3 steps to driving cannabis innovation

Innovate or eventually whither away

For cannabis firms in competitive markets, it has become apparent that product innovation is a ‘must have’ for a simple yet powerful reason.  A corporate strategy based on producing the best product or selling at the lowest cost is not realistic and sustainable for most companies.  For these businesses, your strategy needs to be focused on achieving meaningful product differentiation.  There is no way to achieve this unless you are regularly innovating.   Of course, it helps to have the right employee incentives, knowledge management systems and budgets to support the art of innovation.  Here are 3 other steps to build your innovation engine:

1. Deeply understand consumer need states
A need state is a consumer problem that needs to be solved by your product or service.  A need could be functionally (e.g., I want a certain terpene or format) or emotionally driven (e.g., I want to treat myself to something special or impress my friends).  Layering onto a needs analysis is a deep exploration of consumer requirements (e.g., their budget or buying habits) as well as their social-cultural milieu (e.g., an anthropological lens). Product and service innovation opportunities exists when there are unmet functional/emotional needs or where a number of product attributes, technologies or capabilities can be combined to uniquely solve problems or create a new category.  

2. Create a learning culture
In the absence of owning meaningful IP, genetics and channel access (all rare in cannabis), the best way to consistently innovate is to foster team problem solving and creativity. Achieving this alchemy will be highly dependent on the extent of continuous learning in your culture.  This includes key ingredients such as capturing and leveraging insights from inside & outside of the cannabis sector.  Learning will also be driven by regular staff upskilling as well as enabling the cross pollination of knowledge between internal groups and across your partner ecosystem.

3. Nurture long term optimism
Being an optimist in cannabis can be a challenge, particularly if you are a veteran of a rapidly maturing or dysfunctional market.  However, pessimism is corporate poison;  it pushes down employee engagement (hindering productivity) and increases turnover (leading to higher costs and talent shortages). To foster innovation, leaders must inject confidence and hope into a firm’s DNA.  This can be achieved by celebrating small team and market successes, dispensing with blame culture (especially around failed initiatives and contrarian thinking) and keeping your eye on the innovation prize despite short term hiccups and overtly negative employees.  To be clear, this is not about hosting contrived ‘rah rah’ sessions.  Too much optimism minimizes critical thinking and strategic objectivity, both needed traits to running a winning cannabis business.

#cannabis #innovation #consumers #culture