#117 Kat Cole: The Power of Possible
Kat Cole, former COO and President of Focus Brands, shares her journey from Hooters hostess to a respected business leader. She discusses the "dark side of gratitude," defaulting to believing in people, leading with a heavy heart, and practical strategies for leadership and personal relationships.
Deep Dive Analysis
17 Topic Outline
The Dark Side of Gratitude and Its Impact
Early Mentors and First Bets on Kat Cole
Kat Cole's Unconventional Career Trajectory
Humble Confidence and Believing in People's Potential
Customer Service Judo: The Chicken Wings Story
Challenges of Transitioning from Peer to Leader
Leading Cinnabon During the 2010 Recession
The Costco Incident: Losing and Rebuilding Franchisee Trust
Navigating Omni-Channel Tensions with Franchisees
Prioritizing Doing Right Over Being Right: Argentina Example
The Psychology of Pricing and Brand Positioning
Testing Price Changes and Introducing Smaller Portions
Learning from Working in Cinnabon Bakeries
Kat Cole's Formula for Implementing Unpopular Change
Leading with a Heavy Heart Through Personal Challenges
Monthly Relationship Check-ins with Her Husband
How Kat Cole Wants to Be Remembered
7 Key Concepts
Dark Side of Gratitude
This concept describes how being overly grateful for current circumstances can prevent individuals from recognizing opportunities or responsibilities to strive for something better, potentially keeping them in undesirable or stagnant situations.
Humble Confidence
A mindset characterized by not assuming one knows everything, but trusting in one's ability to figure things out. It combines humility and curiosity with the courage and confidence to tackle new challenges.
Pragmatic Optimist
A perspective that balances a default belief in the positive potential of people and situations with a practical understanding that some setbacks or 'taxes' are an inevitable part of the process.
Customer Service Judo
A technique for handling difficult customers by using their energy in a giving way to play the situation back to them, de-escalating conflict and changing behavior without direct confrontation.
Love for the Past as an Anchor
When a brand's efforts to protect its legacy and what made it special in the past become a detriment, hindering necessary innovation and adaptation to current market conditions.
Branded Ecosystem
A strategic view of a brand not merely as a core franchise business, but as a larger system of complementary retail channels that offer different versions of the product, collectively driving overall brand awareness and trial.
Doing the Right Thing vs. Being Right
A leadership principle emphasizing that it is more important to take actions that serve the best interests of customers, employees, or long-term relationships, even if it means deviating from established rules or being technically 'wrong'.
9 Questions Answered
It's when being overly grateful for current circumstances prevents individuals from recognizing opportunities or responsibilities to strive for something better, potentially keeping them in undesirable situations.
Acknowledge past imperfections, be consistent in new expectations, and understand that initial friction is natural as others adjust to the new role, as people may question why they were promoted or how they can enforce rules they didn't always follow.
As a leader, if you don't ask questions, no one else might, and failing to do so can lead to significant problems, even if you respect the experience of others who have been in the business longer.
Acknowledge wrongdoing even if legally in the right, take responsibility, make difficult decisions (like sacrificing short-term gains), and communicate clearly about future intentions while demonstrating integrity through actions.
Assume first that the criticism is correct, digest it, and then respond, which either reaffirms its incorrectness (allowing focus on productive relationships) or reveals a grain of truth to address.
The most important first choice is deciding whether to compete on value/commodity (a race to the bottom) or to position the brand on the aspirational or luxury end of its segment.
In less sophisticated environments, it involves managing extremes (preventing prices from being too low or too high), learning from franchisees with multiple locations, and sharing that expertise to optimize sales, frequency, margin, and profitability.
Ask 'What do we throw away?', 'What are we making you do that's not always adding value?', and 'What should we start doing?' or 'If you were me, what's one thing you would do differently to make the business better?'
Assess physical and emotional well-being, decide whether to engage or step back for a moment, and communicate transparently (to an appropriate degree) with the team to allow for support.
25 Actionable Insights
1. Default to Believing
Default to believing in people’s potential and possibilities, as the upside of being proven right in their potential far outweighs the low frequency of being let down.
2. Prioritize Doing Right
Always prioritize doing the right thing for the right reasons, even if you are legally or technically ‘right,’ especially when trust and relationships are at stake, as preserving them is paramount for long-term success.
3. Beware Gratitude’s Dark Side
Be aware of the ‘dark side of gratitude,’ ensuring that being grateful for what you have doesn’t prevent you from recognizing your right and responsibility to work toward something better.
4. Leaders Must Ask Questions
As a leader, cultivate the courage to ask probing questions, even if you feel humble or respect those who came before you, because your role demands it to uncover truth and prevent problems.
5. Conduct Monthly Relationship Check-ins
Implement monthly relationship check-ins with your partner, using specific questions (e.g., best/worst part of last 30 days, what can I do differently) to foster intentionality and deep understanding, aiming to be as good at home as in business.
6. Three Questions for Business
To identify critical business improvements, ask employees: ‘What do we throw away?’, ‘When do we say no?’, and ‘If you were me, what’s one thing you would do differently to make the business better?’, then immediately act on patterns found across these answers.
7. Embrace Humble Confidence
Approach new challenges with ‘humble confidence,’ believing you can figure things out rather than needing to know everything upfront, which balances humility and curiosity with courage and confidence.
