Cannabis Should Take Strategy Out of Strategic Planning
This notion seems counter intuitive but makes sense when unpacked.
War is a good analogy for business.
Wars are rarely decided by great battles or generals but through attrition of soldiers and materiel, which in turn is determined by things like force size, logistics, equipment maintenance, and procurement. Despite this reality, the myth of the strategy or innovation ‘silver bullet’ remains powerful and seductive, perpetuated by myths, historians and popular culture.
What often gets short shrift is the winner’s hard work turning the ‘silver bullet’ into fruition – and then sustaining it.
Business is no different.
On balance, cannabis companies have a very difficult time finding sustainable strategic advantage, for 3 fundamental reasons:
1. The tendency to follow the herd and succumb to biases.
Most cannabis strategies are the same – and all are constrained by regulation. Who doesn’t say they want to grow the best weed, at the cheapest price with the highest brand equity?
2. Its your capabilities, stupid!
A winning strategy (and value proposition) necessitates having world class capabilities. This is an alchemy of people, IP, and assets, that drive competitiveness. The inability to build or maintain vital capabilities is a recipe for strategic failure.
3. Cannabis firms lack staying power.
Without sufficient capital, patience and grit any strategy is dead on arrival.
Many cannabis firms expend a significant amount of time and money on strategy deliberations, planning sessions, and brainstorming looking for these elusive silver bullets.
Sadly, their practices are part of the problem. In many strategic planning activities, upwards of 90% of the time is focused on option analysis and crunching numbers, with the residual time spent on how the firm is actually going to get stuff done, fill gaps, and mitigate risks.
As in fighting a war, execution is what really matters when it comes to short term margin growth, employee engagement and profitably serving customers. Great execution is about aligned staff doing their work with accuracy, speed, and consistency while being flexible and continuously improving. This encompasses project delivery and the everyday performance of groups including processing, logistics, compliance, IT and accounting. If the back office engine is not humming, most strategies will fail.
There are many proven ways to improve execution. Leaders could start by inverting their 2024 strategy development processes, concentrating more on how you are going to do something as opposed to what are you going to do.
#execution #strategicplanning #operations #performanceimprovement #strategydevelopment