#117 Kat Cole: The Power of Possible

Episode Summary

Executive Summary: Host Shane Parrish interviews Kat Cole, former COO of Focus Brands and president of Cinnabon. Cole shares her remarkable journey from a Hooters waitress at 17 to leading major franchise turnarounds. The conversation explores the dark side of gratitude, the importance of believing in people (despite occasional letdowns), leading through mistakes with integrity, navigating franchisee tensions during innovation, and using intentional check-in questions to strengthen relationships. Cole emphasizes pragmatic optimism, humble confidence, and putting the right thing over being right.

Main Topics: The Dark Side of Gratitude (Priority: 5/5): Cole explains how excessive gratitude can prevent people from seeking better circumstances. She shares her mother's story of staying in an alcoholic marriage because she was grateful for material stability, illustrating that gratitude shouldn't stop us from pursuing improvement. Believing in People with Pragmatic Optimism (Priority: 5/5): Cole advocates for defaulting to trust in people's potential, viewing occasional betrayals as a 'single-digit tax' that's worth paying. This mindset has shaped her leadership and the success of her teams. Navigating Leadership Transitions and Mistakes (Priority: 4/5): Cole discusses the challenges of moving from peer to leader, facing her own imperfections, and learning from failures. She details a costly mistake at Cinnabon where a lack of courageous questioning eroded franchisee trust, and how rebuilding that trust led to greater long-term success. Turnarounds and Innovation in Franchising (Priority: 4/5): Cole describes her hands-on approach to reviving Cinnabon during the recession—working in bakeries, listening to frontline employees, and launching smaller, affordable menu items. She addresses the emotional resistance from franchisees and the formula for getting buy-in. Pricing Psychology and Brand Positioning (Priority: 3/5): Cole discusses the importance of positioning as a premium brand, the risks of competing on price, and the need for entry-level price points during downturns. She shares the tension between leaving money on the table and pricing out customers. Intentional Relationship Check-Ins (Priority: 3/5): Cole reveals her monthly ritual with her husband—asking structured questions about the best, worst, and improvements needed in their relationship—and how she applied similar practices in business one-on-ones. Leading with a Heavy Heart (Priority: 3/5): Cole shares personal experiences of leading through miscarriages and heavy travel, emphasizing the need to decide when to stay in the game and when to step out, and the power of vulnerable communication with teams.

Key Arguments: Gratitude can become a trap if it prevents pursuit of something better; leaders must balance gratitude with responsibility to improve. Defaulting to belief in people yields high upside; the few letdowns are a small tax worth paying for the gains. Doing the right thing for stakeholders (franchisees, employees, customers) often requires bending or breaking internal rules, but it builds long-term trust. Innovation requires courage to question seasoned experts; failure to do so can lead to trust-destroying mistakes. The 'event after the event' matters more than the event itself—how you communicate and repair after a mistake defines your leadership. Change requires confronting reality, building a coalition of the willing, and letting early adopters tell the story to spread adoption. Pricing is rooted in brand positioning; premium brands must avoid the value commodity race while offering accessible entry points during recessions. Intentional, structured relationship check-ins (monthly) can deepen personal and professional connections and prevent drift.

Data Points: Age at first corporate job: 20 years old - Cole became a corporate executive at 20 after dropping out of college, running the employee training department at Hooters. Age as COO/Cinnabon president: 31-32 years old - Cole became COO at 31 and president of Cinnabon at 32 during the 2010 recession. Costco product launch cost: Millions in EBITDA walked away - Cole killed a Costco deal worth millions to preserve franchisee trust after a miscommunication. Burger King opportunity result: Grew EBITDA by multiples - After rebuilding trust, placing a Minibon in 7,000 Burger Kings far exceeded the lost Costco revenue. Food budget for family: $10 per week for three years - Cole's mother fed the family on $10/week after leaving her alcoholic husband. Age at first restaurant opening: 19 years old - Cole opened her first franchise in Australia at 19, despite having no idea how to do it. Monthly check-in frequency: Every month since meeting - Cole and her husband have done structured relationship check-ins every month since they met.

Pivotal Quotes: "The upside of believing in people is so high, and not but, and some will let us down. And the frequency that I'm let down is so low compared to the frequency that I'm proven right in people's potential." — Kat Cole: Cole explaining her pragmatic optimism and why she defaults to trust despite occasional disappointments. "It is always more important to do the right thing than to be right." — Kat Cole: Cole reflecting on the lesson from her Argentina experience and the tension between corporate standards and local cultural adaptation. "Just because you can do something does not mean you should." — Kat Cole: Cole addressing franchisees after the Costco misstep, explaining why she walked away from a legally permissible deal.

Implications: Leaders can gain more by trusting people and taking risks, even with occasional failures. Intentional vulnerability in relationships (personal and professional) drives depth and resilience. The 'dark side of gratitude' warns that humility without courage can stall progress—a critical lesson for individuals and organizations avoiding necessary change.