Think financial advisors don’t have much to learn from the food industry? Think again, according to Kat Cole, the COO of Focus Brands and head of its business in North America — which includes Cinnabon, Auntie Anne’s, Jamba Juice and other franchises.
At the Raymond James Women’s Symposium in Tampa on Wednesday before about 400 female advisors and 250 other guests, the president and CEO of Focus admitted that producing both quality and consistency on a daily basis “is a challenge, but a powerful network … can deliver on this mission.”
“When it comes to food and financial advice, there are similarities,” Cole explained, such as their having brick-and-mortar locations and engaging in community-based work.
There’s also the growing digital competition and transformation of the industries. “More and more sales happen with UberEats … and that causes us to question, what will happen with my … business 20 years out?”
With change a constant, it’s critical for advisors to accept the fact that the next generation of clients “will view it all differently from their parents,” Cole said.
To stay in business, try these three strategies: One, “evolve your products and services so they feel relevant to consumers”; two, address economic issues involved with your business model, i.e., the unit-level costs tied to labor expenses, competitive pressures, etc.; and three, figure out which brands/products and services you want to keep in your portfolio.
To maximize your impact on clients, “fire in the belly” is crucial, Cole said. “If we don’t do something, the competition will.”
It’s worth questioning which products and services you have decided not to offer and say, “That’s unacceptable,” she said.
Instead, ask yourself, “I have to do this — and how can I do it credibly? With partners?” she said. In other words, focus on how collaboration and cooperation can help you become more competitive.
As for keeping your business in balance, “Just because you can do [something new] does not mean you should,” Cole said. Businesses have limited resources, so it’s best to focus on producing your “highest return” rather than “being it all for everyone.”
How did she learn this? Through the school of hard knocks, she says, describing what happened in 2010. That’s when consumer spending was down, and the anti-carbohydrate Atkins diet was popular.
Just for the record, Cole said, “People do not go to the mall or the airport in a recession … when our core products were up against all the trends. But the challenge is to not run [away] and figure out how” to survive.
In the case of Focus Brands, it thrived — doubling earnings before taxes, depreciation and amortization in three years.
Across industries, Cole explained, there are many similarities and it comes down to being resilient — using people, technology and other resources to empower success.
For the executive, two success stories and one failure stand out from the rough period of 2010 and the following few years.
She attributes the successes to her desire “to see the truth and ask questions over and over [about the business] to get an understanding of the patterns,” which she did for about 60 days by working in the franchise operations.
The key question to ask, according to Cole, is what can you throw away and what can you keep? Or, put another way, what do customers want you not to do anymore and what do they value?
“It’s about relentlessness — all things count in terms of your return on effort,” the executive explained. “And consumers do not value certain things.”
The flip side of this focus is its opposite: “When do we say no?” Answering that comes down to appreciating exactly why clients turn to you and when do not offer what they need, resulting in missed opportunities and lost business.
The Size Question
For Cinnabon, with a classic roll that packs 880 calories (including frosting), the question that kept popping up was: Do you have a smaller one? “And that was an easy fix, sort of,” Cole said.
Franchisees feared they would lose sales by offering a smaller product, she explains. But the reality was that the smaller, cheaper version likely would bring them rapid growth.
How did Cole get her franchisees to come around?
First, “We confronted reality,” she said. “We did not have an optimal strategy” at the time.
The second step in a situation like this is to “find a coalition of those willing to do something new,” the executive says. Their success gives you a story to tell others. In Cinnabon’s case, the company found consumers would often buy more than one of the new smaller product.
“When you do the right thing, it pays off — if we can get out of our own way,” she added.
Third, “Form strategic partnerships when you want to add a new service or business model,” according to Cole.
For Cinnabon, it turned to partners to launch a mini-Cinnabon. “If you have the courage to shrink to grow, in our case, it meant we made the business slightly more accessible.”
Cole also takes 360-degree feedback seriously, speaking with colleagues once a month on what’s working in their relationship and what needs improving. “Make time, check in,” she said, in both professional and personal groups.
Also, consider “the Hot Shot rule,” which she defines as what you envision your superhero would do in your shoes.
“What other opportunities are there to take, if you put aside fear, paranoia and the like?” she asked. Answer that question and then take one step — immediately — to realize this goal.
“Often, your team will turn to you and say, “What took you so long?!” Cole said. You have to stay close to opportunities or face tough consequences. “But nothing is a failure. It’s all a journey to improvement.”