It’s no secret that the cannabis industry is evolving at breakneck speed, with markets, customer demographics and even regulations changing rapidly. The rapid growth that many companies can achieve as they tap into the movement of the market can be as disorienting as it is exciting, and suddenly the founders of these companies can find themselves managing a much bigger business than they ever anticipated. So how can they know if it is time to call in additional help in the form of a CEO or other C-level leadership to preserve and capitalize this momentum? And how can they preserve the unique company culture that they built during the leadership transition process? As the initial company founder and CEO transitions out of the role, it can create growing pains for even the most successful companies.
Hiring the right person to work closely with the CEO, clearly defining the new C-level role, onboarding the new executive and understanding how to navigate conflicts or differing opinions through a CEO transition plan can help.
How To Identify When the Founder Should Make Room for New Leadership
The first question for cannabis companies experiencing growing pains is whether or not it’s time for the founder to make room for new operational leaders. Some entrepreneurs will just know in their heart that the day-to-day operations and administrative work of managing a growth-stage company is not where their native genius lies. They just aren’t loving those aspects of their job anymore. It’s time to step back into the role of visionary, guiding the company, forging partnerships and building the brand.
Likewise, if the founder discovers areas that are not his or her field of expertise as the business grows, is getting bogged down in the day to day management of the company, or wants to scale the business and can’t, it could be time to bring in a leader with complementary experience. Many grassroots cannabis company founders discover that, while they have a passion for their products and their company mission, they don’t have the business experience necessary to take the company to the next level.
But the founder’s job on the front lines isn’t quite done once they make the decision to step away from their tactical role. First, they must find the right hire to step in as a CEO or chief operating officer. Then, it’s time to set the new executive up for success.
How to Choose the Right C-Level Executive
In the cannabis industry, especially, it’s crucial to focus on finding sustainable leaders who believe in the company vision and share empathy and compassion for the industry and its customers. Beyond these qualities, we often find the best cannabis leaders are those who’ve shown the ability to pivot between industries several times. Leaders who have made multiple career or industry pivots are adaptable and know how to learn the ins and outs of a different field quickly.
Often, executives with analogous experience to the cannabis industry are well-suited to the task. For instance, people who come from brick-and-mortar retail or quick-service restaurants, which are similar in operation to many cannabis dispensaries, understand the importance of customer service, branding and quality products. They understand how these three elements combine to create a successful operation, regardless of what they are selling.
Finally, the founder should seek someone where they feel a natural, almost instantaneous chemistry borne of shared life experiences, visions and philosophies. At least in the beginning, the founder will work closely with the new executive to solve day-to-day problems and develop strategies to scale the company while executing the CEO transition plan.
How the Interview Process Can Help
Hiring a fellow entrepreneur may seem like the solution to finding a like-minded counterpart to help execute your vision. But entrepreneurs don’t always make the best COOs or even CEOs. Rather than hiring someone that emulates their strengths, executives should find someone who complements them.
Create a Clear Role Vision for Your New Executive
At Y Scouts, in lieu of a job description, we use a role summary and success outcomes to find the right talent for your company. The candidate search begins with multi-stakeholder role visioning, which means we interview the key players in your existing leadership team and ask them questions about the ideal candidate they would envision in the new role, as well as the outcomes they would expect incoming leadership to achieve.
Some questions we may ask the founder during this process are:
- What traits would you admire in this person you just hired?
- What’s the biggest relationship this new executive will need to steward to success?
- What’s the biggest project this person will take on?
- How will your role improve by getting the right person into this position?
Then we create the success outcomes, which stakeholders can measure after a certain time period to gauge if the new hire is achieving the objectives of the role or not.
During the interview process, it’s important to ask questions that will help identify candidates with the traits your existing leadership wants in a partner. Interview questions that delve deep into the candidate’s past experiences working with a team, and looking for responses that show learning, mentorship and constructive conflict, can help reveal the type of rapport the founder and his executive team may expect to have with this individual.
Formulating Your CEO Transition Plan for Success
Finally, with the right executive leader on board, the founder can begin to transition away from an operational or tactical role. The founder should grow accustomed to benefiting from a field of view, where their opinions and ideas aren’t always central to the company’s strategy anymore, but their ideals should continue to drive the company vision and mission. It’s important for the founder to inspire confidence and optimism about the new executive coming on board and convey that to everyone down the chain.
It’s almost inevitable that the founder will get frustrated with the new executive at times, as they grow accustomed to loosening their grip on the reins and permitting new viewpoints to allow for business growth, improved efficiencies, or maybe branding and customer service initiatives that will delight customers. Having a coach or an advisor to facilitate constructive communication can be helpful. The founder should seek to hire someone who is going to professionalize and scale their business in a profitable, healthy and sustainable way, and then give them the freedom to do so.
By approaching the task of finding a new CEO or COO with clear goals and a vision of your ideal candidate, and then onboarding that person in a way that inspires confidence, you can navigate leadership growing pains and take your grassroots company to the next level.
