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Scaling Your Cannabis Company Through the Art of Delegating

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  • Regular check-ins with yourself and staff are necessary to determine if a single person holds too many areas of accountability. Delegate more responsibilities to create environments where employees can function and execute at a high level.
  • Coaching is both an opportunity to teach and learn, providing critical growth and enrichment opportunities for your team.
  • Meeting regularly with employees and providing clear, constructive feedback in a space where they feel comfortable admitting mistakes will boost morale and develop your talent.

How many of us are used to working 12- or 16-hour days?

In my experience working for cannabis companies over the last five years, it’s been more common than not for me to start my day at 7AM, work until 6:30PM, and revisit my emails for a few hours after dinner. It’s a regular practice for me to set aside weekend hours to clear out my inbox or work on reporting so I won’t be disturbed by incoming calls and questions.

Cannabis companies are at an exciting intersection with many startup companies in an emerging (or startup) industry. We see many small teams be successful precisely because they put in the hours, with individual employees spreading themselves across multiple facets of the business in what is lovingly described in interviews as “wearing many hats.”

The progress we have made as an industry is remarkable. More than a thousand retail locations have opened, hundreds of producers are licensed, and let’s not forget the flurry of M&A activity, even just in the last year. The growth has been fantastic to watch. But it’s not sustainable for the human capital that makes all of this growth possible. I’m talking equally about the CEO and the social media manager; the pace we keep to make our companies successful is not sustainable in the long-term.

Turnover and burnout are a problem for the cannabis industry, and it’s because there is so much more room to grow that we have to preserve their knowledge and keep these individuals within the industry. But the standard we set for “hustle” will be exactly the thing that drives them away. – Mike Unterman, Apical

In a recent conversation with a CEO of a Licensed Producer, I learned that pre-COVID, he was spending twenty hours a day at the office. Their 9-to-5 was spent taking meetings, answering questions and providing oversight. The remainder of his time was spent doing the work he had already delegated to staff, either improving or starting a project that someone else might start the next morning. Why not start this project at 11:30PM?

There is no time like the present, right?

Wrong.

There are two main problems with this approach. Firstly, work and output are of higher quality when there are rest periods (Shahid, 2017) in between productivity cycles. This applies to the CEO specifically in this case, but also to the employees themselves. When you lead by setting a standard for the work culture, your team will feel obliged to follow. Even though the whole team becomes less productive because of this pace, people band together in the name of “hustle porn,” holding this behavior up as the pinnacle of work.

Secondly, the employees in the organization lose job satisfaction when the work is done for them. A manager will typically delegate responsibility and hold accountability for the work. The level of responsibility drives job satisfaction. When that responsibility gets taken away or micromanaged, the level of motivation the employee has is reduced, the quality of work suffers. And, as a whole, the organization is left worse off.

The practice of transferring responsibility to subordinates is called Delegation of Authority in management and governance circles. The Delegation of Authority is typically formalized into a company policy that explicitly delegates responsibilities to various levels within the organization (including subordinates), providing them with the authority to make smaller decisions to get work done. These accountability mechanisms can also be tied to metrics that allows the organization to better measure performance. Managers in the cannabis industry tend to hold too much authority, much of the responsibility, and do not have enough bandwidth to execute on everything themselves. The reality becomes that our people are not empowered to contribute in the ways that would be best for our business.

The CEO I mentioned expressed gratitude for the work from home life that began when the COVID-19 pandemic hit. When his team started working from home, he wasn’t able to do the same amount of work as before, because he couldn’t see it happening in front of him. As a result, the balance of responsibilities shifted to his team, and they thrived. This CEO is busier than ever, but not because he’s taken on more responsibility. On the contrary, this hands-off approach helped the business grow and created more oversight work over which he had authority. Now they are in the midst of an expansion, are about to launch new products to the OCS, and, you guessed it, his employees are happier than ever now that they can manage their own productivity cycles and are given more responsibilities and authority.

No manager should ever give up authority or accountability completely; it’s a critical function that management provides. However, by delegating responsibilities and creating mechanisms for accountability, managers can help employees grow and become happier and manage their own time more effectively.

Expert Opinion, Ashley Chiu

Ashley Chiu

Ashley is a strategy and transactions management consultant at EY-Parthenon within EY Canada, who is passionate about cannabinoids disrupting consumer health. She has developed governance programs to support numerous cannabis companies through their NASDAQ listings, assessed market entry strategies for adjacent industry companies, and led due diligence for transactions totalling over $6B in the sector.

Organizational Design

Organizational design is the foundational underpinning in how responsibilities and authority are delegated, and accountability is tracked. Flatter organizations typically have lower administrative costs and benefit from faster communication and decision-making. Taller organizations with more layers can provide stable structure and process but face a tradeoff for speed and agility.

Most companies in the cannabis space start with very flat organizations and a handful of key employees. It’s a lean methodology that relies on high-performing talent to constantly pivot and address the day’s needs. As the company scales, there is a need to add more people. Typically, high-growth organizations face challenges adapting to the changing environment and remain flat. What starts as two to three employees can quickly become 12 people, all with different functions, reporting to a single individual.

Managers of a flat organization must be wary of spans of control that are too large (i.e., too many areas of accountability or people reporting to you directly). Although it may be easier to manage a large team of individuals who all perform similar functions (think sales team leader coordinating boots on the ground), when managing different processes (for example, QA, Operations, Sales), one manager can only effectively deal with 3–4 key functions at once. When this threshold is exceeded, it’s time to expand your organizational structure (either horizontally or vertically) and delegate more responsibility to your team. It should go without saying but, additional layers are most effective when organized by function, and a clear, direct reporting structure is established.

