“Its not me, its you” On the failure of cannabis leadership

A favourite social media pastime is to bemoan the weak executive talent in the cannabis industry. But like everything important in life, things are not so simple.

Is the issue that many (or most) cannabis executives are plain stupid? Or can there be other, deeper causes for their lack of performance? I pondered this question by looking back on the hundreds of cannabis managers I have dealt with as well as considering leadership best practices in others sector. 

While talent levels do explain some underperformance there are other reason why most cannabis executives have not been up to par, especially when said managers were successful in other industries:  

1. Boards didn’t do their jobs - Initially, almost every Board was stuffed with capital markets people and friends & family of investors, but not operators. These Boards were ill equipped to run a cannabis firm not to mention hire the right people. Talent attraction was further hamstrung by the firm's broken cap tables. The high concentration of unqualified founders and insider ownership limited the ability to attract and pay for quality talent up/down the organization as well as secure badly needed funding. Good leaders tend to hire good leaders - except in cannabis.  
 
2. Role descriptions were sub-optimal - Cannabis was a new industry without a playbook. Proper organization design (e.g., role definition, reporting lines and defined management practices) was rarely undertaken or formalized.  And, the problem went deeper. There was often a poor link between performance measurement systems, the right metrics and compensation. When managers operate in a vacuum without clear boundaries, expectations and the right incentives, poor management inevitably follows.

3. Competing management styles - When the corporate world meets freewheeling, formerly illegal weed operators, there will be culture clashes, a lack of understanding and poor practices. Moreover, many incoming leaders had the simple but flawed assumption that cannabis was just like the Bev Alcohol or CPG industries. Merely staffing companies with people from these industries would be a panacea. It wasn't.  

Considering everything together it was clear that most executives were predestined to fail. 

Addressing systemic management underperformance is not an easy or quick task. I suggest:

1. Start at the top by improving Board governance and expertise (e.g., bring in independent Board members and addressing cap table problems);
 
2. Perform an organizational and management diagnostic to understand where the structural pain points and talent gaps are;

3. Optimize role definition, reporting, and span of control based on best practices;

4. Align your performance measurement and recruiting strategy to the desired traits and experiences that correlate with high industry performance.

#leadership #management #performancemeasurement #boards