Cinnabon’s Kat Cole: Savoring the Sweet Taste of Success

Cinnabon

Kat Cole, the 30-something president of Cinnabon, doesn’t have an Ivy League resume or famous family pedigree. She’s a leader whose life experiences — including being raised by a single mother and working her way up from washing dishes at Hooters — have led her to the top of business world. Cole was a panelist at the recent Forbes 30 Under 30 Summit in Philadelphia, where she spoke with Knowledge@Wharton on Wharton Business Radio on Sirius XM channel 111 about her unconventional path to leading a $1 billion global business. (Listen to the podcast above.)

Knowledge@Wharton: You have an amazing story. Your mom was single and you were a leader within your own household, helping to raise your two sisters.

Kat Cole: It was a blessing and a curse. You never want to look at a family situation with an alcoholic father and a single mother and say that was a good thing because you would not wish that on anyone, but there certainly were benefits. I took on leadership roles at a young age, had to help my mom out and got to see an incredible example of a woman leader just doing what it takes to make things happen despite not having a lot of money. For three years, she fed us on a food budget of $10 a week. I grew to love Beanie Weenies.

I just had this great leadership example, so I have always joked that I have this competitive advantage in business. I grew up seeing one of the best leaders I know, and that was my expectation of the way people would behave. It certainly is the standard I hold myself to.

Knowledge@Wharton: You got started working at a young age to help out your household, and went on to work at Hooters. It seems like that was the job that really got your front-office mindset going because you did not just work as a server. You did a variety of jobs.

“I grew up seeing one of the best leaders I know, and that was my expectation of the way people would behave.”

Cole: Like most people, I think my first job made a huge impression on my work ethic. Cleaning tables and washing dishes and putting up with nice guests and not-so-nice guests certainly exists in a restaurant just as it exists in a boardroom or in a negotiation. Those were fundamental business behaviors and situations that I learned to deal with when I was 18 and 19. In addition, that job ended up being a platform with a growing company to travel internationally at such a young age. Certainly, my plan to become an engineer and an attorney got thrown off track when Hooters continued to grow and asked me to go open franchises all over the world.

Knowledge@Wharton: You got the opportunity to see how the kitchen works and how the operation works out front. That is not something that an 18- or 19-year-old often gets to do, let alone really understand it and know what that means.

Cole: I think that it is something that not a lot of people get to do, but I also push back on that and say it is probably something not enough people ask to do. Or they do not see the opportunities. One day, when I was 18, all the cooks quit. They were mad at the manager or something, and they all walked out. Probably 75% of the employees on that shift just said, “Well, what are we going to do? I guess we go home.” But there were a couple of us that said, “We do not have to go home. Let’s just go figure it out and cook.” Right there, I saw the division between people who step up and take an opportunity to be curious and helpful versus those who need those who are curious and helpful to kind of move them along. There was no desire to get anything from it other than to get through the shift and get paid the tips that I was expecting to get paid. There were many other times that opportunities presented themselves to work bartender shifts or close restaurant and run management shifts. Over the course of a few months, I had worked every job in the restaurant, which absolutely made me the right candidate to travel overseas.

Knowledge@Wharton: What were you able to learn from those travel experiences?

Cole: I learned so much. Being a 19-year-old in Australia and Central America and South America was awesome. It was fantastic. We were opening businesses and launching a franchise that had never existed in those countries or continents, so I learned a lot about myself as a leader.

When you go into one country to open a franchise with a team of 10 people and then in the next country 60 days later, it is the same job but a totally different team of people; you have to start your leadership all over again. They do not know you; you do not know them. So, I built this communication muscle and leadership muscle that allowed me to learn how to build trust quickly because I did not have the luxury of having long-term relationships in that type of a job. It was always a new team with a new franchisee in a new country but similar goals and objectives. That is a pretty powerful leadership skill to learn early on.

Knowledge@Wharton: How tough was acceptance of the brand in those countries?

Cole: The word “hooters” does not translate into any language, so we had to redefine the concept literally over and over. But it was different in every culture. In Australia, because they are such rabid sports fans, it was a blast. They loved it. They got the socially acceptable female sex appeal. It is not a particularly constrained social structure, so they really loved the concept. But when we got to China and opened two Hooters, it was interesting. It took on more of an innocent role. The employees wore the exact same uniform – same food, same sports – but they would sing songs like cheers and dance every hour, almost as if it was Disney World. It took on this American entertainment sort of set up, and it was a family restaurant.

“You cannot just take something that exists in one way in one country and expect it to literally translate [to another].”

Knowledge@Wharton: How did the opportunity at Cinnabon present itself, and how did your leadership roles at Hooters help you?

