figured like you really have kind [6:08] of torn it down and are rebuilding it. [6:11] What are some of the what are you up to? [6:13] Maybe before I answer that, let me just [6:17] just complete sort of the analogy. The [6:20] there's a common thought among managers [6:23] that bureaucracy is is kind of like a [6:25] virus that infects the the healthy [6:28] organization or the healthy healthy [6:30] organism and then you got to kind of [6:32] take the virus out. [6:33] >> Yeah. [6:34] >> And I would argue that's actually the [6:37] wrong way to think about it. The the [6:40] truth is that it's not that the [6:43] organization is healthy and then it gets [6:45] a virus. Is actually the composition of [6:48] the organization is what's creating [6:51] bureaucracy. Yeah. [6:52] >> You know, like think about it. Nobody [6:54] gets up in the morning and says some [6:56] manager in a in a big multinational [6:58] company gets up in the morning and says, [6:59] "Hey, I'm going to go be a bureaucrat." [7:02] Like nobody thinks like that. It's it's [7:04] and so um so I mention that because it's [7:08] it's actually the presence of 10 or 12 [7:12] layers. It's the fact that things are [7:14] organized [7:15] by this kind of functional org chart [7:18] instead of being organized around the [7:21] customer around the product. Right? It's [7:23] th those are the things those layers the [7:26] the need for signoffs the the fact that [7:29] people four layers removed from the [7:32] product or the customer are actually [7:33] decision gatekeepers. [7:36] >> Y [7:36] >> that is what is bureaucracy. It so it's [7:39] you can't you can't actually just take [7:42] out the bureaucracy. You you have to [7:44] take out the parts of the system that [7:46] make the bureaucracy. So, what we've [7:47] done at Bayer, we um when I arrived, we [7:50] had 11 to 12 layers and now we have six [7:54] to seven. Okay. Now, you might think, [7:56] well, six to seven, that's still a lot [7:58] of layers. But if you consider that, [8:02] >> not that many for 100,000 person or it's [8:04] not. [8:04] >> Yeah, exactly. It it it goes really fast [8:07] when you're counting them, you know? [8:08] It's like [8:09] >> specifically for you, how many direct [8:11] reports do you have? [8:12] >> Um I have actually I don't know how many [8:14] I have. Maybe [8:17] 14 or something. [8:18] >> Okay, [8:18] >> 12. Um, so what we've done is we've [8:22] we've taken out the layers. By the way, [8:24] lots of people talk about taking out [8:26] layers. In fact, pretty much every reorg [8:29] someone some says, "Oh, we got to take [8:30] out layers." Um, usually that's missing [8:33] the point. If you have a 12 layer [8:35] organization and you take out two [8:37] layers, which is probably the the [8:39] average big corporate reorg, they'd be [8:41] lucky to take out two layers. That does [8:44] nothing. If if the basic way things are [8:47] done, decisions are made up and down the [8:50] hierarchal functions. Uh you have annual [8:53] budgets where the money is divided into [8:56] thousands of little cost centers and [8:58] those are kind of like the money's [8:59] trapped. They're like money traps, [9:01] right? Um [9:04] if that's how you're operating your [9:05] business, it it's not going to get [9:08] meaningfully better. You can make it for [9:11] example yeah it's better to have 10 [9:13] layers than 12 but the same basic [9:15] problems are going to persist and so [9:17] what we've done is we've taken out [9:21] we've taken out so many layers and we've [9:24] expanded people's span of we we don't [9:27] call it span of control we call it span [9:29] of coaching [9:32] we do that not because it's a clever [9:34] name but because we have lots of people [9:36] in our organization [9:38] Well, let let me give you the facts [9:40] first and then I'll give you examples. [9:41] So, our average span of control was 6 [9:43] and a half, which isn't actually that [9:45] bad. A lot of large companies, it might [9:47] be five. We're now at 14, and it's still [9:51] going up. We're not done. And if you [9:54] look into that, what you find is we have [9:57] all kinds of people with with 20 direct [9:59] reports, 30 direct reports. The most I [10:02] know of, we have some people with 90 [10:04] direct reports. [10:06] The reason I mention that is not to be [10:08] obsessed with the math. Think about [10:10] this. Let's say you're managing five [10:12] people, you know, and you've got your [10:14] drill like, okay, you have annual [10:17] performance plans and goals and they're [10:19] going to review them with the manager [10:21] and you're you're hiring and firing and [10:23] you're managing performance issues and [10:25] all that stuff. Okay? You're managing [10:28] that. You're doing that for five people. [10:30] Now, you come into work the next day and [10:32] the boss says, "Hey, you know what? [10:34] You're gonna manage 90 people instead of [10:36] five. [10:38] >> You think your work's gonna change? [10:41] >> If you're doing one-on- ones, your your [10:42] schedule's done. [10:44] >> Yeah. I mean, think about it. How many [10:46] one-on- ones could you do? So, right. [10:48] You you're not doing one-on- ones. [10:49] You're not you're not doing the same [10:51] job. It's a different job. So, instead [10:54] of the idea that the management is [10:57] directing the activity of the [10:59] organization, that's done. Command and [11:02] control, forget about it. you you can't [11:05] command and control an organization [11:06] that's that flat. [11:09] You you have to switch to a mindset that [11:12] hey the the people of the organization [11:15] are owning the business. They are [11:18] whether they're engineers or aronomists [11:21] or doctors or lawyers or what whatever [11:24] their job is salespeople they actually [11:27] they and their colleagues their their [11:29] peers are owning the business. And the [11:34] job of people in management is simply to [11:39] uh kind of like be greasing the skids, [11:41] you know, to be figuring out, hey, [11:43] where's there a bottleneck? Where [11:44] where's the where's, you know, where [11:46] where are things stuck? And so we [11:48] actually we have a yeah, we have a a [11:51] description for that model. But but [11:53] that's the idea. So that's what we're [11:54] doing. We're we're getting rid of annual [11:57] budgets. [11:58] >> Everything is on 90 90-day cycles. the [12:00] whole organization including the [12:02] leadership team and every 90 days [12:07] groups of people come together and say [12:09] hm what are we going to do the next 90 [12:11] days what are the most important things [12:13] and then we spend one day every 90 days [12:16] planning so evaluating what happened the [12:19] last 90 days what are we going to do the [12:21] next 90 days can we do it with fewer [12:23] people if you know if a couple people [12:25] from our team we don't need anymore [12:28] they're going to go join another team [12:30] right so this is happening every 90 days [12:33] 10 or 15% of the organization is moving [12:36] to a different team um teams are [12:39] collapsing like teams go away and new [12:42] teams are formed so you know again you [12:45] have some standing teams like let's say [12:47] there's some molecule you're going to [12:48] launch in five years time well the the [12:51] product development team is not going [12:54] away in 90 days un unless you unless you [12:56] fail in in trials or something So you [12:59] have some teams that are durable teams [13:01] and you have other teams that are that [13:03] form for 90 days, 180 days and then they [13:05] go away. So that's what we're doing at [13:07] Bear. [13:08] >> Okay. So I had a lot of questions on [13:10] that. Um h you know at some level you [13:14] have priorities like you're trying to [13:16] get some stuff done. You're trying to [13:18] drive some results. you've in your head [13:20] you have priorities like how do you come [13:21] up with the priorities and how do you [13:24] roll them down to what seems more like a [13:26] jazz band than an orchestra. [13:29] >> Yeah. Yeah. Well, here's the thing. An [13:32] orchestra there's a there's a score. [13:35] >> Mhm. [13:36] >> Businesses don't have a score [13:39] unless you're just doing the same thing [13:40] over and over again. [13:42] >> They have an earnings call. [13:43] >> Yeah. But that's not a score. Mhm. [13:45] >> That's where the earnings call is where [13:47] you got to go and present your results. [13:49] >> Yeah. [13:50] >> The the investors don't care how you got [13:52] it. They want to know what you [13:54] delivered. [13:55] >> Yeah. [13:55] >> And and so yeah, business is a lot more [13:58] like jazz than it is like, you know, [14:00] Beethoven. And [14:03] >> I think most businesses are more like [14:05] Beethoven than And the bigger they are, [14:07] the more likely are they are like [14:08] Beethoven than they are a startup is [14:10] more like a jazz man in my mind. [14:13] But think about that, you know. So, so [14:16] is that good? [14:18] >> Not necessarily. [14:20] Definitely not necessarily. Um, but it [14:22] seems like gravity as organizations get [14:25] bigger, they they they look more and [14:27] more like orchestras. They're more [14:28] structured. There's more layers. The [14:30] planning is longer. The budgeting is [14:33] much stricter. And so, you seem to have [14:36] broken all that down. And I spent a lot [14:38] of time build just like coaching. I [14:40] basically coach startup founders and try [14:42] to teach them how to be scaleup CEOs. [14:44] Like how do they make that move from [14:47] startup founder to scaleup CEO without [14:49] turning into an orchestra, without [14:51] turning into, you know, a sclerotic [14:53] slow, you know, how do they avoid it [14:56] from the g from the get-go? [14:58] >> Well, they usually don't. [15:00] >> Yep. Um, [15:03] and if you look at the big tech [15:05] companies, yeah, [15:06] >> what I can tell from people I know [15:08] who've worked in them or working in them [15:10] now as an example, most of most of them [15:14] are big bureaucracies now, big command [15:16] and control. They have all the normal [15:19] corporate mechanisms. [15:20] >> Yeah. [15:21] >> And [15:23] now I want to be clear about something [15:24] and this is this is a bit of a [15:26] headscratcher for a lot of people. [15:29] You can do worse than having a [15:31] hierarchical bureaucracy. [15:34] In fact, a well-run hierarchical [15:38] bureaucracy [15:39] can deliver [15:41] okay performance. [15:43] And the the way I think about it, and I [15:46] use this analogy a lot, it's kind of [15:48] like there's hierarchy hill [15:51] >> and hierarchy hill think about it this [15:54] way. Let's say you've got two 10,000 [15:56] person organizations. Each of them has [15:58] the top hundred people that are [16:00] basically calling the shots. Y [16:02] >> and the other 99,900 people are more or [16:05] less order takers. [16:06] >> Okay. Which means they're not that [16:08] motivated. They're not they're not [16:11] killing themselves to deliver new [16:13] innovation or because it's too hard. [16:15] >> Yeah. [16:16] >> Because if they have to work their way [16:17] up through eight layers to get anything [16:19] done, it's exhausting. [16:21] >> They Yeah. They know, hey, that's not [16:23] really what's being expected of me. They [16:24] just expect me to, you know, [16:27] comply. All right. Now, if you have two [16:30] of these organizations, one of them, [16:33] let's say the CEO and the executive team [16:35] are more concerned about improving their [16:38] golf handicap, and the other one, the [16:42] CEO and the executive team are totally [16:44] into the customers, the products, the [16:47] technology. They're they're really into [16:49] it. Well, which one of those do you [16:51] think is gonna perform better? [16:54] >> Yeah. [16:54] >> Right. And and by the way, this that [16:57] latter one [16:58] >> I like to call it the missionaries [16:59] versus the mercenaries. [17:02] >> Yeah. So like say more how do you [17:05] describe those? [17:06] >> I kind of like when I think of HubSpot [17:08] in the early days um like you think of [17:11] the first 10 employees like [17:14] the reason the first 10 employees joined [17:16] HubSpot is very different than the [17:19] hundredth to the 110th versus the [17:21] thousandth to the thousandth to the etc [17:24] etc. value prop we we espouse and so [17:27] everyone sort of joined because they [17:28] they love the mission or they like their [17:30] colleagues they didn't play golf uh they [17:33] were completely focused on probably [17:34] worked 100 hours a week and just [17:36] naturally and by the way I think this is [17:38] okay and natural you should put off in [17:40] my mind sorry put off as long as [17:42] possible but there's a natural [17:43] progression where the reason someone [17:45] joins a 10,000 employee company is very [17:48] different than a 10 person and you're [17:50] going to have people who are more [17:51] mercenaries who have a life thank [17:53] goodness and have different priorities. [17:55] So, it changes over time. [17:58] >> And I guess what I'm curious about you [17:59] guys is like it's a 100,000 flocking [18:03] people. That's a lot. How many do you [18:06] actually have that you think are the [18:08] missionary types? [18:12] Look, you know this, Brian, there's [18:14] there's a hundred or a thousand ways to [18:16] kind of simplify the world, categorize, [18:20] etc. I mean, I don't I don't really work [18:23] with the missionary um [18:26] missionary uh uh mercenary model so much [18:30] because what I find is that almost [18:33] everyone is capable of being of having [18:36] kind of missionary zeal about something. [18:39] >> Love that. You know, I I I have um uh a [18:43] brother-in-law who who was a cop and um [18:48] and you know, [18:50] but he was really into what he did [18:54] in in you know, in his job, but he [18:56] because of the nature of the being a be [18:59] being a policeman, he had a lot of free [19:02] time. and in his free time where he [19:05] wasn't, you know, he wasn't fighting [19:06] city hall literally, you know, he he [19:09] was, you know, he was building amazing [19:11] things. He was organizing [19:15] um uh trips for people from his church [19:18] to rebuild houses that got destroyed by [19:20] tornadoes. And he would organize the [19:22] whole thing, man. [19:23] >> They they would show up and like rebuild [19:25] a house in two weeks. Yeah. [19:27] >> You know, like a team of 15. So he he [19:30] was he was missionary in his spare time [19:36] and he was an employee in his job. And [19:40] the way I look at it is every every bear [19:43] person can be [19:46] allin on the bear mission. And the [19:50] question is are we going to create the [19:52] environment that makes that normal? [19:55] >> Yeah. or would you have to be kind of [19:58] weird to actually do that because you're [20:01] you're always fighting city hall? [20:03] >> Yeah. Okay. So, let's just say I'm a [20:05] founder. I'm 100% company. It's scaling. [20:10] It's very flat. I've interviewed [20:12] everyone and I'm going from a 100 to a [20:14] thousand. So, I work with tons of tons [20:15] of CEOs in this spot. How do I avoid the [20:18] oification? How do I avoid the [20:21] orchestra? How do I avoid the mercenary? [20:24] whatever you want to call it. What [20:26] advice do you have for me as as that [20:28] >> I'm on a rocket ship. I'm CEO of a [20:30] rocket ship. 100 employees going to a [20:32] thousand. [20:34] >> Don't hire professional managers. [20:38] >> Huh. But my venture capitalists, the [20:41] first thing they say when I raise my [20:43] series B is, "You need to uple uplevel [20:46] your team." What do I say when they say [20:47] that, Bill? [20:51] >> Look at Look at um [20:52] >> Not kidding, by the way. Look at look at [20:55] a company like Amazon. [20:59] >> They did not hire professional managers. [21:03] They they had the same people who were [21:06] there when there was five people [21:10] when there was a 500 and 5,000 and [21:14] 50,000. [21:16] you know, they because they correctly [21:20] intuited that if they went and hired [21:23] professional managers, they end would [21:25] end up with a dull, mediocre [21:29] organization. And again, by the way, [21:32] it's not the manager's fault. This is [21:36] this is this. It's a system. It's a way [21:38] of organizing. [21:40] and and if you hire but if you hire [21:42] managers who've been trained that that [21:44] is what good looks like that's what [21:46] they're going to implement. [21:48] >> Okay. [21:48] >> Now now you may need to uplevel [21:52] >> like for example you might have a a a [21:54] person who's the finance person [21:57] >> who who was capable of of leading in a [22:00] 10erson organization who's not capable [22:03] of of leading in a thousand person [22:05] organization. Y [22:06] >> but that doesn't mean the answer is to [22:09] hire a professional manager as your CFO. [22:12] It means you got to find a better CFO [22:15] who is dynamic and isn't thinking like a [22:18] bureaucrat. And and you may say, well, [22:20] where do you find those people? Yeah, [22:22] okay. It gets a little, you know, that's [22:23] a longer conversation. Yep. Bill, both [22:26] of us are while we're on this, both of [22:28] us are MBAs. We went to Sloan School in [22:31] Silicon Valley. you dependency is it's [22:35] like people aren't that psyched about [22:37] MBAs like they used to be if they ever [22:39] were. What's your take on that? Like [22:41] you're interviewing somebody for, you [22:44] know, one of these more entrepreneurial [22:46] CFO jobs or whatever it would be. Are [22:47] you allergic to NBAs or you like them? [22:50] Actually, I'm I'm pretty um [22:53] I love education [22:57] and I love people who are lifelong [22:58] learners. I don't I don't spend a lot of [23:01] time looking at whether or not someone [23:03] has an MBA or not. In fact, the the the [23:05] executive leadership team at Bayer is [23:07] six people total, including me. And [23:13] honestly, I couldn't even tell you if [23:15] anybody I know I have an MBA. I I [23:18] honestly couldn't even tell you if any [23:19] of the other ones have an MBA or not. [23:20] They pro probably a couple of them do, [23:22] but I didn't even notice. Um it's it's [23:25] now of course part of that is like when [23:27] you're hiring somebody who's when you're [23:29] at a lower level and you're hiring [23:30] someone who's 25 you might think