Mastering the Art of Managing Organizational Change in the Cannabis Industry

Are you ready to transform your cannabis venture? To take it to the next level, you'll need to master the art of change management - a systematic approach to dealing with the transition or transformation of your company's goals, processes, or technologies. In this thrilling conversation, we dissect the top 10 triggers for change management, from technological advancements to market dynamics, and present the eight-step process created by Dr. John P. Kotter for managing change effectively. Properly implemented, this process can lead to significant improvements in your business.

But remember, change isn't just about new processes or tech. The human element is crucial for successful change management. It's about ensuring everyone involved understands the mission and feels equipped and empowered to contribute to it. We close the episode by sharing our own expertise and insights on how to leverage change for your business's success. Let us guide you on your journey to making change your competitive advantage in the cannabis industry. Get ready to turn change into a game changer. Let's ride the wave of change together, only at Cann Strategy.

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Transcript

Speaker 1: 0:55

Hey there, innovators and change makers, welcome to Can Strategy elevating your cannabis business venture the go-to podcast for cannabis entrepreneurs looking to level up their business game. Today we're diving into the topic of change management, which could be the game changer your business is looking for, because it is critical for all businesses, but is especially pertinent for cannabis companies. Change management refers to a systematic approach to dealing with the transition or transformation of a company's goals, processes or technologies. The objective is to effectively implement new methods and systems in an ongoing business. Change management is one of the most underappreciated business strategies. Michael Porter, a leading authority on company strategy and competition, said strategy is about making choices, trade-offs. It's about deliberately choosing to be different. The same can be said about change management. It's about choosing to embrace change instead of resisting it, deciding to lead your team proactively through the transition and choosing to stand out in the cannabis industry as a company that's agile and responsive to change. Let's delve deeper into the application of change management tactics. Whether you're scaling up, adopting new tech, altering policies and procedures or pivoting in your cannabis venture, understanding when and how to apply change management principles can be the difference between seamless transition and organizational chaos. It's essential that we, as business leaders, understand what events trigger the need for a structured change management approach. Let's unpack that, shall we? Here are the top 10 events that trigger the need for change management.

Speaker 1: 2:31

Trigger number one is technological advancements. The rapid evolution of technology often necessitates changes in the way organizations operate. Adopting new systems or software or upgrading existing ones requires a structured approach to ensure a smooth transition. Trigger number two is mergers and acquisitions, when two or more companies come together or when one company acquires another, integrating different cultures, systems and processes often demand structured change management. According to Harvard Business Review, most studies conclude that between 70 and 90 percent of mergers and acquisitions fail. Most explanations for this depressing number emphasize problems with integrating the two parties involved, indicating egregious failures in change management implementation. Trigger number three is organizational restructuring. This could be due to scaling up, downsizing or simply changing the way teams and departments are organized. Such restructuring can have significant impacts on roles and responsibilities. Trigger number four is shifts in strategy. If an organization decides to pivot its business model or strategy, it will likely need to realign its processes, goals and perhaps even its workforce.

Speaker 1: 3:42

Trigger number five is regulatory changes, especially relevant to industries like cannabis. Changes in regulations or compliance standards can necessitate adjustments in business operations. Trigger number six is cultural transformation. If an organization seeks to change its internal culture, perhaps to be more innovative or customer-centric, a structured change approach will be necessary to guide behaviors and mindsets. Trigger number seven is market dynamics. Rapid changes in the market, such as new competitors, changing customer preferences or global events, can force businesses to adapt quickly. Trigger number eight is process improvements. Implementing new methodologies or practices like Six Sigma or Agile, requires training, adaptation and often a shift in mindset. Trigger number nine is crisis situations. Unexpected crises, like the COVID-19 pandemic, can compel organizations to rapidly alter their way of operating. Finally, trigger number 10 is stakeholder expectations. Sometimes stakeholders whether they're shareholders, customers or employees, demand changes that require a methodical approach to manage.

Speaker 1: 4:51

In the cannabis sector, where regulations can shift overnight, where technological advancements are pushing the boundaries every day, and where market dynamics can be as unpredictable as New England weather, having a change management strategy isn't just good business practice. It's essential for survival. And yet many organizations in this space falter, not because they aren't aware of the need for change, but because they underestimate the nuances involved in executing it. Change is not just about switching from point A to point B. It's a journey, and like all journeys, the path to successful change is filled with challenges that need to be foreseen, understood and managed. This is where many cannabis companies face their Achilles heel. But here's the silver lining While challenges abound, so do solutions such as the methodologies of Dr John P Cotter, a beacon in the realm of leadership and change management With decades of insight into the intricacies of organizational shifts, cotter has laid down a meticulous eight-step process that has transformed how the most successful businesses approach change.

