June 18, 2021 – Cannabis companies face unique challenges as they move through various business stages. Many founders began as growers without extensive business experience and as they move through the business lifecycle into a second-stage start-up, they might realize they need to scale their leadership team, bringing on people who complement their own strengths and weaknesses for a more well-rounded approach.
According to a newly released report by Y Scouts, the new talent mantra for cannabis companies is to move fast and make the right choices.
“If you are considering bolstering your C-suite with a chief financial officer or chief operations officer, it is important to act quickly but also make the right choices,” said Scott Jagodzinski, president of the firm. “You should be planning ahead from day one, considering what a good hire may look like at every stage of your business. Expanding your C-suite is like planting a tree. Like the old saying goes, ‘When is the best time to plant a tree? Twenty years ago. When is the next best time? Today.’”
Mr. Jagodzinski said that if you’re ready to “expand your leadership team, or expect to be ready within the next several months or even a year down the line to do so, it is important to think about finding someone with the leadership style you need based on your business lifecycle, as well as the lifecycle of the cannabis industry as a whole, which will inevitably move from the current period of hyper-growth into being a mainstream field of business.”
Identifying the Business Stages
In broad terms, companies move through the business lifecycle in the following sequence: start-up, growth, maturity, and decline. “If you’re not careful to restart the growth curve as you reach maturity, decline becomes inevitable,” Mr. Jagodzinski said. “Finding the right leadership to prevent decline is key.”
Scott Jagodzinski has started, operated, and exited multiple businesses over his career in a number of industries. He joined Y Scouts in 2020, drawn to the company’s purpose of transforming how people and companies connect. Y Scouts is a retained executive search firm serving high-growth U.S. and Canada-based health & wellness, cannabis, and SaaS companies.
“You could have a superstar on your sports team, but if you don’t eventually pass the ball, you won’t win games,” said Juan Kingsbury, founder and talent strategist of Career Blindspot. Mr. Kingsbury has worked with Y Scouts and its clients to identify mission-critical candidate traits and align companies and people around shared purpose, values and culture.
Finding Dominant Personalities to Lead
Fresh start-ups in the cannabis industry require thick-skinned, aggressive leaders to power through. “That aggressiveness needs to always be there in your leader,” said Mr. Kingsbury. “In general, with a start-up or a new business you’re going to get a Type-A, extroverted personality, who is dominant and influential in how they communicate. Additionally, they are utilitarian-driven and individualistically driven. They want to see the ROI and they want to be able to control it.”
Second-Stage Start-ups Need Detail-Oriented Leaders
As you approach the second stage of business, however, you’ll begin to let go so you can scale. “You’re taking the responsibility off yourself and putting it on other people,” Mr. Kingsbury said. “Now your job is about getting other people to believe and buy into your mission and vision. You’re building more leaders at this stage, as opposed to just driving the people who work for you.”
At this point, the CEO and founder may remain with the company, but they should start looking for someone who complements their skill set and personality type. “You want to find someone a little less aggressive and a lot more detailed,” Mr. Kingsbury said. “You want someone who looks at the details — both tangible and intangible. You have to value that detail-oriented mindset, or your business is just going to tread water.”
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Y scHe shared an anecdote from the movie “The Founder,” which details the story of Ray Kroc, who is credited with turning the McDonald’s restaurant chain into a global juggernaut. In one scene, Harry Sonneborn, McDonald’s first CEO and president, tells Mr. Kroc, “You’re not in the burger business. You’re in the real estate business.” It took that outsider’s perspective, a unique view that can only be gleaned by examining the details, to take the company from start-up to success.”
Find the Person Who Loves to Do the Tasks You Hate
Mr. Kingsbury recommends finding someone who loves to do the work that you dread. “Whoever you choose for your leadership team better like solving the problems you need to solve, but you don’t want to solve. Your blind spot is the other person’s strength,” he said. “From a personality standpoint, that person probably doesn’t look a lot like you, but there has to be mutual respect and the mutual goal of getting your company to the next level.”
Identifying Who You Need in Your C-Suite at Different Points in the Business Lifecycle
To find the people who will complement your existing leadership team, the first step is envisioning the ideal people in those roles. Who will make your life better? What do you need them to do? You may not find the ideal candidate, but with a clear vision of your needs, you will be able to come close.
When you’re hiring for executive leadership, there is a lot at stake. Capability and experience matter, but it’s even more important to find someone who balances out the founder in a variety of ways. “The best hire is going to make the leader’s job — and the leader’s life — better,” Mr. Kingsbury said.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media