about [23:33] it differently than when you're hiring [23:34] people you know later in career. [23:36] >> Okay. So vice vice number one got that [23:39] avoid that advice let me let me just [23:41] kind of go through things that CEOs ask [23:43] me about like you're 100 employees [23:46] it's pretty chaotic uh you're growing [23:48] fast and like budgeting is chaotic [23:51] planning is chaotic. Okay, the venture [23:53] capitalist says, "Let's put an annual [23:55] budgeting cycle in. Let's meet our [23:58] budgets. Uh, let's plan the year very [24:01] carefully." And you plan it, let's say, [24:03] in September for the next year to start [24:05] January. And then by the time July rolls [24:07] around, the whole world has freaking [24:09] changed. What advice do you have to that [24:11] CEO who's trying to scale and is dealing [24:15] with a lot of chaos right now? [24:16] >> Yeah. So, [24:19] this is classic. So the way a a complex [24:21] organization, [24:23] a bureaucratic organization handles that [24:26] situation, like okay, we we got to have [24:27] financial discipline, the way they [24:29] handle that is we got to we got to pin [24:33] down where every dollar is going to go [24:35] in advance. [24:36] >> Yeah. [24:37] >> You know, it's a it's kind of logical, [24:40] but it doesn't work. In other words, [24:42] okay, if it's November now, I got to [24:44] figure out how all where all the money [24:45] is going to go. [24:46] >> Yep. [24:47] >> In the next 12 months. um kind of down [24:50] to the department, the activity, you [24:53] know, etc. And and we think when we're [24:56] doing that that we're actually somehow [24:58] creating value [25:00] >> because like we've specified it, [25:02] >> but as you said, [25:04] >> the whole world changes. And by the way, [25:05] that that's true in startups, but it's [25:07] it's pretty true in big multinationals, [25:09] too. [25:10] >> Yeah. Yeah. And and so what we do now is [25:14] we we we we call it a two-tier resource [25:17] allocation approach. We we call it [25:20] dynamic resource flow. So tier one would [25:23] be like your agreement with the venture [25:25] capitalists. Okay. Tier one would be hey [25:28] we're going to spend [25:30] $2 million in the next 12 months and or [25:34] whatever it is $20 million in the next [25:36] 12 months and we're going to deliver the [25:38] at a high level. these are the big [25:40] things we're going to deliver while [25:41] we're doing that. Okay, that's tier one [25:45] and that's where the kind of nailing it [25:48] down because hey, we've committed to our [25:51] investors or we've committed, you know, [25:52] like so that you can't really give on. [25:55] But that's okay because it's it's high [25:57] level. It's it's like now at tier two [26:01] you don't do you so so the normal [26:04] corporate thing is you take that that [26:07] let's say it's 20 million and you divide [26:09] it up into a h 100,000 here and 500,000 [26:14] there and you assign those numbers to [26:16] individuals and you tell them you're [26:17] accountable for this you're accountable [26:18] for this and then they all are incented [26:20] basically to spend whatever that number [26:22] is not more not less okay but of course [26:26] that's stupid because the world's [26:28] changing and you don't want that money [26:30] divided up that way because in by July [26:32] that doesn't make sense anymore. Yeah. [26:34] >> So So instead of doing that, you you go [26:36] with your 20 million number. That's tier [26:38] one. And tier two, you've got a resource [26:41] pool. It's got 20 million in it. You've [26:44] got leaders. Maybe maybe you're you're [26:48] um you've got, I don't know, five [26:50] program teams and an administrative [26:52] team. And the five program teams are [26:54] each working on some, you know, product [26:56] they're developing. And then you've got [26:58] a administrative team. They're [26:59] responsible for keeping the lights on [27:01] and whatever. Okay, you're having a [27:04] conversation, [27:06] a regular conversation about, okay, when [27:09] we took the 20 million and we roughly [27:12] assigned it across those six teams, but [27:15] there's nothing special about that [27:17] assignment. It's not the it's not the [27:19] basis for your end ofear bonus. It's not [27:22] it's not like, oh, if you spend less, [27:24] you're you're great. And if you spend [27:26] more, you're a dog or whatever. It's [27:27] it's just a starting point because we're [27:29] on January 1st. This is sort of where we [27:31] are right now. So now everybody go work [27:34] for 90 days. Do your best to drive your [27:37] product forward to thrill your your [27:40] prospects and to treat the company's [27:43] money like it's your own money. And then [27:45] we're going to come back after 90 days [27:47] and just sort of check in. Okay? [27:49] Oh, and team A says, "Actually, you [27:51] know, we've hit a roadblock and we're [27:53] we're kind of stuck." So, you say, "Oh, [27:56] team A, you're stuck. Let's I tell you [27:58] what, you're you're waiting for feedback [28:00] from a regulator. It's going to take six [28:02] months. So, we're going to take all the [28:03] people from team A and and put them on [28:05] the other teams. [28:07] And um we're going to take all the money [28:09] that was in team A. We're going to [28:10] spread that over to the other teams. [28:11] Okay, let's talk about team B. Ah, team [28:13] B, we're we've got a new opportunity. We [28:16] can actually do more. So, okay, good. [28:18] Let's take some of those team A people, [28:21] right? And and even more than that, [28:23] you're you're doing this in a way that [28:25] it's actually the teams that are sorting [28:27] this out. It's not like the boss is [28:28] deciding all this. Okay? So, that's and [28:31] and and at the end of the year, nobody's [28:33] a hero because they're the their [28:36] allocation at the beginning of the year [28:38] was 5 million and they only spent four. [28:40] No, no. We'll talk about we'll talk [28:42] about your performance at the end of the [28:44] year in a peer review session. Okay, [28:47] let's get into it. So, tip number one, [28:49] careful of hiring professional managers. [28:50] Tip number two is this different type of [28:53] budgeting that's is a high level one, [28:55] but it it sort of the midlevel. It's [28:57] 90-day cycles, not um yearly cycles. [29:01] Let's talk about [29:02] >> it's 90-day cycles and it's not the [29:04] basis for performance management. See, [29:06] that's where a lot of a lot of [29:09] bureaucracy gets created by by each team [29:12] thinking, "Oh, it's my job to spend this [29:14] much, not more, not less." You're kind [29:16] of locking it in where you say, "No, [29:18] that that's just that's kind of funds [29:20] available, but you should try to spend [29:23] less if you can and and make more [29:25] progress if you can, right?" And we'll [29:26] talk about how you did later. [29:28] >> Okay. So, I I'm I'm Joe Smith. I'm a [29:32] frontline manager, coach, just I'm the [29:36] CEO and I'm trying to design the [29:37] organization like how do performance [29:40] reviews work? If you're a 100 person [29:42] company, you don't want all this this [29:43] complexity creep in. How do how does the [29:46] work chart work and how do performance [29:47] reviews work? And Brian, a little [29:50] caveat, okay? I mean, I don't think 100 [29:54] person companies are that much of an [29:57] intellectual challenge from a an [30:00] organization model standpoint. In [30:02] general, if you got a bureaucratic 100 [30:04] person organization, then man, I don't [30:07] know, something's wrong. Fine. But by a [30:09] thousand people, it creeps in. [30:10] >> Yeah. Thousand people, different story. [30:12] Okay. [30:12] >> So, you're at a 100, you want to go to a [30:14] thousand. You don't want to be [30:16] sclerotic. [30:17] >> Yeah. Yeah. Here here's a here's a [30:19] departure. [30:21] Usually, if you're going from a hundred [30:23] to a thousand, and I've been on that [30:24] journey, that's where that is generally [30:26] where you start bringing in the [30:27] professional managers. [30:29] It's it's usually more in the like 500 [30:32] going to a couple thousand. You can kind [30:34] of get away with the really informal [30:36] stuff. I don't know, up to 300, 500, but [30:39] then it starts to big decision you have [30:42] to make is are you going to make [30:43] managers responsible for performance [30:45] management? [30:46] >> Okay. or are you gonna draw on the power [30:49] of the of the [30:51] >> of of all the peers and the doers? [30:54] >> Okay. [30:54] >> And when you make that decision, you are [30:57] sort of deciding the fate of whether [30:59] this is going to continue to feel like a [31:01] startup or whether it's going to be [31:04] really take a a major fork in the road [31:08] towards a hierarchical organization. [31:10] >> Got it. Okay. So, the performance review [31:12] comes around every 90 days, 180, how [31:15] often? And then who who decides if I'm [31:18] going to get a 2% raise or a 10% raise? [31:21] >> I I'll give you a model for it. It's not [31:23] the only one, but think about it this [31:25] way. Uh we're working our way to a [31:27] thousand people. Yeah. You're