Small hemp players can capitalize on ‘multi-stakeholder’ model

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By Susan Barnhardt | SHEMP Yarn Co.

With the hemp industry primarily made up of small and medium enterprises, multi-stakeholder collaboration is essential for survival. By forming such alliances, like-minded, innovative companies can develop the edge that will well position them as the industry becomes more sophisticated and competitive.

The multi-stakeholder model is not a partnership. The term partnership has serious legal implications which link one firm’s obligations to legally binding commitments on the part of the partner, and vice versa; partnerships may also imply capital connections between and among parties. Nor is such an alliance today the same as the traditional vendor-supplier relationship of the past.

Better together

Multi-stakeholder alliances are close collaborative initiatives among companies that share complementary assets, and which operate without strict legal agreements. They are formed to increase value or competitive advantage that would be difficult for each participant to achieve independently.

While such alliances eschew formal partnerships, they rely fundamentally on a detailed memorandum of understanding (MOU), and simple contracts where required for any specific inter-alliance activities and transactions.

Multi-stakeholder alliances can be either long-term and strategic, or single-objective and tactical. Strategic alliances strive to gain competitive advantage and establish a solid platform for the future; they require a significant investment in time, energy and resources, and a rigorous, systematic approach. They can also have consequences when not successful. Tactical alliances do not require as much time (or risk) but still require a detailed approach to goal setting and management. Combining on tactical projects first is a good way to evaluate an ally’s potential long-term strategic value.

Shared values in hemp

Honesty, trust and shared values are at the axis of any successful multi-stakeholder alliance. In the hemp industry specifically, there is a high “social responsibility” quotient. Indeed, seeing eye-to-eye on sustainability and climate issues is a prerequisite to cooperation with many firms – and the shared awareness of these issues is perhaps the best indicator of what the industry can do and be. Emotional connection to such shared goals will help deliver economic ROI, reinforcing a constructive relationship.

Once the vision and trust are established, objectives and goals must be established, and roles assigned to set the process in motion. Setting organizational guidelines and rules of engagement, communications, planning and scheduling are only a few of the managerial challenges the alliance must meet. A successful multi-stakeholder alliance will also:

  • Clearly define strengths and weaknesses of all alliance members.
  • Provide better solutions for daily operational challenges.
  • Provide solutions to the challenges and desires customers face, be they farmers, suppliers (B2B) or end customers (B2C).
  • Result in real value for the end customer and all alliance partners

Resilient & sustainable

Yes, creating an alliance is complex, requiring the commitment and active engagement of management and operational teams. But in this age of hyper-competitiveness, such collaboration can help companies – especially small and medium enterprises – continually advance in everything from financial management to supply chain configuration.

With constantly emerging technologies, products and services revolutionizing the hemp industry, new demands and challenges arise daily. Meeting those challenges at the speed, scale and scope demanded requires collaboration among the right stakeholders. By forming those alliances, not only can we strengthen our individual hemp businesses, but we can help to shape a resilient industry, and a more sustainable world.

Susan Barnhardt is the founder of SHEMP Yarn Company (SYC), a Florida, U.S.-based producer of worsted textile yarn made from hemp and wool which is set for a market debut in mid-2021. Barnhardt, a veteran of the textile industry, has more than 40 years experience working with emerging companies and Fortune 500 brands such as Campbell Soup Company, Kraft Heinz, Johnson & Johnson, Pfizer, and Constellation Brands. She has a long track record in multi-stakeholder collaboration.

Part II: As technology advances, alliances are key in hemp agriculture
Part III: Alliances in processing

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