Building Bench Strength – Management Changes in the Enforcement Division
Although building bench strength is universally recognized as a necessity in the private sector, unfortunately, due to the way budgets are set up and funding is appropriated to state Departments, it is very hard to develop bench strength in government agencies. In the Enforcement Division, we had to be creative. And it’s a balance, right? You want to be careful with taxpayer dollars, but at the same time you want to ensure the Departments and the Divisions are taken care of.
One way to build bench strength is to cross train your staff and make strategic moves among your leadership team. This allows individuals to take on other equal-level positions within the Department, learn new skills and/or programs, all while having the original individual around for mentorship and advice. Sort of like a built-in safety net.
This was a technique I learned from my General Counsel at Qwest. Every year, he would allow a certain number of lawyers to move from one section of the Law Department to another. This allowed us to learn other areas of the law – for example, I was able to work in the Regulatory Compliance Section, the State Regulatory Section, and in the section that negotiated the large technology contracts.
In the Enforcement Division, it became clear that this method of building bench strength could work. Initially, Ron Kammerzell was the Gaming Division Director, Bruce Zulauf was the Automotive Dealers Division Director, Don Burmania was the Horse Racing Division Director, Laura Harris was the Liquor Division Director, and Dan Hartman was the Medical Marijuana Division Director. When using this method, it is important to make strategic moves and to keep some individuals in the same position so that there is adequate continuity.
In reviewing these five Divisions, I determined it was important to keep the existing Directors in the Gaming and Automotive Divisions, for a number of reasons. In looking at the other three Divisions, it became clear that there was a greater need to build bench strength because it appeared that those Divisions would be experiencing more volatility and change in the coming years. That view proved to be very prophetic.
In the end, Dan Hartman became the Director of the Horse Racing Division, Don Burmania became the Director of the Liquor Division, and Laura Harris became the Director of the Medical Marijuana Division. These Division Directors took on a different Division for the good of the Department. I will always appreciate their willingness to take on these new roles.
Process Improvements – Identifying and Addressing Issues
During the latter half of 2011, the impacts of the funding anomaly began to emerge and the MMED and I worked to identify potential solutions to the issue. We conducted our own internal assessment as to the cause and the effect. By the beginning of 2012, we had no choice but to begin cutting back costs at MMED – those were some extremely painful meetings.
We placed the METRC® contract on hold, we closed down several offices, and we decreased staff down to 15 individuals from 55. This was the hardest part. But I wanted to protect those employees’ jobs, if at all possible. Luckily, we were able to move them to other open positions in the Department. Everyone pulled together and we saved a lot of jobs.
By this time, Laura Harris had taken the helm as Director of the MMED. Her attention to the budgetary shortfall was extremely appreciated.
We also requested legislation to de-couple the State and Local licensing structure, so that upon State licensure of the operating businesses, the MMED could assess the annual licensing fee. That bill had bipartisan support in both the House and the Senate, and was fast-tracked to ensure its passage.
Unfortunately, just before the last vote, one of the bill sponsors chose not to move forward with the bill. This was a heartbreaking result for the MMED. Although we were able to get that legislation passed in 2013 with HB13-1238, for a period of time in late 2012 and early 2013, I had 15 people doing the work of 55.
The State Audit of the Medical Marijuana Program
During 2012, the State Auditor began conducting an audit of the Medical Marijuana program in MMED. As noted, the MMED had already conducted its own internal assessment and we had already started addressing the issues we identified – the major ones were cost containment and fee generation.
When the audit was concluded, and the final findings were made public, it was gratifying to note that we were already moving in the direction recommended by the audit. It meant we were on the right path. But to implement many of the resolutions still required funding.
So, during the 2013 Legislative session, in addition to requesting the de-coupling of the State and Local License, we also requested that general sales tax from the sale of medical marijuana also be placed in the MMED’s cash fund. We were extremely grateful to the Legislature for both bills – they created a sustainable funding model on an ongoing basis.
This was key, because as I always say, “You can build the best regulatory system in the world on paper, but if you can’t fund it, it really doesn’t matter.”
Lessons Learned
- Make sure you have a sustainable and sufficient funding model – I know I said this before, but I can’t stress it enough – many of the issues we faced in 2011 and 2012 were a direct result of the model that was used.
- It is important to evaluate:
- Bench Strength
- Process Improvements
- Customer Service
- Employee Morale
- When developing a new program, get your internal audit team involved, they can help ensure that the program has proper internal controls and can save you headaches later on.
- When asking your legislators to act on legislation that you need, make sure they understand how critical the subject is to the program – by educating them, providing answers to questions quickly, and involving people in the Department at the highest level.
- When your organization is being questioned by the Legislative Committees (or a Board of Directors), make sure individuals at the highest level are front and center – I believe that was crucial to maintaining the confidence of the Legislature that my Department would implement Amendment 64 through responsible regulation.
Preview of Upcoming Discussions
Also during 2011, the Cannabis Therapy Institute in Boulder, Colorado launched a campaign to move forward on an amendment to the Colorado Constitution that would legalize the adult use of marijuana. This became the basis for Amendment 64. In the next post, I will discuss the campaign, the polls, and how we began to get ready for the implementation of the first-in-the-world regulatory program for adult-use marijuana.