Unsung heroes? Cannabis’ middle managers
Many cannabis employees and investors pay too much attention to the performance of cannabis CEOs to the exclusion of other factors. This shouldn’t be a surprise. Our business culture embraces the ‘great man’ and ‘big idea’ theories i.e. that corporate success hinges on the actions of a single person or some breakthrough strategy.
Like much of conventional wisdom, this belief doesn’t hold up to scrutiny. A recently published multi-sector, global study from the Harvard Business School finally gives Middle Managers (MM) their due. The study’s key conclusions are simple yet powerful.
In many industries operational execution is now a key competitive differentiator and the primary driver of corporate performance. Predictably, operational execution is the primary responsibility of middle management. Their effectiveness depends on their skill level, motivation and the leadership support they receive in terms of resources, empowerment, and training. Fundamentally, MMs should no longer be undervalued, viewed through a ‘tactics’ lens or just seen as expensive headcount.
These findings are particularly relevant for the cannabis sector. Today, there is no disruptive product or IP that can leapfrog one company over another. Even if you have the right strategy and cost base, it can all be for naught without a cadre of good managers and teams who can execute on a repeatable basis. Operational excellence can be a winning formula in today’s challenging market.
Despite the lack of Jeff Bezos or Steve Jobs types of leaders to forge management best practices, large LPs and MSOs can still compete at a high level by having a layer of skilled MMs spread across key departments. These MMs are regularly making tactical decisions like setting prices, executing sales & marketing plans, choosing inputs, and hiring staff. that impact sales and gross profits.
Finally, many large LPs and MSOs have expensive cost structures full of well-paid MM. How these individuals and teams perform may well be the difference between financial success and failure over the next 12 months.
Turning your middle management into industry-leading capability takes effort and time. It requires sustained investments in people, technology and processes. MM’s also need to be empowered to make the right decision and not abruptly penalized when things go awry. Training, mentorship and coaching must be ongoing activities. Finally, MM compensation must be concomitant with performance to ensure retention.
When effectively implemented, MM investments and competencies can be a strategic differentiator, enabling firms to outperform their peers in terms of productivity, employee engagement, risk mitigation and profit levels.
#management #leadership #middlemanagement #strategy #differentiation