Tracy Britt Cool: Building Great Businesses
The Knowledge Project
The Five M's: Moat, Market, Management, More Potential, Margin
Shane asks what they prioritize; Tracy lays out the five M's for evaluating investments and explains margin of safety.
Warren Buffett called Tracy Britt Cool his “fireman” due to her reputation at Berkshire Hathaway for turning around struggling businesses.
Today, Britt Cool is the co-founder of Kanbrick, where she applies her knowledge to the middle market.
In this episode, you’ll learn how she went from writing a cold letter to Buffett to being sent in to fix struggling Berkshire subsidiaries, how to evaluate real business performance, and how incentives, culture, and structure line up to create lasting success.
* Learn more and get my 31 highlights from this conversation at: https://fs.blog/knowledge-project-podcast/tracy-britt-cool/
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Approximate Chapters
00:00 Intro, recent reading, and family life
03:04 Alan Mulally's Turnaround at Ford
04:22 If you're not having fun 4 days out of 5, it's time to move on
05:03 The Pampered Chef Turnaround
07:06 Value Creation is Changing from Investing to Operating
08:38 Why Companies Fail to Adapt
09:23 Upbringing, education, and early career outreach
10:09 Lessons from the Farm
15:48 Writing Letters to CEOs
16:57 Lessons from Warren Buffett
18:25 Ad Break
20:57 Buying Companies at Kanbrick
22:38 The 3 Components of Long-Term Thinking
25:11 Avoiding the Complexity Trap
26:23 Turning Around a Declining Business
28:03 Attracting Talent to a Declining Business
30:29 Matching Structure to Time Horizon
32:00 Growing Margins
33:25 The Process: What to Focus on When Operating a Business
35:10 The Three Buckets of Putting People First
37:00 How to Evaluate Talent
40:16 Avoid These People At All Costs
42:23 Sourcing Deals
43:56 The Five Lenses to Evaluate a Business like Warren Buffett
45:14 How to Evaluate a Moat
49:29 How Quantitative Analysis Misleads
50:25 A Detailed Look at Return on Invested Capital
53:18 What Makes an Attractive Market
54:33 Finding High-Potential Businesses
57:00 The Post Close Playbook
1:02:03 Repeatable Business Systems
1:04:06 Why Copying What Works is Hard
1:06:01 Mistakes in the Past 5 Years
1:10:13 Debt and Leverage
1:12:20 3 Ways to Think about AI
1:15:13 What Most People Get Wrong When Hiring
1:21:12 Businesses to Avoid
1:22:35 What Not to Do
1:24:31 Public vs. Private Company Boards
1:27:04 How Warren Buffett Taught Katharine Graham Business
1:29:28 Each Hire is a Million Dollar Decision
1:31:02 Evaluating Integrity
1:32:36 The One Word That Changes Everything & Keeps People Honest
1:35:52 Principles & Lessons from Business History
1:36:59 Inflation
1:38:46 Quarterly Reporting
1:40:22 Public Company Heroes
1:41:41 Companies & Political Opinions
1:42:46 What is Success for you?
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About Tracy
Tracy Britt Cool is the co-founder of Kanbrick and former CEO of Pampered Chef. At Berkshire Hathaway, she worked directly with Warren Buffett as his financial assistant.
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This Episode Made Possible By:
Shopify: https://shopify.com/knowledgeproject
reMarkable: https://www.reMarkable.com
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