Speaker 1: 5:58

Step one is to create a sense of urgency, help others see the need for the change and the importance of acting immediately. Step two is to build a guiding coalition, assemble a group with enough power to lead the change effort and encourage them to work as a team. Step three is to form a strategic vision and initiatives, create a vision to guide the change effort and develop strategies for achieving that vision. Step four is to enlist a volunteer army, get a significant portion of people involved, engaged and committed to the change. Step five is to enable action by removing barriers, remove obstacles, change systems or structures that undermine the vision. Step six is to generate short-term wins plan for and create short-term wins or improvements to motivate and persuade skeptics within the organization. Step seven is to sustain acceleration. Use increased credibility from early wins to change systems, structures and policies that don't fit the vision. Finally, step eight is to institute change. Reinforce the value of successful new behaviors to ensure that the change becomes part of the core of the organization.

Speaker 1: 7:05

While Dr John Cotter's eight-step process has proven its efficacy time and again across various industries, it's crucial to understand that its success doesn't solely rest on its structured approach. Execution is key. Implementing these steps requires deliberate intention, attention to detail and, above all, consistency. It's one thing to comprehend and appreciate the wisdom in each of these steps, but it's another entirely to apply them diligently and consistently across an organization. As with any robust framework, the power of Cotter's methodology truly shines when there's a deep commitment to seeing each step through, ensuring that every stage is given the time, resources and focus it deserves.

Speaker 1: 7:45

When properly implemented, john Cotter's eight-step approach to change management can lead to some serious improvements in your business. Imagine higher employee engagement, effortless transitions during shifts, nimble responses to industry trends and crafting a fortress of resilience around your business. Sounds pretty good, right? Let's ground this conversation in some hard facts. The data truly speaks for itself, and I've got some juicy stats about the outcomes of good change management that I think you'll find fascinating. Croshe, which is a research-based change management methodology and solutions provider that offers tools, training and consulting to help organizations manage the human side of change, reports that businesses acing their change management game are a whopping six times more likely to crush their objectives than their counterparts that are still fumbling with change. If that wasn't enough, willis Towers Watson chimes in stating businesses leading in change management and communication are three and a half times more likely to leave their competitors in the dust. Now hold on to your hats for this one.

Speaker 1: 8:47

Gartner, a global research and advisory firm, points out that spot on change management can slash employee resistance in half. That's a smoother ride with fewer bumps, fewer drop-offs in productivity and less of that dreaded turnover and the dollars. Ibm has a say here. Teams that have the change management formula dialed in hit their budget goals 80% of the time. Compare that to the mere 40% for the others still trying to figure things out. And to top it off with top-tier change management practices, prashe says you could reach project proficiency a whole 28% faster, optimizing that return on investment and keeping your investor smiling. These stats indicate that good change management practices can dramatically enhance the success of projects, employee engagement and satisfaction, operational efficiency and the financial performance of a company.

Speaker 1: 9:40

Despite the compelling evidence supporting the benefits of change management, we still see a significant number of businesses, including those in the cannabis industry, struggling with it. You see, change is hard. It's even harder when we're talking about shifting the dynamics within a group of people, each with their own habits, values and understanding of how things work. How can we, as an industry, do better, and what are some things that cannabis business leaders can do to improve their chances of success once they start implementing change management initiative? When sustainable change is implemented, it is done by the people, for the people. Therefore, it's crucial to involve employees in the change process right from the start. If you can inspire each individual to get on board with change, then you're winning the game. Prashe developed the ADKAR model, standing for awareness, desire, knowledge, ability and reinforcement. The model emphasizes the human side of change management and can be used in conjunction with Cotter's eight-step system. By breaking down the change process into these five key stages, organizations can address and support individual transitions more effectively, which in turn, cumulatively result in successful organizational change.

Speaker 1: 10:51

Step one is awareness, meaning recognizing the need for change. Before any change can take place, individuals must first understand why it's needed. This understanding might arise from recognizing inefficiencies in current processes, external market pressures or the potential benefits of a proposed change. For businesses, this involves clear communication about upcoming changes, explaining the reasons behind the decision and highlighting its potential benefits. Step two is desire, meaning the internal commitment or decision to engage and participate in the change. Simply being aware of the need for change doesn't guarantee acceptance. Desire ensures that there is intrinsic motivation to adapt to and embrace the change. Organizations can foster this desire within their workforce by involving employees in the change process, highlighting individual benefits and addressing concerns or reservations they may have.

Speaker 1: 11:47

Step three is knowledge, defined as understanding how to change. It's the information, skills and training required to move forward. Without knowledge, even the most motivated individual may struggle. Equipping people with the right skills and understanding allows them to confidently navigate the change process. This can involve providing training sessions, workshops or knowledge sharing platforms to ensure everyone knows what's expected and how to achieve it.

