Why cannabis companies have problems innovating
Its not just about having money and ideas
Becoming better at innovation - a basket of organizational competencies, dollars and traits - is mission-critical at many cannabis firms. And for good reason.
Consumers want unique strains & products, competition is relentless, and retailers/wholesalers no longer want to carry me-too products. From an operational perspective, managers need to steadily reduce their costs, be more operationally flexible and serve their customers better.
Fact is, you can’t create an innovation if you are not good at generating innovation.
The latter activity is where most cannabis enterprises fall short, leading to new product failures, wasted capital & time, and employee burn out and exit.
Why is innovation generation so hard?
Some research published in the Harvard Business Review could shed some light. The research focused on barriers to innovation. A survey of 270 innovation leaders across multiple sectors led to some surprising conclusions.
Three research highlights stood out:
1. The level of key inputs such as capital, talent, ideas and tools was not as big a barrier as is assumed.
2. Politics and turf wars are mostly to blame for failed innovation programs. Their presence drags down information sharing, collaboration and strategic & financial alignment.
3. An 'Inability to act on signals crucial to the future of the business' is a significant gap. This translates to managers ignoring market trends, regulatory disruptions and the impact of new technologies (overall and in their respective markets).
I have not seen similar research in the cannabis sector, but the above results are consistent with my six years of cannabis experience.
For the cannabis sector, I would add to HBR’s list of barriers: immature organizational structures, low employee engagement/high turnover and the lack of management follow-through.
My innovation process fixes are straightforward - but not always easy to implement. Here are five steps you should take to make your innovation approach more effective and efficient:
1. Get everyone aligned on the same page, from innovation strategy and vision to metrics and practices.
2. Glean process lessons from other innovation leaders, both within cannabis and in related industries.
3. Drive innovation initiatives through cross-functional teams made up of inside & outside-focused employees.
4. Report regularly on the team’s progress as well as the potential value and timing of the innovations.
5. Base your innovation strategies off your best capabilities.
#innovation #process #management #products #culture #operations