Cole: I really have to trace it back to a series of events, almost as if a domino was flicked back when I was 19 and just kept hitting dominoes leading up to the Cinnabon opportunity. In my mid-20s, I started volunteering for industry organizations. I became the youngest board member of a state restaurant association. I became the chair of the board of the Georgia Restaurant Association. I did political fundraising for business-friendly candidates, and I did all kinds of work to elevate the industry and shape the environment in which we did business. That gave me an audience that was very different from my typical company: private equity firms, banks, analysts, other CEOs and restaurateurs. Those individuals became friends and colleagues over time. So, when the opportunity came up for the private equity firm in Atlanta to look for someone to run one of their portfolio companies, I was not just a name on a resume. By the way, my resume — child of a single parent, dropped out of college, worked at Hooters my whole life — was not exactly stellar. But because of the interactions I had with them in other nonprofit and industry leadership capacities, I was much more than my resume and able to get credit for the work I did that might not have been literally articulated by my title or the experience on my resume. I was asked to come and interview at the age of 31.

Knowledge@Wharton: That is an amazing start. The Cinnabon brand is so well-known. You do not go to any mall in the country where there is not a Cinnabon, and now it’s in a lot of airports. How big can this brand get?

Cole: The brand really has unlimited potential, and that is evidenced by the last four years since I have been there and the team has been there. We have taken what is a killer beginning of a brand and expanded it to over $1 billion in consumer product sales. Actually, only 25% of our consumer sales is from franchising. The other 75% is from the products we have in grocery stores: Pillsbury, Green Mountain, our vodka that we launched. Some of the partnerships that started a decade ago have lasted, and we have just made more of them with a new inclusive approach on the business side. Now, we are in 56 countries with the franchise business. We are in about 10 countries with the licensed products, and we could double or triple that in the next four years.

Knowledge@Wharton: I would imagine having the experiences you had overseas and seeing other cultures will potentially open up some of those venues?

Cole: It certainly helped me understand the importance of culture integration — culture of a brand, culture of a concept or a business, and the local culture for the sake of the employees, the consumers and society. You cannot just take something that exists in one way in one country and expect it to literally translate. Just as with a language, you have to tweak some things. Usually, 10% of the menu changes or 10% of the packaging, or the naming really has to be tweaked in order to resonate with consumers in a particular culture.

“On the corporate side, I look for one thing [in prospective employees], and that is grit.”

Knowledge@Wharton: It is tough for me to walk past a Cinnabon because of the smell. I cannot imagine what it is like to be there in the office when all the products come rolling by.

Cole: It is insane! Literally, a couple days a week I am walking around eating different flavors of frosting out of a cup. It is awesome. We have grown so much that our R&D center is now across the street, and people walk in and say, “Oh, it does not smell like Cinnabon.” But I bring them to my office. Last year, we launched Air Wick Cinnabon air fresheners, so in my office it smells like Cinnabon.

Knowledge@Wharton: The brand itself shot on to the market 29 years ago. It is an indulgence in some respects because although it is a breakfast food, Cinnabon is really a dessert.

Cole: It is an indulgence, and malls’ busiest part of the day is 4 p.m. to 7 p.m. Of course, in airports we are really busy in the mornings. But a large part of our unit growth and sales growth in the franchise business has come from launching smaller portions and breakfast-leaning items in airports — like our little maple sausage bites with cinnamon syrup on the side and a few other smaller products for people who think cinnamon roll for breakfast but do not necessarily want to have a giant cinnamon roll on a Tuesday morning on an early flight out of Reagan National Airport. We have got some Cinnabon-like items that actually do work for breakfast, but it is an all-day snack.

Knowledge@Wharton: Breakfast has become huge in the food industry over the last few years. It is a very competitive area of the fast-food industry.

Cole: It is, and I believe so much in co-opetition. We have Cinnabon Delights at Taco Bell. We launched Cinnabon Minibons at Burger King. Even though we are all technically competing in similar spaces that cross over, Cinnabon is so highly differentiated and so relevant that we have developed products for many of those food chains, and that allows us to grow our business but do it in a way that is non-traditional. That is why, I think, from a business perspective, Cinnabon is getting so much attention.

Knowledge@Wharton: As the president of Cinnabon, what do you look for in prospective employees on your team?

Cole: We employ about 12,000 hourly people around the world. We look for people who can live the values of Cinnabon, which is literally being sweet and having fun. On the corporate side, I look for one thing, plain and simple, and that is grit Twitter . Grit can be evidenced even with someone who is just graduating college. It is stick-to-it-ness. It is the evidence that someone has progressed through something over time — their ability to deal with adversity and take on progressive and expanding leadership roles — even if it is a student association or a community group or actually in a job. And if I look back, that is exactly what I displayed when I was young.

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