Many of the cannabis leaders I’ve spoken to on this topic are hard-pressed to remove themselves in this manner, believing that they need more hands-on management for the business to effectively run. However, the paradox of this approach is that managers will be required to retain and execute this knowledge regularly since their employees will have jumped ship a long time ago.

The Essential Project Matrix

At the beginning of each project, key process activity, or relationship (i.e. with a customer or external stakeholder), it’s common, even informally, to define who is: Responsible, Accountable, Consulted, and Informed. When someone says, “You take the first crack at it, and I’ll review,” that’s an informal RACI, in which someone is responsible and someone else is accountable. It’s easy to map this out: All the tasks are listed on the Y axis, with all the internal stakeholders on the X axis. Every key activity needs an “R” someone to be responsible for it. Every key activity also needs an “A”, someone who is accountable for it.

Consider this example, a truncated version of the process of ordering and using packaging in cannabis production:

Each activity has one person who is responsible and another who is accountable, and these are not the same person or department. This is the system of checks and balances that enables the company to function objectively over the long-term. The type of task, i.e., more structured or clerical, versus one that requires more judgment and strategy, will also determine who should be responsible, and accountable.

Problems arise when the R and the A get blurred. If a manager who is accountable ends up doing much of the work, then they are no longer just accountable, they are also partially responsible. The employee originally assigned responsibility now no longer has that responsibility. This can decrease their motivation and desire to do more work and inhibits their learning and growth.

As the manager, if you are accountable, you may operate more effectively if you are not also responsible. Instead of saying, “It’s easier if I just make a few quick fixes myself,” try explaining your thought process and going through the desired changes together. This has two benefits: firstly, your employee feels empowered to take on the responsibility next time. They are given better tools to do the job and will likely be eager to try again with better success. Secondly, you save your future self some time.

The most challenging aspect of coaching an employee is often finding the time. However, a lack of coaching only compounds the problem and will worsen when an employee leaves due to a lack of motivation or prospects for development. Formalizing feedback and adding structure to guidance with procedural documents and policies clarifies ambiguity, empowers employees and allows managers to remove themselves from execution to focus on strategy. Win (for the business) — Win (for the employee) — Win (for the manager).

Accountability and Goal Setting

Evaluating the success of a project, process, or relationship is often the most unclear and complicated aspect of completing a task. Often, managers ask their teams to be accountable for their success without defining what success might look like, or more damaging, overestimating what we they are capable of. A lack of accountability can lead to unclear task ownership, subpar work, and low morale.

Accountability can be evergreen, such as key tasks/activities that support customer success or quality assurance. Accountability may also be linked to short term (or long-term) projects with a definitive ending. A RACI as described above is a good starting point for accountability, as it clearly defines each stakeholder’s role or level of involvement in completing key tasks/activities. Accountability must also account for what we consider a measure of success, in which goal setting plays a critical role.

Your goals should be SMART. A goal should be specific (S) to the responsibility. In the packaging example above, a specific goal for the QA team would be to obtain documentation around vendor qualification, child resistant certificates, and food grade certifications. A goal should also be measurable (M); In this case, do vendors meet all the qualifications? The goal should be attainable (A): Is the QA department able to certify vendors in this case? The goal must also be relevant (R) and timely (T), relating to a businesses’ current needs.

With clear goals established, open communication becomes the key to accountability: It’s up to a manager to outline targets, provide guidance, and maintain regular forum for discussion as the project progresses. It’s up to an employee to provide context on why (or why not) a target is feasible, where the process needs to be clearer, and where potential roadblocks exist.

Having a regular cadence for feedback helps hold people accountable, both manager and employee. A sense of psychological safety creates an environment in which people are comfortable admitting to mistakes; in a word, accountability. Once the risk is taken, whether the outcome is positive or negative, feedback that is kind, constructive, helpful, and isn’t personal (i.e. “You did this…” Read more about radical candour here), will help prevent these mistakes from recurring. This allows the employee to learn and affords the manager the chance to step back and delegate more responsibility. Altogether, this creates a positive feedback cycle that builds morale, confidence and provides enrichment.

Improving the Lives of Employees

Delegating authority and the practice of assigning responsibility and monitoring accountability can improve and maintain employee morale and ultimately help you retain high-performing talent within your organization. Most importantly is recognizing when you as a manager are overleveraged and additional levels of hierarchy or formality are needed in the company.

Providing employees with clear responsibilities and a process will help clarify how exactly an employee can be successful. Where no process exists, or needs to be refined, managers must provide coaching and feedback so that the responsibility remains with the employee, and the manager only provides context and support. If goals are unmet, the manner in which feedback is given is essential to success; providing a safe space for people to admit mistakes and not personalizing feedback creates an environment in which employees can thrive, learn, and grow.

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Mika Unterman

A global citizen, Mika has lived, worked, and been educated in Israel, the United States, and Canada helping to shape her perspective and knowledge of the cannabis industry. Before joining launching Apical, she excelled as a community manager and cannabis educator, normalizing the widespread use of cannabis recreationally and medicinally. She was recently responsible for product innovation and business intelligence as Director of Business Development at Agripharm. A passionate advocate of values in business, she founded Apical in 2019 to provide easily accessible ESG programs for cannabis businesses.

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