Conservative Leverage and 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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