*Image from Chipotle foods
Now Reading | How Chipotle transformed itself by upending its approach to management. (Quartz)
As a big proponent of strong company culture, I loved this line early on in the article: In 2005, The US company underwent a transformation that would make its culture as distinct as its food.
As more than 1,000 stores opened across the US, the company focused on creating a system where promoting managers from within would create a feedback loop of better, more motivated employees. That year, about 20% of the company’s managers had been promoted from within. Last year, nearly 86% of salaried managers and 96% of hourly managers were the result of internal promotions.
One of the keys to Chipotle’s cultural transformation is their restaurateur program, which allows hourly crew members to become managers. They can earn $100k plus and they receive an extra $10k bonus every time they train a new crew member to become a general manager. Smart. Really smart.
According to co-CEO Monty Moran, “The foundation of our people culture, on which everything else stands, is the concept that each person at Chipotle will be rewarded based on their ability to make the people around them better,” Moran told Quartz.
“I walk into a Chipotle and the first thing I do is take notes on how I feel,” Moran says. “Is it fun, is it upbeat, is there camaraderie, is there pride? Enthusiasm? Is the place clean, does it sound and smell good? Is the line moving fast? Do the customers seem happy? How does it feel? And if it doesn’t feel excellent then I know it’s probably not going to become a restaurateur restaurant.”
The concept Moran has developed is simple—a well run restaurant happens because of well-managed and highly-engaged teams. Here are some of the things he examines when he reviews a store and notes he makes about potential negative influences that might be hurting the culture:
- The vision is not clear to employees or they are not inspired by it.
- People don’t really know what a restauranteur is or the definitions of a top performer.
- People aren’t focused on making the people around them better, and are therefore not truly top performers.
- Low performers are allowed to remain on a team, dis-incentivizing the rest of the team.
- New employees are not being set up for success in the restaurant with proper training and guidance.
- Managers are not sitting down regularly with their crew people to have one on one conversatoins
- The managers are not connecting deeply enough with their people to create encouraging environments.
- People are not aware of their opportunities at CMG or how they can advance
So it all this effort working and making a difference financially? Since its IPO in 2006, Chipotle’s growth has been exceptional. Sales have increased from $826 million that year to $3.2 billion last year. And the company had 9.3% growth in comparable store sales last quarter, which is remarkable for a 21-year-old company that hasn’t raised prices recently.
Bravo, Chipotle, for having such a strong vision of success and for focusing on your people as the key to that success. Rewarding people for making other people better is awesome.
Read the entire two articles here: