Why Does the Cannabis Industry Get It So Wrong – and How Can We Get It Right
“Give me a smart idiot over a stupid genius any day.” Samuel Goldwyn
Many critics will blame our industry ills on dumb or corrupt (or both) leaders, at the exclusion of other factors like regulations. (We'll leave the critic’s bias, competence, and hypocrisy aside for today.)
Yes, competency and intent are critical as is Board oversight. Managers must be held accountable. Yet, its not that simple. If we are able to decipher what’s behind the under performance – after all, not every executive could be stupid or crooked – we should be able to raise the sector’s managerial IQ.
The prevalence of the Dunning Kruger effect can explain much of the weak performance, especially early on. According to Wikipedia, “The Dunning–Kruger effect is a cognitive bias in which people with limited competence in a particular domain overestimate their abilities.”
If you are a cannabis leader or any accomplished person chances are you have fallen victim to DKE.
DKE is common among individuals, and across every pursuit and sector. It is also particularly common in cannabis executives irrespective of market.
Perhaps cannabis firms started behind the eight-ball? In other words, they were destined for DKE-induced trouble. Here’s why-
> The sector attracted many investors and operators who were previously successful in other endeavours. It was natural for them to exhibit hubris and have blind spots;
> The cannabis industry is still relatively young and lacks a clear playbook. This makes weed companies vulnerable to ego-driven, smooth talking, executives from related sectors like CPG, tobacco and alcohol.
> Many managers conflate extensive recreational consumption with deep cannabis product and industry expertise.
> Our sector attracts more than its share of renegades and iconoclasts, many of whom have agendas that care little for shareholder returns.
Leadership ineffectiveness is not a foregone conclusion. Many battle-hardened managers ate their humble pie and learned from their missteps - and now make better decisions in more competitive firms.
Businesses can do a lot to mitigate the negative impact of DKE:
1. Recognize its presence and counter by employing more data-driven and collaborative decision making practices;
2. Insist on regular Board oversight of C-Suite performance and key strategic decisions;
3. Prioritize weed industry experience in recruiting efforts;
4. Cross train your staff and shift them between departments;
5. Foster DKE-busting traits like humility, listening and open mindedness.
#management #bias #performance #DunningKrugerEffect #leadership