Use Your Senses to Optimize Operations

Step away from the spreadsheets to feel your business breathe

The role of chief operating officer has long been hard to define. A widely read Harvard Business Review piece from 2006 characterized the COO role as “misunderstood,” even though companies in every industry have an increased need for an executive operations leader. In cannabis, where the vast majority of companies are less than 10 years old, it can be even harder to define how executives should best oversee operations.

As someone who has both hired and been a COO, including in my current position at Acreage Holdings, I can attest that the temptation in a growth-oriented business such as cannabis is to bury your head in metrics, focusing on finding numbers your investors want to hear. Of course, every organization needs concrete goals and ways to measure them. But one of the biggest mistakes I see operations leaders making is relying too much on what spreadsheets and algorithms tell them and not enough on their own senses. Spreadsheets may help you hit a near-term benchmark, but the most effective COOs let their senses combine with their technical prowess to bring lasting improvement to their organization. Get out and experience the operations, employees and customers. Feel it, listen to it, learn it.

 

Use your ears

One key to success: Don’t search for what you want to hear, but focus on what’s being said.

Early in my career when I was working up through the ranks at General Electric, a very strong and wise senior vice president came into my office and barked at me, “Daino, I have good and bad news — which do you want?”

I said, “Give me the bad news first.”

After delivering the unpleasant news, he promptly turned and left my office. Startled and unsatisfied because I had not received the “good news” yet, I ran after him and said, “Wait, what was the good news?”

He turned to me and said, “Daino, you need to listen. I said I have good news and bad news, which did you want. I did not say which did you want first.”

He then left, never to this day to share the coveted good news. I soon realized the lesson he was teaching me: You have to listen intently, not only to what someone is saying and how they say it, but for what they don’t say as well. As a result, you will hear what others cannot, which will enable you to do what others won’t.

In finding the pulse of your business, you need to be listening to your cultivators, extraction experts, compliance officers, delivery drivers, store managers and retail salespeople — all the people who touch and create value for your organization. Not everyone will tell you exactly what you need to hear in the way you want to hear it. For instance, front-line employees are a lot less likely to tell upper management outright that they think a product’s packaging is terrible, and salespeople aren’t going to volunteer that they may miss their targets this quarter. But be supportive and open to the negative and the self-reporting of not-so-good news, and you’ll find you’ll also hear a lot more of the positive. For example, when 3M engineers found they concocted a glue that wasn’t very sticky, on the surface they failed in their aim to develop a new traditional glue. Yet the company’s openness to dialogue created the environment where an employee recognized a not-very-sticky glue would be the perfect solution to constantly losing page markers in his Sunday hymnal. That led to Post-it Notes.

 

Use your eyes

Looking at the spaces and processes that make up the workflow of your cannabis business will give you an unfiltered view into the underlying health of your operations, which the numbers may not reflect for weeks. Are workspaces clean? Are employees taking pride in their work? Is the physical movement of people and product during the day inefficient in some way? These sights can quickly tell you if operations are safe, sustainable and cost-efficient.

Just because cannabis sales in the U.S. are growing at nearly 40% per year doesn’t mean your business can afford to be mediocre in its execution.

 

Use your voice

I have often found success by asking colleagues to envision the optimal solution to a type of challenge we’re facing without regard to any constraints. I call it the “no rules approach.” For that moment, set aside the constraints of money, manpower and time, resources, public relations, etc. and talk through what the utopian answer would be. Once you have the optimal solution enunciated, then and only then, should you apply the real-life constraints and craft a realistic near-term solution while also developing long-term goals to make the business excel.

Insight from any employee — from the front lines of the organizational pyramid on up to tip of the spear — can be the nugget that trims costs from a process or provides a crucial competitive edge. Amazon’s Prime program evolved out of the suggestion of a software engineer to upper management. Look at any long-lasting company and there are hundreds of insights like that from employees that helped make that business last. Innovation isn’t reserved for just a few at the company; it is absolutely the responsibility of each and every person in the organization. It takes all of us to define and redefine our workplace, products and industry continuously. After all, one of the only constants in this world is change — something that we all must embrace or be left behind.

 

Leverage the Opportunity

As an industry, we’re creating and revising the blueprints for successful cannabis operations every day. After all, we are driving the evolution of an entire industry. We can be informed by what other businesses have done before us, but we’re the ones cutting the path to true excellence in cannabis. We will leverage the unbelievable opportunity and freedom to innovate without baggage, use history as a data point and utilize the passion of the incredible talent within this industry to ensure that we continue to positively make a difference in the lives of millions each and every day.

Doing this will ensure greatness.

 

Robert Daino oversees all operations for Acreage Holdings, including product innovation, supply chain, sales, retail operations, marketing, project management and technology. He joined the company in 2018, bringing with him a proven track record of success in driving an entrepreneurial spirit into newly created and established organizations. Prior to joining Acreage, he was an investor, advisor and eventually the CEO of cannabis operator Terradiol. He also had a 13-year career at General Electric and was the president and CEO of WCNY Public Media.

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