probably [31:29] going to have [31:31] you're probably going to find that you [31:33] need, I don't know, [31:36] 15, 20, maybe 30, even 40 managers. If [31:41] you had 40 managers, they'd have 25 [31:43] direct reports on average. Okay. [31:47] So, you're somewhere in this range of [31:49] like 25 to 50 direct reports per [31:52] manager. If you're in that range, then [31:55] you're first off, the managers, they're [31:57] not reviewing and approving everything. [32:00] You're hiring smart people. These smart [32:02] people, they they they [32:05] worked hard to get to your company, you [32:07] know? Uh they don't need to be told what [32:10] to do and babysat. They're going to have [32:13] they're going to be all on teams. Yeah. [32:16] >> And they will uh every 90 days they're [32:19] going to get feedback from their peers. [32:21] Whoever they worked with the most [32:23] they're going to get feedback and it's a [32:24] simple feedback system. They got a one [32:27] that means great job. Yeah. [32:29] >> Love working with you, you know, great [32:31] impact. Uh two is wow, this person's [32:34] really off the charts. like they are [32:37] they're clearly performing above what [32:40] anybody would ever normally expect. [32:43] >> Yeah. [32:43] >> And a zero is like hey uh [32:47] >> needs improvement. [32:48] >> Not good enough. [32:49] >> Yeah. Needs to be better. Okay. And and [32:52] then you get they're answering two [32:53] questions. One question question is what [32:55] was this person's major impact in the [32:57] last 90 days and what could they have [33:00] done to be even better? [33:01] >> Yeah. [33:02] >> Two questions. Every 90 days, everyone [33:05] in the organization is getting th those [33:08] questions answered from all their peers. [33:11] And it turns out people actually care a [33:14] lot more what their peers think than [33:16] they think what what their boss thinks. [33:19] >> Okay. How about the cashola? Yeah. [33:21] >> How do you describe the cashish? How [33:23] about the cashish? [33:24] >> Yeah. Here's a learning. Here's a [33:25] learning. And I've I've um I've heard [33:29] this from a number of people who've been [33:30] down this path and I've come to believe [33:32] it through my experience and and the [33:34] experiments that I've run. What you [33:36] don't do is you don't take that rating [33:38] that I just described. You get at the [33:40] end of the year and let's say you've got [33:42] 40 numbers, right? Because you you've [33:44] done it every 90 days and you've worked [33:46] with let's say 10 people each 90 days. [33:49] So you let's say you got a um this one [33:52] person's got a 1.2 two and somebody else [33:54] has got a 1.3 and somebody else has got [33:57] a 0.9. [33:59] That doesn't become their multiplier. [34:02] >> Okay. [34:03] >> For their bonus because if you do that, [34:06] you sort of weaponize the peer feedback [34:09] system. [34:09] >> Yeah. Of course. Yes. [34:11] >> Then people they feel like [34:12] >> I give you a one if you give me a one, [34:14] right? Of course. [34:15] >> Yeah. or or or like I can't just rate [34:18] the person as I believe I should rate [34:20] them cuz I'm thinking, "Oh, I think they [34:22] really need the money or something." You [34:23] know, it's just you don't want to do [34:26] that. And by the way, people are It's [34:28] really funny. I do I often do this in [34:30] large groups. I'll ask people. I say, [34:32] "Who do you think has a a better more [34:35] objective view of your impact, your boss [34:39] or your peers?" You know, and I ask [34:42] like, "Okay, who says boss? [34:45] Who says Pierce? [34:47] >> Right. [34:48] >> It'll be like It'll be like 98 of a 98 [34:51] out of 100 people will say Pierce. [34:53] >> Yeah. [34:53] >> Then I say, "Who do you think should do [34:56] your performance evaluation? Your boss [34:58] or your peers?" [34:59] >> Boss. [35:01] Pierce. [35:04] Okay. This is this is um we're we're [35:06] working with humans. Humans are not [35:09] logic machines. [35:10] >> No. you know, and and so we're so we're [35:14] implementing this now at Bayer [35:16] worldwide. We're at 90,000 right now. Uh [35:18] when I started, we had a little over [35:20] 100,000. We're at 90,000. By the way, [35:22] most of the positions we've eliminated, [35:24] the vast majority were management [35:26] management positions. What we're saying, [35:29] we're we're implementing this peer peer [35:31] uh um uh assessment, pure feedback. [35:34] Okay? And we're telling people, hey, [35:36] everybody breathe deeply, right? We have [35:40] great people. This is we we want to [35:43] learn from our peers because our peers [35:45] know us better than our managers do. And [35:49] and if if one of the major goals of the [35:51] people of Bayer is to grow and to get [35:54] better as a result of being a part of [35:56] this team, then we owe it to each other [35:59] to give each other this feedback. [36:01] >> Yeah. We're going to put a we're going [36:03] to put a hard break between the peer [36:08] feedback and the comp. [36:12] And it doesn't mean that it's [36:14] irrelevant. So if I'm a manager of 50 [36:17] people at the end of the year, I have [36:21] what my eyeballs have witnessed over the [36:23] year. I have the this feedback from you [36:27] know and I have the the the qualitative [36:30] and the quantitative. I have all that. [36:33] Um I yeah I can see what teams have [36:36] delivered. I have a variety of sources [36:39] of information and based on that I got [36:42] to make some decisions about [36:44] >> as the manager. Okay. So the manager [36:46] decides at the end of the fine. Yep. [36:48] >> Fine. Okay. [36:49] >> Got it. Okay. Titles. So, um, you know, [36:53] a lot of Silicon Valley startups these [36:54] days are like, "We're not doing titles." [36:56] What's your reaction? [36:57] >> I actually don't even really care. I I [36:59] can't [36:59] >> Well, your employees care. [37:01] >> Yeah. You know, I we we first off, it's [37:05] funny. We haven't we haven't tackled [37:08] this in earnest. It's funny. It hasn't [37:10] been a big topic. It doesn't mean that [37:12] nobody cares about titles, but I think [37:15] we we sort of say, hey, um, [37:19] if you if you need a certain title to [37:21] get your job done, then, you know, like [37:25] let's talk to your manager about it and, [37:28] you know, talk [37:30] this isn't a conventional wisdom you're [37:31] blowing up. [37:33] >> No, because you know, titles are are one [37:35] of those things where you can go around [37:36] in circles. Y [37:38] >> and [37:38] >> at the end of the day, [37:40] >> if your goal is to advance science and [37:43] to do great things for customers, [37:45] >> spending a lot of time talking about [37:47] titles is not doing either of those [37:48] things. [37:49] >> That's great. Coming from you, you're [37:51] the CEO, you have a good title, but like [37:52] you're a middle manager. So, I'll tell [37:54] you my experience with this. I tried to [37:56] get rid of titles at HubSpot, probably [37:58] around 50 employees. I was like, it's [38:00] ridiculous. We spend so much damn time [38:02] talking about this title. It adds no [38:04] value to our customers. And I got rid of [38:06] them. And then I was lobbied hard on [38:09] this the titles thing. And the thing [38:11] that kind of got me was [38:13] I'm I'm not going to say let's say Frank [38:15] Smith went home. He was going home for [38:17] Thanksgiving and he was a he was a [38:20] manager before and now he was a nothing [38:22] and he's like I know I'm going to see my [38:24] uncle Joe and my uncle Joe's be like [38:26] okay did you get promoted? Are you a [38:28] director now? And he's like no I didn't [38:30] get promoted. I'm a nothing now. And by [38:32] the way I'm a sales man. I used to be a [38:34] sales manager. Now, when I call on [38:36] people, they don't know where I am in [38:38] the hierarchy. And and like Napoleon [38:40] used to say, it's amazing what a soldier [38:43] will do for another color ribbon on [38:45] their shoulder. And so, I got kind of I [38:48] got worn down on it and I brought titles [38:49] back, but but anyway, it doesn't sound [38:51] like this is one of your your trust [38:53] busting ideas around CEOing. [38:56] >> Yeah, it's not. So, so in other words, [38:58] I'm not I'm not trying to get rid of [39:00] titles. It's just not It's kind of like [39:02] the org chart. We've done this with the [39:04] org chart, too. In our model, we still [39:06] have an org chart. We just put it I [39:08] always say we put it at the back of the [39:10] room. It It's just It's like it's not [39:14] that important. And And I know you could [39:16] say, "Oh, yeah, but it it it determines [39:18] pay and pay is important, but the org [39:22] chart is not that important." U you [39:26] know, but I tried that, too. And I I [39:28] remember I I I didn't never had novice [39:31] and I there was a whiteboard near my [39:33] desk and I drew on the whiteboard [39:34] instead of have an or chart I drew this [39:36] is what I think our influence chart is [39:39] and bunch of boxes and arrows and [39:41] whatever and I asked it like can you [39:44] look at our email instance and see who's [39:46] got the most influence and they took a [39:48] crack