By Doug Poretz
Why You Should Be Concerned
I fear that this industry is about to get hit by a tsunami of change that will be felt on both an industry-wide and a company level. It’s a pattern that is part and parcel of basically every fast-growing “hot” industry that ever started to grow, even though each industry thinks its experience is unique. After all, we saw the “dot com” industry grow and morph and eventually become a very real industry, despite the fact that in its formative days it even created its own “new economy” that dismissed the importance of revenues, for instance. The individual events may be unique, but the pattern is virtually immutable. Even for the cannabis industry. The fuse is a corporate change such as an acquisition or merger; the bomb itself is the explosion of one or more corporate cultures.
Whether rational or not, the idea – culture — of the industry and the individual companies becomes very real. It influences everything: new product development, customer service, community involvement, working hours and habits, remuneration. The people who are part of the company take pride in their way of doing things, the way they act, the priorities they hold dear. But what happens when that company is bought or merged into another company? As similar to each other as they may be, each enterprise has their own personality and their own ways of doing things. You can bet that the culture of the new company is just as deep as your company’s culture, and there will be plenty of built-in conflicts, whether you are being acquired or you are the surviving company.
Are your employees prepared to address such a reality? Are you? Are your customers? You better be because this industry is just now starting its first wave of growth and strategic transactions that will likely continue for a few more years.
Even if such a basic change never happens with your company, you have to be sensitive to the possibilities because the prospect is so high as the industry continues to grow. Here are two steps you can take right now that will produce real benefits even if you never go through an existential corporate change.
1.) Coalesce your middle management into a separate identifiable group.
I learned this while leading one of the biggest Chapter 11 announcements in American business: the “boss” (CEO or Chairman or whatever their title may be) may be liked, admired, held to be a hero. But the front line employees don’t believe on a knee jerk basis what the senior execs say when they have to announce a really basic change. Instead, they go to the person to whom they report directly – this is usually a person in “middle management.” After the corporate speeches and presentations, the employees corner their boss, sit down with them and say: “OK, Jack. What does this really mean?”
At that time, you want the middle manager to be positioned as a credible spokesperson for what really is happening. The more credibility they have, the better. Unfortunately, if you are making the major announcement on Thursday at 3:00 PM, you can’t start this effort on Wednesday morning. Instead, build this group now, before you need it. Assemble this group in one way or another to educate them about the business fundamentals, such as margins, growth rates, the process of deciding on and building inventory, why you project a certain persona at your company, your priorities, etc. By making them smarter about your business, when they do face the skeptical employee questioning a critical change, they will have knowledge and credibility and will be able to provide a robust honest answer – which is what you want. Then, as employees confront some critical changes, they will have confidence in the idea that Management knows what it’s doing and is on top of things, and thus the tsunami becomes much less destructive. At the same time, you will be building your own “bench” of future managers, getting them smarter about your business, and thereby prepare for even further growth.
2.) Appreciate that your employees constitute your most important distribution channel of information to your customers.
As a company starts mapping its promotional and communications program they make a priority of identifying the channels that get their messages to their targets. Online? Traditional? PR? Sponsorships? Grassroots? Solid questions that should be addressed after everyone agrees that the most powerful distribution channel for your messages is your employees. They are credible. They are also the people your customers and stakeholders interact with most intimately and frequently. So … you know all that worrying you devote to your web page? It’s time and thinking well worth the effort. But how you communicate to your employees and how they know to communicate in turn with your customers is more important than your web page.
Is that blasphemy coming from a guy who spent more than five decades in the communications business? No. It’s just the reality of lessons learned.