Inertia: The Real Enemy of Cannabis Companies

“The heights charm us, but the steps do not; with the mountain in our view we love to walk the plains.” Johann Wolfgang von Goethe

One root cause failure in cannabis can be described by physics.

The notion is inertia, or the tendency of something to do nothing unless it is affected by an external force or the removal of friction. The fancy business term is corporate flabbiness.

Inertia’s negative ramifications are evident for all to see:  delayed product launches or build-outs, persistently-high operating costs, low labour productivity and poor decision-making.  

How do you know your cannabis business has a problem with inertia?

1. Everything from straightforward activities to mission critical initiatives take a lot longer than expected; 

2. Costs remain stubbornly high despite cost cutting, active management or substantial levels of technology;  

3. You underperform in key areas like innovation or customer service;

4. Key metrics don’t lie.  For example, why do you have a significantly lower revenue per employee than comparable peers?  Would your bill of materials benefit from input harmonization?

What causes this inertia?  One or a combination of these sins:

> Operational complexity – Your true practices, policies and decision making processes resemble a bowl of spaghetti;

> Poor employee engagement – Disengaged workers don’t meet target goals let alone go the extra mile;

> Bad choice of suppliers, adversarial relationships – Working with unreliable suppliers will come back to haunt you.  Furthermore, supplier relationships need to be viewed as a two-way street.  For example, chronically late paying invoices will come back to haunt you;

> Strategic and operational confusion – Try moving forward quickly when everyone is doing their own thing;

> Underinvesting – Being too frugal in terms of talent or technology leads to underperformance and reduced execution speed. 

Fixing inertia is tough and requires holistic solutions.  There are no silver bullets.  

First, you need to diagnose what’s behind the problem and then focus your repair there.

As in physics, inducing operational motion is two-fold.  First, apply an external force such as selective outsourcing, higher capital spend or levelling up your supplier roster.  Secondly, remove the internal friction.  This could be achieved through process & organizational redesign, leadership changes or taking tangible steps to boost morale.

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