at it and anyway the most powerful [39:51] person at HubSpot at the time this is [39:52] probably 30 people was a guy named Brad [39:54] Coffee who ironically came, he was our [39:58] first intern and just knew everything. [40:00] And so I wasn't the most influential [40:02] person. It was this, you know, young guy [40:06] who was really capable. Um, and I tried [40:08] that for a while and I I sort of got [40:10] talked out of that, too. And one of my [40:12] regrets, Bill, over time is I had some [40:16] ideas that were like counterintuitive to [40:18] how you build an org and a little bit [40:21] like your ideas, and I got talked out of [40:23] them over time, and I regret some of [40:25] that. Hm. [40:27] Yeah. Here's the tricky thing and and I [40:31] think it just it takes practice and it [40:33] takes experimentation. [40:36] Um because [40:38] you now you notice I said org charts [40:40] become less important. And what you just [40:42] described was something where you're [40:43] trying to replace an org chart with some [40:45] other kind of chart. But I'm not doing [40:48] that either. [40:50] You see it's it's sort of like a lot of [40:53] these things. can be various methods or [40:57] or like titles versus no titles, you [40:59] know, like saying there's going to be no [41:01] titles is the CEO being in control. [41:04] Banishing titles. Saying, you know what, [41:07] titles just don't matter that very much. [41:09] If if you want some big title, knock [41:11] yourself out. But frankly, that's just [41:13] not where the organization is going to [41:15] put its energy. That's actually not [41:17] control. [41:18] >> That's kind of like saying, we're going [41:20] to we're going to trust people. And now [41:23] again, be really careful here. I'm not [41:26] saying that what we're doing at Bayer is [41:28] the old uh hire great people and turn [41:31] them loose. That's a that's a failed [41:34] plan. That that works. If most people [41:38] who say that, they only say it because [41:40] they're not really doing it. Um or if [41:43] they ever try to really do it, like [41:45] literally turn everyone loose, it it [41:48] lasts about a day. Uh it's chaos. And [41:51] nobody likes chaos. People will take, [41:53] you know, dictatorship over chaos [41:55] anyway. So it's we we took out a lot of [42:00] stuff, but we put back a lot of stuff, [42:03] too. I mean, we didn't put it back. We [42:05] put in stuff. So, for example, 90 days, [42:08] we have these 90-day rituals. You know, [42:11] every 90 days, the team comes together. [42:13] First thing they do is they do a retro. [42:15] Look at, hey, how did things go the last [42:17] 90 days? Did we achieve the three [42:20] outcomes we said we were going to [42:22] achieve? And if we didn't, what why not? [42:25] What went wrong? You know, so again, not [42:28] spending days staring at our belly [42:31] buttons, but like spending, you know, an [42:33] hour. Hey, what what went wrong? Now, [42:37] what what are the most important things [42:38] for the next 90 days? By the way, are we [42:41] still are we still comfortable with our [42:43] long-term vision on our team? like we're [42:46] still trying to launch product X with [42:48] certain features by certain time. If [42:50] that if that's that team's kind of [42:52] longer term vision, still feeling right. [42:55] Yep. Okay. Um then okay. Now, what are [42:58] we going to do the next 90 days? This is [43:00] all all and and we have outcomes, not [43:03] outputs, [43:05] not not like um we're going to sell [43:08] more. That's an output. you know, [43:10] outcome would be we're going to improve [43:12] the performance of this part of the [43:14] product. [43:15] >> Yeah. [43:15] >> By so much. Um or we're gonna, you know, [43:19] whatever. It's something the customer [43:21] says they need. We're going to deliver [43:22] that. And and so these are these rituals [43:25] and the fact that everybody's on 90day [43:27] cycles. [43:29] The this is a a new or a different way [43:31] of operating, but it's not one that [43:34] lacks discipline. Every, by the way, [43:36] everyone's on the same 90-day cycle. the [43:38] ideas so that if this team dissolves, [43:41] there's somewhere for the people to go [43:43] because there's other teams forming. You [43:45] see? So, it's it's um it's it's one of [43:48] these things that a lot of times people [43:50] get trapped in the idea of control [43:53] versus sort of decentralization kind of [43:55] anything goes. We're trying to put in a [43:58] place, think of it more like a a a [44:00] really stiff backbone. Y [44:02] >> but the arms and the legs can go, you [44:05] know, go wild. [44:06] >> Okay. I like that. Okay. All right. So, [44:08] you came into Bear [44:11] over a year ago. [44:14] Yeah. You made you you pretty quickly [44:17] you made some massive changes. I have [44:19] and I have a couple questions on that. [44:20] Um I guess my first question is [44:25] um [44:27] do you think you went too fast or too [44:29] slow on that? [44:31] H [44:32] >> um I I don't know if you're going to [44:34] like this answer, but um [44:38] I think on the one hand we went really [44:41] fast seems that [44:43] >> um [44:45] and on the other hand I I don't think [44:50] how I say bear [44:52] was facing a lot of pretty big [44:55] challenges and in addition to some sort [44:58] of technical challenges we faced we had [45:01] this organizational problem where [45:04] whereby the people of Bayer were [45:06] passionate about the company's mission, [45:08] about the about the quality of the [45:10] science, about great people. Um, right. [45:14] But everyone agreed, hey man, we can't [45:16] get anything done around here. I see [45:18] >> this place is so bureaucratic. [45:20] Now, as I said earlier, I mean, I don't [45:24] know that I don't know if Bayer was the [45:26] most bureaucratic company I've seen. [45:28] Maybe not. But the fact that some of the [45:31] some of the technical challenges we [45:33] faced made that bureaucracy really [45:35] unacceptable, [45:37] you know, like people will put up with a [45:38] lot of bureaucracy if sales are growing [45:41] 10%. Um, and we, you know, we were [45:44] facing patent experies and things. So [45:46] people were like, hey, we're we're [45:48] bureaucratic and we're hosed, man. We we [45:52] got to like this isn't going to work. [45:54] So, um I don't think we could have gone [45:56] slower because if we had gone slower, we [46:00] you know, we're facing existential [46:02] threats. [46:03] >> Yeah. [46:03] >> So, I I I kind of think it's a little [46:06] bit like baby bears porridge. I I think [46:07] we've probably gone about the right [46:09] speed. [46:10] >> Okay. and [46:12] kind of listening to you. This is going [46:15] to sound weird, but like you some of [46:18] your ideas sound like Tony Sha's ideas, [46:21] the CEO of Zapos a while back who had [46:25] this idea of hocrisy and he was trying [46:27] to rethink how an organization worked [46:30] and um actually I was kind of inspired [46:33] by Tony back in the day. Um, [46:36] who in like you're doing some pretty [46:39] unusual stuff. Who are you? Are you just [46:42] kind of making it up as you go? Am I [46:44] right? Was are who who inspires you? Is [46:47] Elon inspiring you? Is who is it? Who is [46:49] the best turnaround story that you might [46:51] be follow? Like who are you looking up [46:53] to? Well, first off, let me say [46:58] there've been very few turnaround [47:00] stories of this kind. Most of the [47:03] organizations that are running a system [47:07] similar to what I've described, [47:08] >> yeah, [47:09] >> they built it from the ground up or they [47:11] implemented it early on. [47:12] >> Yeah. [47:13] >> So, actually my kind of specialty is [47:16] doing this in places that are already [47:18] established. Y [47:19] >> and I I um I was I became CEO of [47:22] Janentech. Uh [47:25] I basically landed in the role in in [47:28] second half of 2016 [47:30] >> and I found that hey things were things [47:34] had gotten remarkably bureaucratic for a [47:37] company that was known for innovation. [47:39] >> Yeah. [47:40] >> The innovation the innovative spirit was [47:42] still there. The the culture was okay [47:46] but the mechanics were broken. [47:48] >> I see [47:48] >> by the levels and by the governance [47:51] processes and all this stuff. Right. And [47:54] at that time I had no idea. I had zero [47:57] idea what to do about it. I mean I [47:58] guarantee you I had no idea. In fact I [48:01] was almost despairing because at that [48:05] point I'd been I'd been around the [48:08] organization for 10 years and I knew [48:11] that during those 10 years there had [48:12] been non-stop efforts to stop [48:14] bureaucracy. [48:16] >> Yeah. [48:16] >> So [48:16] >> didn't work. [48:18] >> Yeah. And and so that's that's where I [48:20] mentioned you know this sort of insight [48:21] that like hey it's not bureaucracy is [48:25] not an external thing that comes in and [48:27] and infects this sort of healthy body. [48:31] The body is designed wrong [48:33] >> built built bureaucratic from the ground [48:35] up. [48:36] >> Yeah. It's been built it's been built [48:38] that way. So um so I spent a couple [48:41] years there and then I became the CEO of [48:43] Rosh