6 Steps To Steering Your Cannabis Business To Recovery
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In today's rapidly changing economy, there is a lot of discussion about best practices to successfully emerge from the initial impact of the recent COVID-19 crisis.
Here's the good news: As entrepreneurs, we are uniquely prepared to manage effectively at times like these. We know first-hand that running a business in any economic environment is fraught with challenges and founders are constantly under duress. Daily existential crises are the one common threat all entrepreneurs face in all industries all the time. When massive changes shift markets and daily life, as we clearly see in real-time today, entrepreneurs are best served to lean on their strengths. Every day entrepreneurs need to make decisions without the fullness of information and without the time or resources to make a perfect decision. But decisions need to be made, and we know that through crisis and change new opportunities will emerge.
Below are five steps to help you frame your specific situation, adapt how you process inputs, and implement action to successfully navigate a chaotic business environment. Tolerating risk is a characteristic of entrepreneurship but, more than ever, risk must be calculated and every business must evaluate how to re-design their company for success within these new paradigms.
1. Ignore the meaningless clichés
People inherently look for simple answers to complex problems. It's just easier to consume advice that on the surface seems to make sense. For example, you will hear advice such as, “Cut expenses”; “Conserve cash to extend your runway”; “Deliver top customer service”. But these are business behaviors that you should be emphasizing anyway— in good and bad economies. In general, isn’t it a good idea to cut expenses and watch out for erroneous non-essential spending?
The unfortunate reality is that not every business will survive this current recession. There are layoffs at historical levels, and I cannot personally remember a time when every country on earth is dealing with the same threats. The real questions you need to ask are: What is this crisis revealing about my business? Should we be holding onto our legacy business, or will this crisis force changes that we were already resisting or elements that we know are not optimal?
2. Adjust your filters
Business owners are inundated with advice. But how do you process all these inputs to allow for optimal decision making? The following framework will allow you to filter out the inputs that are creating noise and inhibiting your actions. In short, qualify the inputs you’re receiving. Are these inputs based on fact, i.e. what is known, or are they driven by fear, i.e. what is unknown? By shrinking the aperture of your filter, you will remove the fear-based inputs, leaving only those inputs based on fact which will better inform your future decisions.
3. Make changes that create opportunity
A crisis can be a catalyst to not just survive—but to actually thrive. Just thinking about what could go wrong at the exclusion of thinking about what might go right will result in clear needed actions. This will drive focus and require less effort to make decisions and act. Entrepreneurship is driven either by opportunity or by necessity. Today we are experiencing both. No company can continue to operate as business as usual. But change for the sake of change is not healthy. You need inputs, information, and a way to evaluate your organization and the actions you need to take.
4. Follow the 4 Rs
There are four iterative steps that should inform how you act:
- Read the situation. Make an effort to understand the signals you are receiving. Much as you would read the facial expressions of a colleague you’re speaking to, you must also read the expressions of the economic climate. Read, research, and listen to ensure you comprehend current events and how they may impact both your present-day operations and future status.
- Respond to what has changed. Putting your head in the sand and hoping things will get better is not a strategy for success. A crisis is underway, how will you respond?Taking no action is a response in itself but I would advocate to taking action quickly with what information you have readily available.
- Replace what isn’t working. Legacy systems, your prior overhead, and infrastructure all need to be reevaluated. The first step is identifying what isn’t working, but replacing it is the most important. If you don’t need it, do you need to replace it, if you do what are you replacing it with and what is your P&L impact for making the change.
- Repeat. Information is changing on a daily basis and the pace of entrepreneurship is already fast but even more so. This is a process not a destination so consistently applying these steps as a simplified process improvement method can help you novitiate the triage of this crisis.
You should now have two very important frameworks for addressing your situation. You will have adapted your filter to identify what is really important to focus on and drive your decision making.
5. Examine your past, present, and future
How we have operated as businesses in the past as entrepreneurs (and as a society) is no longer a viable template for how to continue to operate going forward. Does that mean you need to completely report your business? No, but you need to be very sanguine about how your business operates today, and what resource systems and behaviors will be applicable in the future.
We can categorize the key elements of your business into the past, present, and future. If we look at resources and systems what did your business design look like before this crisis, what does it look like today, and what do you need to succeed in an uncertain future.
Take, for example, working remotely. If you had a company that had a large team that was used to working in the same space with a lot of direct contact, what will that do to your systems? If meetings are moving to a virtual format, you will need to adapt the resources you are providing to your team to effectively collaborate in this new way. You may need to re-think if having office space makes sense for your business going forward. Look for places to reduce inefficiency and increase focus. If you had 10 products before, do you need all 10 going forward? What were the key responsibilities of the people in your organization? What reductions have you made and conversely what new roles may be needed that you already didn’t have (and can you place someone in a new role as opposed to letting them go)?
6. Provide intentional leadership
As you go forward and implement these systems, the pressure will be intense to help steer your organization through change and transition. Leadership requires intentional execution. The following items are should help you :
- Act quickly The number one mistake that managers make when dealing with a crisis is not acting fast enough in responding. Which in turn also inhibits the induvial and organizations ability to remain proactive
- Don’t look for a perfect decision You will never have all the information or fullness of time to make a perfect decision. Not making a decision and delaying action can be catastrophic in this situation
- Communicate Everyone has had to adapt to working from home and conduct business without direct interactions with each other. This means that non-verbal communication is muted and we need to reply on email, phone calls and video conferences. As people, we rely heavily on non-verbal communication so you must be hyper-vigilant to communicate clearly in the absence of those important signals. • Engage with your people and customers – listen, be honest, and clear. Be accessible to everyone on your team and flatten your organizational structure to facilitate key information getting to you as quickly as possible to inform your decisions.
- Lead with empathy It's your job to make difficult decisions as a leader in your organization. But many people will be feeling a great deal of uncertainty and
- Practice balanced optimism Yes, there are many businesses that are seeing growth at this time, some were predictable and others unforeseen. It is our nature as entrepreneurs (and humans) to worry and think through worst-case scenarios. And while that is a necessary and valid practice, you should balance that pessimism by focusing on factors within your control, those that you are grateful for, those that make you feel more optimistic about the future.
- Find your Crisis Counsel This can be your advisory board, friends, and colleagues. Proactively reach out to engage your core trusted advisors who are willing and able to be a sounding board. Experience matters so don’t try and go it alone when you can get access to mentors and business advisors who may have already been through similar situations and experiences.