Grit: An In Depth Conversation with Michael Coles about “Disruption”

This interview with Michael Coles was originally published on The Combine’s Blog.

If you live in or near Atlanta you’ve most likely heard the name Michael Coles. In our quest to change the way large enterprises go about innovating and disrupting themselves and their industries, we reached out to Mr. Coles to learn more about him and share how he led massive disruption within five totally different industries. In one word, it’s “grit.” Following is an in depth dialog I recently had with Michael Coles, in which Michael recounts several stories that epitomize the methods he used to lead his teams to success.

Coles has succeeded in a lot of different market spaces. What is the central element, the theme to his success, regardless of the industry? What is the one thing that Michael Coles brings to any organization that ultimately brings success?

It’s interesting that you ask that. I’m near the end of writing a book about just that! I’m going to encourage people to get out of their comfort zone; to let people know that they can do more than they think they can if they are willing to take a risk.

Michael Coles’ career was about more than lack of fear of taking risk. Since he was a kid, he knew he was a good problem solver. He recognized that he has a gift to cut through the noise of situation, get right to the heart of how to solve a problem or improve something about a process. The ability to solve problems plus the vision that you have after you solve the problem is the key.

Putting out a fire is good, but how do you prevent the fire from happening again?

Mr. Coles says his strongest talent is surrounding himself with people that have more talent than he does. “That makes me look really good!”, said Coles. “I always look to the future. Lots of entrepreneurs and new business people live in the moment, and fail to think about what might happen when that moment is over. It’s great to live in success, but success is a fleeting moment. Success is about knowing what to do next.”

Good Cookies or Great Cookies?

So do you innovate or disrupt when you’ve already built a successful business, as Coles did seven years after founding the Great American Cookie Company? “A total reboot.”

First, let’s note that the very first day in the very first location of The Great American Cookie Company, we almost burned the entire mall down because we forgot potholders! There’s a lot about the business we didn’t know, because we had never actually done it before. In 1984, we completely revamped the company. Even though we had been greatly successful for seven years, I came back from a cross country bicycle ride (more about that later), and I saw the light. The company was good, but not great. If we did not move from good to great, we would be out of business in 5 years. So we asked, what could change? The answer was simple but huge: the name and the product. We shortened the name from The Original Great American Chocolate Chip Cookie Company to Great American Cookie Company to eventually become Great American Cookies, which it is today.

Then we completely revamped our product. That took great courage from our entire team. We didn’t take months and months of research to determine if our changes would work. We tested the changes in only a few stores, and it went pretty well. So, we just went in and changed everything, literally overnight. Our big vision was 30 years in the future. Not a revolution, but constant evolution: systems, design, product, training, quality. It was a scary moment but it worked.

“…If they are willing to take a risk.” That Michael Coles statement rings true in that story. It’s difficult to find a successful business these days with leadership willing to burn everything down today to make sure the company is successful in 30 years. My question to Coles about that massive change was this: how did you do it?

The biggest mistake any leader can make is a lack of communication. Communication is the cheapest tool there is to get everyone on the same page. Down to the person on the front line selling the product. People hate change, so they have to understand why you’re changing. We started by asking everyone in the company this question: “If we were going to open a cookie company today to compete against us, what would that new company look like? What would be different? What might be the same? We gave our team permission to let the past go completely and just think about how they would defeat the market leader if they had the opportunity.

For context, we have to remember that this momentous change happened in 1985. There was no internet. There were only a few cell phones (we called them “car phones” back then). Leaders had to go face to face in order to properly communicate any message, especially something as important as a total company revamp. Like many franchisors, the company owned some of its branded stores, so they started by communicating to the teams in 10-15 of those corporate owned stores. Coles’ entire team was there at every store. Coles was there at every store meeting.

Once they had communicated their vision to their own stores, they invited their top three franchisees to participate. Again, they took their communications directly to the franchise owners and then the franchised stores. These franchisees were not obligated to change anything about their stores, but because they heard and believed in the long term vision that Coles and his team laid out for them, they changed all their stores.

