Fixing Cannabis Innovation: Three Ways to Do More and Spend Less
📊 One of the few ways to grow your top & bottom line is through innovation.
Sadly, the track record at most cannabis firms is not good. Pursuing innovation in cannabis is especially challenging due to capital constraints, under resourcing, and the dynamic nature of markets, regulations & consumers.
These conditions are not ideal but also not that unique. Nurturing and leveraging innovation is always easier said than done:
➡️ Innovation is expensive and time consuming. Many firms don’t have the capital, patience, or time horizon to see it through;
➡️ Turning good ideas and new products into commercial success is very difficult owing to consumer & channel inertia etc.
➡️ High risk innovation initiatives butt up against other urgent priorities that commandeer focus, capital and resources;
I break down innovation into two buckets:
💪 Tactical innovation
TI is about new tools, methodologies or technologies that generate more output for a given input. Think hitting singles & doubles. Business outcome are things like higher capacity utilization, improved product quality or lower cost.
Some cannabis firms like Nextleaf Solutions (CSE:OILS) (OTCQB:OILFF) do a great job with TI (a link to a case study is in the comments).
💡 Strategic innovation
SI are your revenue and market share home runs, transformational products and business models that enable you to outflank competition or define new market space.
Canadian weed examples include infused pre rolls from Decibel Cannabis Company and Shred from Organigram Global
Whether the goal is meaningful TI or SI (or both), how do you improve your chances of getting there?
Like many things in cannabis, it often comes down to executing on the basics:
1️⃣ Handle innovation ‘strategically’
> Bring transparency to all innovation efforts
> Set innovation objectives (an aspiration) and goals (tangible outcomes)
> Ensure your investment and time is aligned with your corporate strategies and growth objectives
2️⃣ Optimize existing programs
> Eliminate underperforming initiatives that don’t meet ROI/IRR targets
> Undertake post mortems on your innovation successes and failures
> Fill easily addressable resource gaps
3️⃣ Encourage smart risk taking
> Don’t publicly penalize failure
> Tweak performance measurement schemes to reflect the uncertain nature of innovation performance
> Embrace a ‘fail fast’ approach using small pilot programs plus bringing customers & suppliers into the innovation process.
💡 Pursuing innovation doesn’t have to be riskier and more expensive than it should be. You should heed these best practices.
Call me. I help teams solve difficult strategic, cost & organizational problems and capitalize on growth opportunities
#innovation #strategy #disruption #Decibel #Nextleafsolutions #organigram