uh Pharma which is the parent [48:45] company of Janentech and and so I had uh [48:49] yeah like six years [48:52] >> to practice [48:52] >> half seven years to practice this stuff [48:55] before I got to Bayer [48:57] >> and now but I that's part of the answer. [48:59] So it's not like I just started we [49:01] started making this stuff up when I got [49:02] to Bayer that that that could never have [49:05] happened. It would have been [49:06] overwhelming. Um, there were lots of [49:09] inspirations and it wasn't just me. I I [49:11] mean there was a bunch of people I was [49:13] working with and I I I I could barely [49:17] take credit for anything that's in this [49:19] system. Almost all the insights came [49:21] from somebody else. Um, there was a book [49:24] I read called Reinventing Organizations. [49:27] >> Yeah. [49:27] >> By a guy named Lulu. Have you seen it, [49:29] Brian? [49:30] >> Yeah. I don't think I read it, but I [49:31] remember hearing about it. [49:32] >> Yeah. And it and it talks about teal. [49:34] Um, and maybe you've heard that term. [49:37] That's a really interesting read that [49:39] was that was there um got me started. I [49:42] learned about this organization Bertzorg [49:44] in in uh the Netherlands. That's [49:47] probably the most radical because they [49:49] have 16,000 employees and two managers. [49:53] >> Interesting. Okay. What's it How do you [49:54] spell that? [49:56] >> It's like B U R T Z. [50:01] >> One of those. One of those. Okay. [50:03] >> Yeah. And And it it it basically Yeah. [50:06] So the thing and again I'm not I'm not [50:10] hung up on the statistics. [50:13] It's the shock factor because you go wow [50:16] 16,000 employees and two managers. Well [50:18] if um if you have a performance problem [50:22] who do you think deals with that the [50:23] managers or the employees? [50:24] >> I think you're going to say employees [50:26] >> right? If uh got to decide about um [50:31] you know u we we need our team can't [50:34] handle the workload um we need to split [50:36] into two teams. Who who do you think [50:38] decides that the management or the [50:40] employees? [50:42] >> And so on [50:43] >> performance evaluation who do you think [50:45] does that the management or the [50:46] employees? [50:47] >> Employees. [50:47] >> And the answer to everything is [50:48] basically the employees. and they have [50:51] like 30 coaches and 30 [50:56] whatever you call it back office, you [50:58] know, payroll and whatever, right? And [51:00] then and then the other tens of [51:02] thousands are all individual [51:04] contributors um doing their work and and [51:08] so going to school on that and then [51:11] saying how in the world do you apply [51:13] that to a complex integrated product [51:17] development life science company where [51:20] there's so many interdependencies [51:21] because at Bertzorg they they have a [51:24] bunch of teams that are like yeah [51:26] thousand literally thousands of teams [51:28] but they're all kind of doing the same [51:30] work because they're they're providing [51:32] home health care services. [51:34] So they they're they're somewhat [51:36] independent, right? They they don't have [51:38] to coordinate across all these teams. [51:40] But if you're if you're developing a new [51:42] pharmaceutical, you know, a new [51:44] medicine, that might require two or [51:47] three thousand people to put their hands [51:48] on that over a over a 12 or 15 year [51:51] period from all different functions and [51:54] right. So [51:55] >> so that's why we don't have two managers [51:58] uh at Bayer. You need a little more [52:00] coordination than that. [52:01] >> You need more Yeah. more more support [52:03] and coordination. [52:04] >> Okay. One thing I've noticed about a lot [52:08] of the CEOs I admire like Steve Jobs [52:14] and Bill Gates and Jeff Bezos and Elon [52:18] Musk and Jensen Hong, mostly tech is [52:22] they have exceptionally thick skin and [52:24] they're almost immune to criticism. Like [52:26] they're alligator skin. you must have [52:29] gotten a lot of criticism for your [52:32] approach particularly from all the [52:33] layers that you you probably pushed out [52:36] or do you have exceptionally thick skin [52:38] or does it does it hit you between the [52:40] eyes and for me I don't and I think one [52:43] of my weaknesses as a CEO is I'm a bit [52:45] of a pleaser I wanted to be popular and [52:48] as I look back at my tenure I kind of [52:50] wish I I was tougher and I I could [52:53] withstand criticism better but where are [52:56] you on the spectrum of alligator skin [52:58] versus me. [53:00] >> Let let me offer you an observation. [53:02] Those CEOs you mentioned, they're a bit [53:04] of a type. [53:05] >> They are [53:06] >> these are these are kind of innovator uh [53:09] product innovators [53:12] and that is that's that can be a great [53:15] kind of CEO, great kind of leader. Um, [53:18] but that's a very distinctive kind of [53:20] leader. And [53:23] uh, it, by the way, it has certain [53:26] positive features and others that are [53:27] not so positive. I I'm I'm not going to [53:29] name names because I don't want to get [53:31] into name calling or that kind of thing, [53:32] but some of the people on your list were [53:34] pretty pretty hopeless organization [53:37] managers and they had to put people in [53:40] place around them that could actually [53:41] make the organization work because if it [53:43] was up if if they were in charge of [53:45] making the organization work, it [53:46] wouldn't it would fall apart. [53:48] >> Yep. [53:49] >> All right. So, you kind of [53:50] >> One, by the way, one thing I noticed [53:52] about all of them [53:53] >> is [53:55] >> they're all lifelong learners big time. [53:57] >> Yep. Yep. And they're all a bit of [54:00] compulsive. They're obsessed. [54:02] >> And yeah, they did bring in people, but [54:05] most of them got better at it over time. [54:06] Like Steve Jobs got a lot better at it. [54:08] Bill Gates got a lot better at it. They [54:09] all got better at it over time. They [54:11] they knew to if they they want to [54:14] achieve their dream, they had to improve [54:15] on. So they all worked on their the CEO [54:18] craft. Anyway, back to you. Are you [54:21] thick or thin skinned? [54:22] >> Yeah. Okay. Okay. But but I I just I do [54:25] want to make the point. [54:26] >> Okay. Okay. [54:27] >> You got to decide what you're trying to [54:28] be. You know, in other words, for your [54:31] listeners that are that are trying to [54:33] grow as a CEO, you got to be you got to [54:36] be the person you are, too. Do you know, [54:38] like I'm um I'm I'm a nerd big time, you [54:44] know, engineer. I love the product [54:47] stuff. I love [54:49] >> You're a scientist, right? [54:51] >> I'm a chemical engineer. I have I have a [54:53] masters in chemical engineering and and [54:55] you know so but I'm but I've decided [54:59] that I'm not I'm not using any of those [55:02] guys you mentioned as my phenomen [55:04] >> because a lot of those guys they they [55:07] are really product visionaries like that [55:10] is their thing [55:11] >> and that's a beautiful thing that's a [55:13] beautiful gift [55:14] >> but um I'm going on different mode I [55:18] want that if if we have 90,000 people at [55:21] bear I want to have I if in those 90,000 [55:25] there's a thousand that could be product [55:27] visionaries, I want to make sure that [55:29] they're they're product visionaries [55:31] coming through. [55:33] >> Yeah. [55:33] >> That and and so um so I'm not talking [55:37] about being a professional manager, by [55:38] the way. I I faulted that. But anyway, [55:41] you just got to have a you got to have a [55:42] picture for what it is you're going to [55:44] be. And then back to the thick thin [55:46] skin. Um, I'm [55:50] I'm I'm ex I'm sorry. I'm internally [55:53] referenced. [55:55] >> Okay. [55:55] >> But I'm but I'm I'm socially sensitive. [55:59] So what I mean by this is um if somebody [56:03] f first up internally referenced versus [56:05] externally referenced. Some people do [56:06] you know you ask them hey h how are you [56:09] doing today? They say well how are you? [56:11] you know, like they they're they're they [56:14] so reflect the people around them and if [56:16] if everyone else around them's happy, [56:18] they're happy, you know, as an example. [56:20] And that and that's I'm not judging [56:22] that. That's [56:22] >> is that a thing that people talk? I've [56:24] never heard of that internally [56:25] referenced. Is that a [56:26] >> Yeah, there's [56:27] >> is that like a psychology term that I [56:29] missed somewhere? [56:29] >> Thing called neurallinginguistic [56:31] programming and there's like a hundred [56:33] different ways to um it's actually [56:35] pretty cool. parametrically you can you [56:38] can kind of form [56:40] judgments. I don't mean negative [56:42] judgments but like just get to [56:43] understand people better. I'll give you [56:45] another example R. Another one's a time [56:47] constant. You know what's your time [56:49] constant? So some people a long time is [56:53] you know a century and other people a [56:56] long time is six months or a month. [56:59] >> You know [56:59] >> what's your [57:01] >> I'm kind of in between. I'm probably a [57:04] long time. you're internally referenced. [57:06] >> Internally referenced. [57:07] >> I'm a little externally referenced, [57:08] which I think is a bug, not a feature. [57:10] >> Yeah, that it can be being externally [57:13] referenced um makes you a lot better at [57:16] a lot of things like you tend to be [57:17] better with empathy. You tend to be [57:19] right um you don't miss people's [57:21] birthdays or you you don't you know you [57:23] don't say the wrong thing and offend [57:25] someone as much if you're externally [57:27] referenced generally. Okay. Um, it can [57:30] be really hard on you, [57:32] especially if you're in the business of [57:35] making hard decisions or changing [57:37] things. So, I'm I'm I'm internally [57:40] referenced, but I actually care a lot if [57:42] if somebody says, "I hate you." Well, I [57:45] got some hate mail recently. [57:48] >> Uh, actually, not it was about a [57:51] product. It was a It was like a customer [57:53] kind of thing. and and and the person [57:55] really said some really mean things [57:57] about me and they were just they were [58:00] venting, but I wrote them back and just [58:02] said, "Hey, I'm really sorry about this, [58:04] but I I don't think you're what you said [58:05] is quite fair. You know, let me say [58:07] this." And and then they wrote me back [58:09] and they were like, "Oh my goodness, I'm [58:10] so sorry I wrote that." Uh I I didn't [58:14] think that that someone would actually [58:15] read this and and um so I I do I do [58:19] care. Um, but my my personal So maybe my [58:23] my ethics is that I care what people [58:25] think, but my personality is that that [58:28] I'm pretty Yeah. [58:30] >> Okay. [58:31] >> Yeah. [58:32] >> Got it. Okay. One other topic while I [58:34] got you. This is in in my world. There's [58:37] a lot of CEOs who've been CEO for a [58:39] couple of decades. like I'm in this [58:41] segment of the software industry [58:42] software as a service and some of the [58:45] CEOs are getting tired um and they're [58:48] thinking about you know retiring what [58:50] advice do you have to those CEOs and to [58:53] the boards of directors of those [58:55] companies if they're hiring should they [58:57] hire internally or externally [59:00] um and why and the trend in Silicon [59:03] Valley is is internal um Google [59:06] Microsoft like most of the big ones But [59:09] there are some external that worked out [59:11] like Uber's worked out pretty well. Um [59:14] so advice for boards internal or [59:16] external pluses and minuses and then I [59:18] guess if external well answer that one [59:22] first then we'll get [59:23] >> so you have to understand I'm I'm like [59:26] the opposite of say your experience [59:28] because you became CEO at a very young [59:30] age and you grew with the company [59:32] >> and I um I actually I kind of done I've [59:37] done almost every level job in a [59:38] company. Yeah. Like if if Bear has if if [59:42] Bear had 12 layers when I arrived, I I [59:45] pretty much worked at each of those. [59:46] >> Yeah. [59:47] >> And um which is which is a um it's [59:51] actually a real asset in a way. Um but [59:54] on the other hand, it's like you can age [59:56] out, you know what I mean? Like that [59:59] doesn't work if it uh you know, if you [60:01] turn 100 before you get to the top, then [60:03] tire out. [60:04] >> Yeah. That's not going to really work. [60:05] Uh I've also been exposed to these [60:09] questions before about like for example [60:12] I've been the guy who was ready to be a [60:14] CEO but because nine out of 10 large [60:18] companies are going to hire inside it's [60:21] almost like the the supervisory board if [60:25] they're going outside it's it's a mark [60:27] of a crisis a problem [60:29] >> something's wrong something's wrong [60:30] >> like they didn't do their succession [60:32] planning right [60:33] >> okay and and so I've even the guys at [60:36] times sitting there thinking, "Wow, I'm [60:38] really ready to do this and I've got all [60:40] the experience. I got, you know, because [60:42] my my first I got my first job as as the [60:45] CEO of of a publicly traded company at [60:47] 56." [60:49] >> You know, there were times earlier on [60:50] when I was as ready as I was when I was [60:53] 56, but I I just didn't get the job. Y [60:56] >> and there were times where I saw big [60:57] companies hiring some internal person, [61:00] even some internal person that I knew, [61:02] and I thought, you know, they really [61:05] settled there. Um uh and and so I I [61:09] think the the best answer I can give you [61:11] is [61:12] >> you got to hire someone who's awesome. [61:15] And a lot of times what CEOs do is they [61:18] they have someone who's a number two. [61:20] >> Yep. and they think that that's the [61:22] natural person and they don't realize [61:25] that this is a person who thrived in [61:27] their shadow. Um but whether that person [61:30] really is going to stand alone and be [61:32] the person who because or they think oh [61:35] they'll maintain what I built but [61:37] there's no maintenance mode. [61:39] >> Yeah. I don't think there is either. If [61:40] you're in maintenance mode it's like [61:42] you're either changing or you're dead. [61:44] >> Yep. [61:45] >> Um okay. If you're a board of directors [61:48] and you're hiring from the outside and [61:50] you hire that person, what advice do you [61:53] have to that CEO who's joining? [61:57] >> You mean like they're are they're [61:58] interviewing or they're they're they got [62:00] the job and now they're coming in. [62:02] >> Yeah. You hired a new CEO from the [62:04] outside. You're let's say Google. Let's [62:06] just say if Google let their CEO go and [62:09] they're hiring someone from the outside, [62:10] what advice do you give to that new CEO [62:12] of Google if that were the case? [62:15] >> I don't know. You got to get to know the [62:16] company. You You gotta You got to get to [62:19] know the business. I don't know if I [62:21] have any big brilliant insight on this. [62:25] You know, [62:25] >> let me let let me let me put some words [62:28] in your mouth. I think what you did was [62:30] you kind of tore the house down and [62:32] rebuilt it. At least the org structure [62:34] and the way it was managed. And I [62:36] actually think that's right. If you're [62:37] looking from the outside, some [62:39] something's probably wrong. And I think [62:42] the first I think you should be [62:43] aggressive. And I think you should be [62:45] aggressive really. I think you've played [62:46] your cards right. Um and so like someone [62:49] from the outside takes over Google. I [62:51] don't think they should make incremental [62:52] change. I think they should make large [62:54] change. Um [62:56] >> I I think you I think you played your [62:58] cards very well. And the other [62:59] turnaround that I really respect is Dra. [63:01] I don't know how to say his last name at [63:03] um Uber. You know, he gets criticized a [63:06] lot, but I think he's done a really nice [63:07] job there. Uh changed culture a lot. [63:09] Like right out of the gate, big change. [63:12] I think that's the playbook for [63:13] external. I actually oddly think that's [63:16] the playbook for internal. Like I, you [63:19] know, we did this at HubSpot. Uh Yamin [63:22] Rangan, who is my number two, took over [63:24] when I uh stepped aside and she's done [63:27] great. But actually in in a little bit [63:30] of the advice in the in the playbook was [63:32] like keep it going. Let's not mess it [63:33] up. I actually think the playbook if I [63:35] had to adise her, you know, today was [63:37] like go make make change right away. [63:40] make big change right away because I [63:42] don't think you want to be a I think [63:43] caretaker CEOs are I think that's a [63:47] death no. [63:48] >> Yeah, you're you're right on. You know, [63:50] I think probably the the point is [63:53] almost every organization [63:56] whether they're whether they're in a [63:57] crisis or whether they're in a great [63:59] place. If if they're in a crisis, then [64:02] obviously the new leader needs to come [64:03] in and really quickly get to know the [64:06] people, figure out who they can trust. [64:10] uh you know assess the situation and and [64:13] come to at least some highlevel [64:15] conclusions and start moving that [64:16] direction as fast as they can bringing [64:19] the organization along. [64:22] That's kind of obvious. But if if you're [64:24] if you're named to be the CEO in some [64:26] place where let's say there's been a [64:28] successful CEO for 10 years and you're [64:31] coming in, you should never think like, [64:34] "Oh, this is just going to be I just [64:36] need to keep it going." Because chances [64:38] are whatever flaws that person had [64:40] because we all have flaws. [64:42] >> Yeah. [64:42] >> The organization's going to reflect [64:44] those flaws. [64:45] >> Yep. [64:46] >> And if they were flaws of inaction, if [64:49] they were kind of had like swept things [64:50] under the rug, if they let the [64:52] organization get too bloated or too, you [64:55] know, like decision-m slowed down and it [64:57] can be really um misleading because you [64:59] can have a situation where you come in [65:01] and like, oh, the employee engagement [65:03] survey is off the chart. Yeah. and [65:04] everybody loved the old CEO [65:07] and then you come in and you find like [65:09] oh but everyone says they can't get [65:10] anything done and you might think oh [65:13] well I guess I don't need big changes [65:15] because you know everyone liked it. Now, [65:18] sometimes people can really like some [65:20] place because it's comfortable and [65:23] because they like their peers and they [65:25] like the sound of the mission, but if if [65:27] they're not getting a lot done, then [65:29] then the organization's kind of become [65:32] content. And that's really dangerous. [65:35] So, you got to you might think, oh, I'm [65:38] just coming in and everything's going to [65:39] be, you know, kind of smooth and like [65:42] and you may find, oh, wow, this this [65:45] place actually needs a reboot. Um, even [65:48] though all the all the signs look good. [65:51] >> Yeah. [65:52] >> Okay. Last question. I a lot of the [65:55] listeners are in tech. They're [65:58] executives in tech. They're early in [66:00] their careers. They're founders of tech [66:02] companies. Advice to people who are [66:05] early in the CEO journey. Advice to [66:07] people who want to become CEOs. [66:10] Um, [66:12] go make it your business to talk to a [66:14] lot of people. [66:16] Ask Ask experienced leaders for time to [66:21] talk. You know, most people that are [66:24] Brian, you're you're younger than I am, [66:25] but um, [66:28] you know, most most people that are [66:29] later in their career, they're they're [66:31] really glad to [66:32] >> they are help. [66:33] >> I am. And you know, there's a lot of [66:36] things that I I wish I knew when I was, [66:38] you know, whatever, 38, but I know when [66:41] I'm 58. Um, so I I think getting advice [66:44] don't [66:48] >> like really trust trust your people. [66:51] Trust the people who work for you to get [66:53] to to shape you, to train you. I I know [66:56] probably the most of the mistakes I made [66:58] early in my leadership was thinking that [67:01] I was supposed to have the answers or [67:03] that I'm supposed to be like this um [67:06] invulnerable person who's you know and [67:09] you can be confident but still very open [67:12] and very approachable you know so so you [67:16] you don't be like showing up like well I [67:18] don't know whether our company should [67:19] exist and I don't know whether we really [67:21] have a good mission I'm not talking [67:22] about that but to to show up and say, [67:25] "Hey, this this company's really [67:27] important. Our mission is great. Our [67:29] technology is great, but boy, I could [67:32] really use your advice. Um, I don't [67:33] think I'm that good of a leader, and I'd [67:36] really appreciate any input you have on [67:37] how I can be more effective at helping [67:39] the company." [67:40] >> I think that's incredible advice. It's [67:42] disarmingly. It's disarming. It's [67:44] incredibly useful advice, I think. [67:46] >> Yeah. [67:47] >> I app Bill, I appreciate you. I [67:49] appreciate what you're doing at Bayer. [67:52] It's fascinating. and you're setting a [67:54] template. I hope you're wildly [67:57] successful and the company is a trillion [68:00] dollar company someday and you're on the [68:02] Mount Rushmore of CEOs. I appreciate you [68:05] very much. Thanks for coming on the show [68:06] and giving us all your wisdom. [68:07] >> Yeah, thanks Brian. Really enjoyed it [68:09] and look forward to seeing you in in [68:11] Boston one of these days. [68:12] >> That'd be great. Okay, I hope you guys [68:15] like that. I'll give you my take. Bill's [68:17] trying to kind of pull the bureaucracy [68:20] out of a 100,000 person organization. I [68:23] think where I kind of come out is I want [68:26] to figure out how I help a company going [68:28] from 10 employees to a thousand [68:30] employees so that bureaucracy never [68:32] shows up. It doesn't slow down. That [68:34] pace continues. And when I thought about [68:37] it and kind of went through it in my [68:39] head, there was a bunch of things that [68:42] came up that kind of slow companies [68:44] down. Annual planning and budgeting can [68:47] slow things down. We did this at HubSpot [68:50] around 50 employees. We got pretty [68:51] serious about how we did it. It helped a [68:54] lot and I recommend it. But I recommend [68:57] doing shorter cycles. I think if I had a [68:59] doover, particularly now with everything [69:00] going on with AI, I do my planning and I [69:03] do my budgeting in six months [69:06] increments. Layers can slow things down [69:09] and that's definitely true. The more [69:10] layers you have, the more kind of [69:12] bureaucracy and it slows down. In [69:14] particular, I found the director layer, [69:16] that kind of real middle layer in the [69:17] org. When that showed up, things slowed [69:19] down a little bit for HubSpot. A lot of [69:21] those directors were fantastic and [69:23] became VPs and seale folks, but they can [69:26] slow it down. So, I would push off that [69:28] director layer as long as I can. And I [69:30] would keep the span of reports, span of [69:32] coaching as Bill would say, to at least [69:35] 1 to 10. I wouldn't have like one person [69:37] with three direct reports. I don't think [69:38] that's a good idea. Third thing is in [69:40] and I hear this from a lot of CEOs is [69:42] you know mercenaries can slow things [69:44] down and as a founder I was always kind [69:46] of managing that missionary to mercenary [69:48] ratio. You're going to end up having to [69:50] build the company with a lot of [69:51] mercenaries. So you can't totally ignore [69:54] them. I think I would just try to push [69:55] it out as long as I can. We hired some [69:58] amazing mercenaries at HubSpot that [69:59] helped us scale and so don't completely [70:01] throw that baby out in the bathwater or [70:04] charts and titles. Those can gum up the [70:06] works a little bit. I tried to get rid [70:08] of both at HubSpot around 50 employees. [70:10] I banned the org chart and I banned [70:12] titles and I stuck with it for about six [70:16] to nine months, but I went back and we [70:18] we built an org chart and we gave [70:20] everyone titles again. There's so much [70:22] time spent on work charts and titles and [70:24] it's exhausting. But the upside of them [70:27] in terms of the organization versus the [70:30] downside, I think the upside outweighs [70:32] the downside. So, I wouldn't kill those [70:34] if I were you. Uh 101 ones. One-on ones [70:37] definitely slow things down and jam the [70:39] CEO's calendar. I personally like how [70:41] Jensen Hang runs things. He doesn't have [70:43] one-on- ons. He has like 50 direct [70:45] reports and he gives feedback, tough [70:48] feedback and good feedback in public. I [70:50] sort of like the way he runs the [70:52] business. And honestly, in HubSpot in [70:54] the early days, I didn't have one-on [70:56] ones. I had these large meetings and I [70:58] kind of regret going with the more [71:00] traditional one-on- ones, the small [71:01] meetings and stuff like that. Uh, I [71:03] think Jess's got it right. compensation [71:06] and compensation bands can slow things [71:08] down. Yes, but eventually you're going [71:10] to need them. I think they're healthy. I [71:12] think where companies get in trouble is [71:15] where the the compensation system and [71:17] the org structure are kind of perfectly [71:19] matched. Uh I think you need to decouple [71:22] the position in the org chart with the [71:24] comp. In an extreme example of this is [71:27] Zuckerberg hiring, you know, developers, [71:30] scientists making hund00 million, which [71:33] is probably a lot more than his VPs. You [71:36] know, I don't know about that, but [71:37] definitely inside of your organization, [71:39] you've got individual contributors who [71:40] are adding as much if not more value [71:42] than some of your VPs. So, I would [71:44] decouple those things that if I had had [71:46] to do over. There's a lot of talk in [71:49] Silicon Valley amongst my CEO friends [71:51] about professional managers, when to [71:54] bring them in, are they good? Aren't [71:56] they good? You're going to need [71:57] professional managers eventually. My [71:59] advice would be to push it off until, [72:01] call it post 100 employees. Try to build [72:04] with your crew. Try to build that early [72:05] crew and the homegrown talent. But [72:07] eventually, you need them. Like for [72:09] example, you're going to need a VP of [72:11] sales probably at 100 employees. You're [72:13] going to need a general counsel with [72:15] experience being a lawyer at 500 [72:17] employees. You're going to need a CFO at [72:19] some point. Like HubSpot couldn't have [72:20] gone public without a CFO that had seen [72:22] the movie before. So, I would push them [72:24] out. I'd also try to avoid hiring those [72:27] professional managers from ginormous [72:29] companies. There's just kind of an [72:31] impedance mismatch there. Anyway, I hope [72:33] you enjoyed it. Uh, I had fun doing it. [72:35] If you want to keep the conversation [72:37] going, ping me on X. I'm bhagan. Take [72:40] care.