It is a compelling argument when political candidates promise they will bring business discipline to politics. Rightly or wrongly, people have this belief that government, no matter who is in power, is irresponsible with tax dollars and bringing the principles of business into the policy making process will lend some much need responsibility to those in power.
Now that a “business candidate” is leading the Ontario government, can we expect his business discipline to lead to better, less political decision-making around the design of a cannabis retail distribution system? And when people talk about business discipline, what exactly do they mean and how does it apply to selling cannabis in Ontario?
One of the most basic concepts in business discipline is the relationship between objectives, strategies and tactics. This will probably be pretty basic for many of you in the business community but it seems to be a huge challenge for a) politicians and b) business folks who were elected because they promised to bring business discipline to government. While the latter may have been successful in business, they seem to lose their way when creating public policy.
Objectives are the starting point for a disciplined planning process. They articulate what you are trying to accomplish, your goals. The next step is to define your approach to achieving these objectives. Your approach is your strategy. You can have a strategy for each goal or, even better, one strategy that addresses all of the objectives of a single project. Finally, you develop the tactics – the specific, tangible steps you will take to achieve the goals.
It should be pretty obvious that objectives, strategy and tactics should be aligned. The more tightly aligned they are, they more disciplined the plan. By alignment, we mean the strategy is designed to achieve the objectives and the tactics are designed to enable the strategy. When everything is aligned, the tactics – the actually actions you will take – will cause the objectives to come to life. Pretty simple and logical, right?
Case in point: The Wynn government, and now the Ford government, had/have two laudable objectives when setting up a retail distribution system for the sale of recreational cannabis:
• Eliminate the black market
• Keep it out of the hands of children
In order to achieve the above objectives, the Wynn government’s strategy was to set up a government run retail chain, like the LCBO, that would grossly underservice the province because of a lack of capital and expertise to blanket Ontario with stores. For instance, there would only be 150 stores in Ontario by 2021, whereas we currently require almost 700 LCBO stores to serve the entire province. The lack of retail distribution would have created scarcity of product, which would, in turn, perpetuate the massive and massively profitable black market. Where do kids get their cannabis? The black market! So it should be clear that these politicians don’t understand the relationship between objectives and strategy because they are actually diametrically opposed to each other, the exact opposite of being aligned. Because of politics, the Wynn government strategy was actually designed to make the objectives fail!
We applauded Doug Ford, the man who was going to bring business discipline to government, when he privatized the retail sales of cannabis. The private market has more than enough money and expertise to build out a retail distribution system that would blanket the province in no time. This would put a serious dent in the black market, reducing the likelihood that cannabis would get into the hands of children. Three cheers for Ford’s business discipline! It averted a public health disaster.
And then he forgot that discipline and succumbed to what seems to drive all politicians: politics. The Ford government is only going to grant 25 store licenses in April 2019…to service the entire province! That isn’t nearly enough stores to service Toronto! By contrast, Alberta already has over 60 retail stores and it has 10 million fewer people living there. Like with the Wynn plan, having only 25 stores across Ontario will perpetuate the scarcity that drives the black market that sells to kids.
The excuse the Ford government gives for its limited plan is “supply shortages”, which is an illusion created by the cannabis industry because it is shipping so much of its crop to foreign markets at a higher price than they can sell it for in Canada. The Ford government knows this and therefore knows that its “supply shortages” excuse is bogus.
Our hope is that, for the sake of reducing the black market and keeping cannabis out of the hands of children, Ford will return to his “business discipline” ways, and let the private sector fund and manage the buildout of a cannabis retail network in Ontario quickly.