At that time, Great American Cookies operated 80 stores between company and franchised stores nationwide. The following 9 years, after the revamp, the company grew to 400 stores nationwide. The franchisees and their teams all believed in the vision: better product, better stores, more fun, better careers. They believed it because Michael Coles insisted on proper and thorough communication of the vision that they had created.

If you’re going to succeed against competition, there’s always the disruptive factor. We recognized that if we were going to be an impulse business, we would never survive. We had to figure out a way to make each store a destination. That challenge was the birth of the Cookie Cake. We set up large display cases like a jewelry store to show them off with “happy birthday,” “congratulations”, etc. That move gave us two competitive advantages: a larger ticket item and a reason to visit the store. We created a situation in which when someone ordered a Cookie Cake, they’d have to make a trip to the store. An impulse purchase became a destination purchase. Cookie Cakes became 40-45% of our revenue. That is the reason Great American Cookies succeeded.

No Corporate Coffee!

Fast forward to Coles’ next challenge: Caribou Coffee. Caribou was a corporate turnaround, because the business was being soundly defeated by Starbucks in almost every market. Again, the solution came in the form of very specific communication; however, this time, it was the medium through which the communication was delivered that made all the difference.

It started with one question that kept coming up in every meeting: “how do we get more people to come to stores all over country?” I said, “you’re asking wrong question: why don’t more people come?” Instead, let’s ask, “Why does ANYONE come to Caribou instead of going to starbucks when Starbucks is more convenient?” The answers to that question came from a whiteboard session of discovering and recording all the reasons people came to Caribou. Next, we challenged ourselves with how to implement the most important of these strengths within every store. The most important change we made was to train our customer-facing team members to “learn a person’s DNA”. DNA means “drink normally asked for.” We may not know your name, but we know what you like. Once that connection exists, the guest is going to stick with Caribou because when you walk in the store, we know what you want.

At this time, Caribou had approximately 200 stores and a decent manner of communicating, but implementing changes was more difficult because Caribou was already a very good company. Very good, but not great. In fact, “good” was preventing “great.” We had to put certain disciplines in place that our people thought would destroy the culture of the company.

Communicating the value of these disciplines became the Coles’ greatest challenge.

If you tell your kids to “go clean your room,” 5 minutes later, they come back and say it’s done. We all know what that means. You can talk at your kids all day, but that communication doesn’t usually work. Instead, go do the job yourself, and then take a picture to show what “clean” looks like. That’s what we did. We started with what we considered to be “great” stores. Marketing suggested we hire actors, and make a video of what our new disciplines looked like in real life. Instead I knew from visiting our stores that we had some stores delivering a “Great Experience”. So instead of actors, we used our own team members to convey the message. Once they saw it in action, they accepted it. The funny thing was that the main “discipline” that was simply unacceptable was the black apron. At the mere suggestion of store employees wearing a black apron, we got a very strong response: “Caribou is not corporate coffee! Starbucks with green aprons is corporate coffee!” So it was our job to communicate to the entire organization that wearing a clean, black apron allows you to look clean and fresh. It had nothing to do with anything else. Just a professional look. We did not do name tags, because we thought that might push people over the top.

It was this very specific, customer-centric differentiation that helped turn Caribou around to compete with Starbucks.

Get On Your Bikes and Ride!

Six weeks after nearly burning down that mall at the launch of Great American Cookies, Michael Coles was in a near fatal motorcycle accident. Immediately after the accident, he thought he might never walk again unaided. He was just 33 yrs old, and, at the time, realized that just waking up was something to be thankful for. Coles had started The Great American Cookie Company as a transitional business, but this accident dealt him a new hand: a walker, crutches, then a cane. At about the time he thought he was “recovered” as much as he ever would be, his 3-year-old daughter said, “Daddy! Race me to the mailbox!” He couldn’t do it. Michael Coles had just come to realize that he was disabled, and that he may have a daughter without a dad who could play with her.

He had done everything he was supposed to do to rehab, but his progress had stalled. Again, at this time, in the late 1970s, there was no health craze, no membership gyms everywhere, no FitBit or MapMyRun. So he did his own rehab, starting with a stationary bike, then a road bike, going increasingly longer distances. Then he got carried away: he rode from Dunwoody (just north of Atlanta) to Helen GA, a distance of 91 miles, in 12 hours. He rode the last 5 miles on 1 leg due to severe muscle cramps. When he crossed Chattahoochee River, he thought…

“How blessed am I that I had the determination to get better. How can I motivate others to do something this big for themselves?”