8. Leaders: Prioritize Self-Care
Prioritize self-care, mental health, and physical wellness as the essential foundation for effective leadership, especially during exceptional times of change and difficulty, to ensure you are strong and present when needed.
9. Be Open & Vulnerable
Become comfortable being incredibly open and vulnerable with your team, as this fosters reciprocation, creating opportunities for mutual support and permission to prioritize well-being when needed.
10. Change Formula for Unpopular
To roll out unpopular changes, confront reality by presenting both positive and negative trends, find and empower a ‘coalition of the willing’ to architect and champion the change, then shine a light on their success to inspire broader adoption.
11. Practice Customer Service Judo
When dealing with difficult customers, use ‘customer service judo’ by using their energy in a giving way (e.g., proactively offering a small concession) rather than fighting them, which can disarm them and change their behavior.
12. Address Performance Directly
When addressing performance issues like lateness, clearly state the impact of the behavior on others and the business, and ask the person to commit or adjust their priorities, treating them like an adult and clarifying dependencies.
13. Lead Former Peers Authentically
When promoted to lead former peers, acknowledge your past imperfections and commit to doing things the right way going forward, expecting the same from your team, which earns respect and levels up performance faster.
14. Assume Criticism is Correct
Anytime you are criticized, first assume the criticism is correct and allow yourself to digest it before responding, which helps you either reaffirm its inaccuracy or find a grain of truth to address intensely.
15. Strategic ‘In/Out’ Decision
During personal difficulties, strategically decide whether to ‘put yourself in the game’ or ’take yourself out’ for a moment, based on physical and emotional well-being and whether it will be a positive experience, communicating this to your team for support.
16. Balance Leading & Collaborating
Build the leadership muscle of balancing leading, directing, and collaborating, making clear decisions based on input (or despite it) and communicating the ‘why’ to shape the future working culture.
17. Address Upset Stakeholders
When addressing upset stakeholders, first allow them to express their anger, then clearly state what went wrong, explain the corrective action, and set clear expectations for future similar initiatives, emphasizing learning to repair trust.
18. Navigate Omni-Channel Tensions
When managing tensions between different business channels, honor the emotional concerns, provide data evidencing incrementality, and most importantly, ensure the new channels genuinely build the core brand and business to mitigate complaints.
19. Choose Pricing Strategy
Make a fundamental choice about your brand’s pricing strategy: either compete on value (a race to the bottom) or position as aspirational/luxury, competing on quality, as this dictates brand positioning and subsequent pricing psychology.
20. Optimize Pricing for Frequency
Identify the ‘sweet spot’ pricing range that optimizes trial and repeat purchases for your product or service, avoiding prices so high they relegate it to gifting or so low they devalue the brand.
21. Adapt to Shrinking Markets
When the market for your core, expensive product is shrinking, introduce smaller, less expensive alternatives to capture a growing segment of customers, thereby ‘going to where the puck is going’ and expanding your market.
22. Manage Pricing Extremes
When sophisticated A/B testing isn’t possible, focus on managing pricing extremes to prevent sales drops from being too high or leaving money on the table from being too low, ensuring basic pricing health.
23. Leverage Bundles & Subscriptions
Explore pricing strategies beyond individual item pricing, such as bundles or subscriptions, to create additional value for customers and enhance engagement with your product or service.
24. Reinvest Innovation Revenue
Reinvest revenue generated from new innovation channels back into the core brick-and-mortar business to accelerate recovery and growth for existing stakeholders, creating a virtuous cycle that strengthens the foundation.
25. Frame Brand as Ecosystem
Frame your brand not just as a core business, but as a ‘branded ecosystem’ where the franchise business is the heart, surrounded by complementary retail channels offering variations of the product to diverse customer occasions.
7 Key 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
Sometimes we can be so humble, so grateful for what we have, that we forget that we have the right, and in the case of being a leader or a parent, the responsibility to work toward something better.
Kat Cole
It is always more important to do the right thing than to be right.
Kat Cole
Just because you can do something does not mean you should.
Kat Cole
Anytime you are criticized, assume first it's correct. Just allow yourself to digest that and then respond.
Kat Cole
The first way to get out of a hole is to stop digging.
Kat Cole
I want to be remembered as someone who helped people realize that they're capable of more than they know.
Kat Cole
2 Protocols
Kat Cole's Change Formula for Unpopular Initiatives
Kat Cole- Confront reality: Understand what's going on in the market and the consequences of action versus inaction.
- Find the coalition of the willing: Identify people who already support the change and believe in it.
- Lean into them: Empower these willing individuals to be a part of architecting what the change looks like.
- Shine a light on them: Let the coalition of the willing tell the story of the change to others.
- Rinse and repeat: Apply this iterative process for ongoing change management.
Monthly Relationship Check-in (Kat Cole and Husband)
Kat Cole- Ask: 'What's been the best part of the last 30 days?' (answers must be related to the relationship).
- Ask: 'What's been the worst part of the last 30 days?' (answers must be related to the relationship).
- Ask: 'What is one thing I can do differently to be a better partner for you?' (or something to stop, start, or continue).
- Ask: 'What has worried you the most related to our relationship in the last 30 days?'
- Ask: 'What have you been the most grateful for?'
- Ask: 'What are you most proud of?'
- Ask a question about goals related to the family.