Speaker 1: 12:16

Step four is ability, referring to the tangible capability to implement the change on a day-to-day basis. It involves translating intention and knowledge into action. Knowledge without application is ineffectual. The ability phase ensures that individuals can practically integrate the change into their daily routines and responsibilities. This stage often involves hands-on training, mentorship, practice and real-time feedback enabling employees to effectively use their new skills or tools. Finally, step five is reinforcement, with the goal of ensuring that the change sticks and becomes a part of the regular routine of each affected team member in the system. It involves feedback, recognition and any other actions that consolidate the change. Changes can easily revert to old habits without reinforcement. This stage ensures the longevity and permanence of the change by embedding it into the organization's culture and daily operations. Measures such as feedback mechanisms, continuous training, updates and recognizing and rewarding adherence to the new change can be effective tools during the space.

Speaker 1: 13:22

Alright, while understanding models like Cotter's Eight Steps and Prashi's ADKAR methodology gives us the blueprint to effectively navigate the intricacies of change, it's just as crucial to measure our footsteps, to truly assess the trail we've blazed, because what good is any strategy or approach if we don't take a moment to reflect on its tangible impact as we shift gears to our final segment. Today, we're diving deep into the heart of assessment, which is to measure the results of change. It's not just about understanding if our change management approach hit the mark, but also evaluating the change itself. Was it truly necessary? Did it bring about the forecasted outcomes? Was the voyage worth the effort? So tighten your seatbelts as we explore the tangible metrics and indicators that reveal the story behind every change journey.

Speaker 1: 14:14

Here are our top 10 favorite methods. Measurement 1, engagement here we ask how many stakeholders actively participated in the change process and how much feedback was received of during the process. The second measurement is training and adoption. Consider how many of your team members attended training sessions. Did they pick up new skills, and how many are now using the new tools or methods that were introduced. Measurement number 3 is communication. Did our messages reach everyone? Which methods, like emails or meetings, worked best in sharing information about the change?

Speaker 1: 14:49

The fourth measurement is performance. After the change, did you see improvements in operations? How about key areas like sales or customer satisfaction? Fifth is resilience to change. How much resistance did we face and how quickly did we resolve these issues?

Speaker 1: 15:06

Measurement 6 is benefit realization. What was the financial return after implementing the change? Did the actual benefits match our predictions? The seventh measurement is culture and behavior. Did your team's morale stay high during the change? How well did the change fit with our company's values?

Speaker 1: 15:24

Next measurement number 8, is feedback and improvement. What lessons did we learn and are we using this feedback to make further improvements? Following that, measurement number 9 is risk and issues how many risks that were anticipated actually happened and how efficiently tackled were the problems that cropped up? And finally, measurement number 10, long-term impact Is the change sticking and showing long-term benefits, or are some areas slipping back to how they were before? While the journey of change is crucial, it's the reflections at the end, embodied by measurements and evaluations, that determine its true success and value. Just as a sailor adjusts sales based on the wind's feedback, businesses must adjust their change management strategies based on the feedback from their evaluations Over time. This not only improves the organization's approach to change, but also strengthens its resilience, adaptability and overall competitiveness. In the cannabis industry, concluding this extensive exploration into change management, particularly in the dynamic world of the cannabis industry, it's clear that, while change is inevitable, our approach to it is what determines our success.

Speaker 1: 16:33

Change management is more than just a corporate buzzword. It's a nuanced dance between innovation and adaptation. It's a roadmap for navigating the unknown and unpredictable waters of the business landscape. Michael Porter aptly encapsulated the essence of strategic choices and, in the realm of change management. Our strategic choice should be to embrace, lead and become masters of change, rather than being mere spectators. For cannabis entrepreneurs, this isn't just about staying relevant. It's about thriving in a world where the only constant is change itself. The methodologies of Dr John Cotter and the AD CAR model from Prashe provide strategic frameworks to address the human and operational sides of change. By adopting these models, cannabis businesses can position themselves not just to survive, but to lead the charge in an evolving industry.

Speaker 1: 17:22

To all the innovators and change makers tuning in, remember that implementing change isn't just about adopting a new process or introducing a new technology. It's about people. It's about ensuring that everyone aboard the ship not only understands the destination, but is also equipped and empowered to sail towards it. As we draw the curtains on today's episode, I urge you to think of change management as your compass and your team as the crew in your venture's journey. With the right tools, strategies and mindset, the horizon is not just a limit but a beginning.

Speaker 1: 17:55

If today's discussion has resonated with you, if you're eager to leverage change as a stepping stone rather than a stumbling block, then we're here to support you. At CAN Strategy, we guide cannabis companies like yours through the complexities of organizational change. Our expertise, combined with industry-specific insights, can be your beacon as you navigate the tumultuous waters of business transformation. So if you're ready to take your cannabis venture to the next level, if you're ready to embrace change, innovate and set your business on a trajectory towards formidable success, let's chat, connect with us at CAN Strategy and let's make change your competitive advantage. Stay tuned, stay informed and, most importantly, stay open to change. Until next time, keep elevating your cannabis business game.