By riding even further! So Coles started in Savannah, GA, and rode across the United States to San Diego, CA. After he had limped across the country that one time, he decided to break his own record. He was well on his way in 1983 when he crashed after getting caught in a dust devil less than 500 miles from the finish, and broke his collarbone. The following year, 1984, he tried again to break his own record. In the worst weather ever, headwinds in his face the entire journey, he broke his record by four days. Then in 1989, Coles was invited to race from LA to NY against three other cycling teams. Coles’ team of four riders was the oldest team in the race, but they won. Their time: 5 days, 1 hour, 8 minutes. Their time is the fastest crossing ever and the fastest 3,000 miles ever completed under human power.

Michael Coles bicycled across the country 4 times after not being able to walk to the mailbox. All for his daughter. Obviously, Coles’ life was completely changed physically; however, this experience brought tremendous insights to his business life.

You are capable of far more than you know. In business and in life, it’s not what you plan for, but what you don’t plan for. The unexpected. What knocks you down and how you get back up. Every single hour on that bike, there was something unexpected that we had to overcome.

Next: Why Georgia is the New Hollywood

Georgia’s film industry now brings in $7 Billion annually. That wasn’t always the case. Someone had to be the catalyst that disrupted the floundering industry. That someone was Michael Coles.

Back in 1999, the Georgia Film commission, which was started in the early 70’s by then Governor Jimmy Carter, had nearly gone dark. There wasn’t even a Board of Directors or Advisors. With Governor Roy Barnes’ backing, Coles began sessions to figure out how to resurrect Georgia’s film industry. Coles went to other states to see what they were doing well. They needed an actual plan. Not just a plan for oversight, but a detailed financial plan that would help the industry grow for decades. The film industry had an estimated $150-200M economic impact on the state at that time.

Coles led the effort to create the first tax incentive to draw filmmakers to Georgia. In 2003, the year Coles left the Georgia Film Commission, the film industry in Georgia generated over $1B in economic impact. Now Georgia leads the nation in film production. That accomplishment began when Michael Coles looked 30 years into the future and asked,

“Who would ever imagine that Georgia could produce more films than Hollywood? I did.”


“Disruption Used to Be Called Differentiation”, and other great Michael Coles Quotations

Constantly evolve. The hardest thing on your laurels is resting on them. You just simply cannot stay the same. Your most innovative idea is immediately seen by your competition, and then they copy it. (See Facebook/Instagram vs. Snapchat) Ford used to run an advertisement that read, “We have all the great ideas!” But GM was selling all the cars, because GM stole and implemented all of Ford’s ideas.

Millennials. We must all learn from millennials. They think completely differently because they grew up with the internet as a life appendage. They don’t ever think about a brick and mortar business, but rather instantly think how to take it worldwide. The world is different now, and millennials grew up in that world.

New is Old, and Old is New. We now have ways to treat customers better in a less expensive manner than we ever have. A personal connection is less expensive now than it ever has been. Look at Amazon. Embrace the fact that new school sales & marketing is returning to old school methodology that is simply less expensive. The customer relationship is easier to hold on to than it ever has been because of the internet. That’s why retail is dying and Jeff Bezos has caught Gates and Buffett.

We are all Retailers. Every business is retail today. It’s not about what you sell. Products & services are equal. If you don’t give your customers a reason to come back, they are not going to come back. In every single business that does not have a contract, you start all over every single day. If you’re going to make someone wait an hour (doctor) you had better offer something of value for that.

Defying Goliath

Michael Coles will be publishing his book in 2018. Coles is titling the book, “Defying Goliath”. David killed a giant with a rock, right?

Yes, but the battle happened only because David had the courage to step into the valley with a slingshot and a few rocks not knowing what the outcome would be. We all face Goliath challenges every single day. Whether it’s changing careers starting a new business going back to school losing weight or even learning how to walk again. The real question you have to ask yourself is whether you have the courage to step into the valley.

The real question is, do we have grit? David had grit.

What do you think about that?

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