Cinnabon president: Failure can be a good thing

Cinnabon President Kat Cole says she celebrates failure.

The 36-year-old head of the bakery brand said choosing a non-traditional path in business and in life has reaped unexpected rewards. Even when the ideas seem half-baked—like a Cinnabon-flavored lip balm.

"At Cinnabon, we have a culture of experimentation, so we challenge each other and our partners to bring us wacky ideas," Cole said.

Part of Atlanta-based Focus Brands, Cinnabon took its familiar scent and cinnamon-soaked cream cheese flavor to a line of more than 70 consumer packaged goods available in more than 60,000 retail locations. Partnerships with Kellogg, Pillsbury, Air Wick and Jim Beam's Pinnacle Vodka help drive innovation at the bakery chain. Cinnabon has 1,200 franchises globally, and sells about $1 billion in consumer products annually.

Read MoreA once-hot restaurant segment that has plunged

In addition to a failed Cinnabon lip balm early in the company's foray to licensed products, Cole cited the short-lived savory Pizzabon, "probably not totally in line with the brand," as an opportunity to refine the brand's innovation, rather than an outright flop.

"We learned a lot from it," Cole said, "and that was really more valuable than the product's success on its own."

Boxes of Cinnabons are displayed at the Golden Globe Hollywood Buffet in Los Angeles.
Chris Weeks | WireImage for Silver Spoon | Getty Images
Boxes of Cinnabons are displayed at the Golden Globe Hollywood Buffet in Los Angeles.

This fall, Cinnabon plans to launch an artisanal version of its bakery franchise, dubbed the Bon Bake Shop, in a Houston-area mall. The concept will offer new frosting and topping combinations, as well as smaller, snack-sized treats. The popular, large Cinnabon Classic Roll, familiar to mall shoppers and airline travelers, is about 880 calories.

Cole's personal path to business success famously includes her early career as a Hooters waitress, while a college student. She moved quickly up the executive ranks, when the growing restaurant chain started opening franchises in foreign countries.

Read MoreNever wait for a restaurant check again—here's how

"They were looking for key employees to help train the new staff, and I was chosen because I had worked every job in the restaurant," Cole recalled. "I was a cook, a dishwasher, a manager, a waitress, a bartender, you name it—I had done the job. So I was an obvious selection to go be a part of this team." Increased travel to countries as far-flung as Australia, Mexico and Argentina led to Cole dropping out of her undergraduate engineering program.

"It very quickly became a clear passion and something that I loved and was very good at, and I was also failing college because I was gone so much," she said. "So I had to make a choice and the choice was to drop out.''

—CNBC's Katie Kramer

"On the Money" airs on CNBC Sundays at 7:30 pm ET.