ON THESE YOU SHOULDN’T COMPROMISE – BUT LEAVE ROOM TO BE FLEXIBLE ABOUT OTHER THINGS
Behaviors of a Good Partner, Whether It’s a Company, Organization, or Person
This blog post isn’t only for the Cannabis industry. I think it applies universally. And I’m not here to rehash Phylos, but it’s impossible to address this week’s topic without starting by acknowledging the “Phylos Effect” on the Cannabis industry. The company’s admitted mistakes (and perhaps others that haven’t been admitted yet) started a dialogue within the Cannabis community centering on some core issues and topics. We have hopefully learned some lessons for which we can be grateful.
I would boil the experience down to lessons learned about three principles that are inter-related and of vital importance. They are (1) Transparency (2) Accountability and (3) Trustworthiness. Since I am NOT rehashing Phylos, I will discuss these three principles in a forward-looking way. People who want to look backward certainly can, and their activism undoubtedly energizes these lessons for us all. My approach is no criticism of them. I’m just leaving them to that approach while I take this one.
I’ll frame this discussion in terms of companies because they seem, as a group, to have the hardest time with these things. Part of that might be inherent in corporate formation and function—it seems that the truly special companies take active measures to overcome the pressures, presumptions, and dynamics that disfavor Transparency and Accountability and Trustworthiness. But this discussion applies equally to organizations and to individual people. So as you read this, mentally substitute “person” or “organization” where I write “company.” Ideally all of the parties and entities we deal with would embrace these values and behaviors. That’s what we should demand.
Transparency – literally this means that you can see through something—that there is nothing to hide and nowhere to hide it. Organizations and people who act with Transparency say what they mean and mean what they say. They don’t have a hidden agenda and they don’t have to lie or intentionally mislead about their goals or their business plans. What you see is what you get.
Accountability – this means that you take responsibility for your actions, your values, and your decisions and even (especially) for your mistakes. Organizations and people who act with Accountability may not be mistake-free, but they will not try to dodge the consequences of their actions. If there are some mistakes made or unintended consequences, they address them head-on and make all reasonable efforts to clean up their own messes. And they welcome the opportunity to do so.
Trustworthiness – the meaning of this is clear: a person or a company is deserving of your trust. And it’s hard to imagine a situation in which a person or a company would display real Transparency and behave with Accountability and NOT be worthy of Trust. Does that mean you will always agree with the company’s choices or actions? Probably not. But you can at least trust the company to be real about what it is doing and why.
There is Room for Diversity of Priorities and Values
Let’s distinguish the behaviors of Transparency, Accountability, and Trustworthiness from some of the other things we might wish to find in a company – its values. It’s not realistic to expect every company, organization, and person to have all of the same values that any one of us might have. Diversity of goals, values, priorities, etc., can be good. People who tolerate no deviations from their own values are typically dogmatic, inflexible, unreasonable, and no fun!
There is room to trust a company and still not always agree with it. There needs to be room for that, in any kind of workable industry. That can be hard for some in the Cannabis industry because it’s not just an industry. In many ways it’s also a community, especially among the people who have been in it since before the regulated commercial industry emerged.
Things Have Changed
My sense from conversations I’ve had and observations I’ve made is that in the “old days” there may have been an even greater need for some shared values and priorities, as a matter of survival. Maybe it was easier to draw lines and know who was on which side.
(I wasn’t there so I’m only going on what people have told me. And I don’t in any way mean to be speaking for them or claiming the experience and credibility they uniquely have on this topic. I’m only doing my best to synthesize my own experiences and observations and to do something useful with it.)
But things have shifted. Business pressures can change people from being apparently Trustworthy to behaving differently and being less reliable. I’ve heard numerous stories about that from clients who misplaced their trust in people they had known. They didn’t think legal protections like contracts and patents would be necessary and only learned differently when it was too late.
And, strangely, some groups we may have automatically distrusted have now become essential partners if we want a place in a legal industry. As an extreme example, even if you’re a survivor of intense persecution by the government, you can’t avoid working with the government to get the necessary licenses, pay taxes, and protect your legal rights. It is an interaction that isn’t perfect and is almost never fun, but it’s a necessary one, nonetheless.
Value Fallacies? We All Have Them—Some We Hold Dearly
Here are some examples of things that seem to be mistakenly valued in at least some circles. Some people embrace these values and equate them with measures of Trustworthiness. But I would argue that these are “value fallacies.” They will distract us from a more useful focus on Transparency, Accountability, and Trustworthiness by getting us riled up about the wrong things. You may disagree, even vehemently. But give these some open-minded thought:
Being anti-corporate – Admit it. Many of us have used the term “corporate” as synonymous with “heartless,” “sterile,” “evil,” and so on. But in the US, it’s virtually impossible to achieve very much commercially without incorporating in some way. Refusal to do so will eventually lead to major negative tax consequences and potentially paralyzing liability risks. And incorporating isn’t a dodge of necessary taxes and all liability. It’s a way to work within the system that is there, to permit a business to function over the long haul. People who refuse to incorporate on some kind of moral grounds are playing a competitive game with one hand voluntarily tied behind their back. It’s simply not realistic or sustainable in most cases. We can and should distinguish between the good and the bad not based on whether they have incorporated, but based on their behaviors of Transparency, Accountability, and Trustworthiness.
Being anti-success – I have heard numerous conversations and seen countless posts that seem to reflect a near knee-jerk reaction to distrusting any company that is experiencing success or even making an all-out effort to succeed. I believe this comes from experience with companies that chose success over the behaviors of Transparency, Accountability, and Trustworthiness. It may also arise partly from some frustrations about who appears to be succeeding and who doesn’t. It often seems that the playing field isn’t remotely level as to some in the community. That is something we should separately address so that all can have an equal shot at success. But I would argue that there is room for truly Trustworthy companies to succeed and, when they do, that should be celebrated rather than criticized or resented.
Being anti-profit – We have been conditioned to treat the concepts of “profit” and “greed” as though they were the same thing. This implies that it’s possible to sustain a business without profit or that it’s impossible to make a sustainable profit unless a business is greedy. But a business that simply isn’t profitable probably won’t be around long to provide jobs, products, or services. It won’t be sustainable. I don’t actually think we mean to criticize the profitability. We instead may be reflecting our experience and assumptions that the profit was achieved through some untrustworthy behaviors. Let’s re-examine that and demand Transparency, Accountability, and Trustworthiness without always distrusting profitable enterprises.
Being anti-growth – Some companies get big by means of all sorts of abuses, but some companies get big just by being very good at what they do. It is a value fallacy to dismiss all big companies as being untrustworthy just because of their size. It may be very appropriate to be skeptical and to demand an even higher level of Transparency and Accountability of larger companies, because it is easy for even the good ones to become distracted or impersonal. But if all large companies are seen as the enemy, we ourselves are distracted from being prepared fully to take on and stand up to the genuinely bad companies.
Being anti-patent – Of course I was going to get to this—I’m a patent attorney. Many believe that patents are inherently wrong. But most of these same people use locks of some sort to protect their own property. They pay for things produced by the labor of others instead of expecting that the labor should have just been donated to the public good. They pay for creative content such as movies and books and music and usually understand that the artist who originated those things deserves to be paid for their work and talent. But then for some reason they still believe there is something inherently bad about all patents, when in many cases patenting is the only way for a plant breeder or an innovator to get paid for her life’s work. Being completely anti-patent means there are certain professions (plant breeder, innovator) that should just dedicate their work to the public domain. That doesn’t mean that all patents are good or properly granted or appropriate. Some patents represent invalid over-reaches and are to “good patents” like greed is to profit. You can hate the abuses without hating the underlying system that sometimes is abused. If you still don’t see how someone can embrace IP protection, such as patents, and still be an ethical and positive member of an industry and a community, please read this.
Demands and Goals
So is there a take-home message? Is there a call to action? Hell yes!
DEMAND TRANSPARENCY – When you are dealing with a business (or an organization or a person), don’t start from a position of trust or distrust. Start from a position of demanding Transparency. Ask questions. Investigate. See what the answers are like. Are they evasive? Do they make sense? Are they consistent? This is all about Transparency. If a business lacks Transparency, that is when it’s time to start distrusting the business. Don’t make it about whether the business is making a profit or trying to. Don’t even necessarily make it about how big the business is. Make it about Transparency first.
Be realistic, though, about the fact that many companies have to keep some secrets in order to function. But there is a difference between keeping company secrets and being deceptive or misleading or outright untruthful. People need and deserve a certain amount of privacy. Even companies may need that. But privacy can’t be a shield for dishonesty.
My goal for all companies is that they would embrace Transparency and welcome investigations and hard questions about how Transparent they really are. They would be who they say they are and do what they say they are going to do. We should not accept less from the companies we work with.
DEMAND ACCOUNTABILITY – Observe and learn what you can about the company’s Accountability. Has the company been clear about its rules and values for itself and is it willing to be Accountable to those rules and values? Does it show real Accountability when a mistake has been made? Does it show a genuine commitment to fix its mistakes and clean up its messes?
Don’t presuppose that all good companies would have the same values or priorities or rules for themselves. Allow for each company to define its purpose and mission and values. But demand to know what they are and how the company will be Accountable for its actions.
My goal for all companies is that they would establish a Company Constitution to articulate the company’s values and priorities, for all to see. This would show both Transparency and Accountability. But a further goal is that Company Constitution would also set rules by which the company commits to abide. Such a company would invite its customers and partners to hold it Accountable in its behavior according to its stated values and rules. A truly Accountable company would create a Constitution strong enough that it could not be swept away with a change in ownership or control. Investors would invest knowing what they are getting and would, in so doing, embrace that Accountability. They would literally “buy in” to the company’s Accountability as part of their investment.
RECOGNIZE AND REWARD TRUSTWORTHINESS – If you demand Transparency and Accountability you will have a Trustworthy company as your partner. If it sounds simple, it’s because it IS simple.
Don’t trust a company that does not consistently show Transparency and Accountability.
My goal for all companies and their customers and partners is that it would become commercially untenable for companies to be unwilling to consistently abide by the principles of Transparency, Accountability, and Trustworthiness.
My goal for all of us is that we would not only demand these things of the companies and organizations and people around us, but that we would do our best, day in and day out, to abide by the same principles. That we would also demand Transparency, Accountability, and Trustworthiness of ourselves in our dealings with others.
We as an industry and as a community will never get what we don’t consistently demand. If there is a single most important lesson to be learned from recent events in this industry, this is it. And it’s a lesson for any industry—maybe any relationship.