Strategic Discipline Blog

In Love is Free. Guac is Extra.: How Vulnerability, Empowerment, and Curiosity Built an Unstoppable Team, Monty Moran shares the decisions he made on Chipotle’s priorities, “If the most important skill of a leader is to build a strong team, the second most important skill is the ability to make many good decisions, quickly. Of course, in some ways, this is a distinction without a difference, since building strong teams requires many good decisions.”

The CEO of any business/organization owns the human system of the business. Culture is their priority. The CEO is judged and rewarded based on the decisions he/she makes, or doesn’t make.

Decisiveness

When Monty came aboard in 2005, he discovered Chipotle had so much data, there were a lot of unmade decisions he could make quickly.

He made the decision for Chipotle to hire all their managers from within. The data revealed internally developed managers performed better and were four times less likely to quit.

He decided Chipotle should build smaller stores, discovering data demonstrating sales were higher in the small stores, which felt more intimate, cozy, were easier to clean and manage, cheaper to build, and had lower operating costs. Locations were easier to find too!

Moran decided to make throughput (the speed with which a customer came through the line) Chipotle’s number one operational priority because:

• the best teams were the fastest ones (and so throughput was an excellent metric to measure to determine the quality of a team);
• the only thing customers did not like about the Chipotle experience was standing in line, and we were losing sales when customers walked away from a long line;
• our average stores had long lines but had throughput three times slower than our fastest stores, with the same equipment.
• it cost us nothing to go faster, just better training and an awareness that it was important; and
• our teams loved the challenge of going faster and were very proud to be measured and rewarded for their ability to speed up.

He decided to create a second “make line” in all of Chipotle restaurants so telephone and online orders wouldn’t interrupt the throughput of their main service line. He realized Chipotle would have an ever-increasing number of telephone and online orders to contend with in the future. He decided to hire people not for their experience but for the characteristics of an excellent restaurant employee.

RESULTS

Chipotle’s same store sales, at 5 percent year over year when Moran started, rose to double digits, and remained the highest in the industry for a decade. Employee quality increased and Chipotle’s turnover dropped dramatically and stayed low. Simultaneously, while Chipotle’s managers were nearly all white men when he started, Chipotle’s promote from within policy led women and minorities to represent most of their managers. Chipotle got better crew candidates applying, due to their reputation for training hourly employees to be future managers.

The DECISION

Moran’s biggest decision fell in line with building the culture and rewarding those most responsible for Chipotle’s success, the store manager. He did this in several measures explained in Chipotle’s CEO’s Successful One Thing Focus

Clear expectations; focusing on metrics, and clarity of vision, are characteristics shared by all great businesses.

Moran developed The Chipotle Restaurateur program to provide his best Chipotle GM’s a vision to strive for.

Moran’s definition of Restaurateur:

A Restaurateur is a manager who creates a team of Top Performers, Empowered to achieve High Standards.

The key terms defined:

A Top Performer is someone who has the desire and ability to perform excellent work, and through their constant effort to do so, elevates themselves, the people around them, and Chipotle.

Empowerment means feeling confident in your ability and encouraged by your circumstances, such that you feel motivated and at liberty to fully devote your talents to a purpose.

High Standards means creating an excellent restaurant experience for each one of our guests and crew.

These definitions became extremely important to create the culture leading to Chipotle’s outstanding business results.

Are your business performance expectations defined?

What’s Your One Thing?

Do your people have a clear vision of your company’s future?

Are they being held accountable for and measured on their job performance?

To create an environment where everyone is inspired to give their best, contact us today to schedule a free exploratory meeting.

Growth demands Strategic Discipline.

To build an enduring great organization, requires disciplined people, disciplined thought, disciplined action, to produce superior results, and make a distinctive impact in the world.

Discipline sustains momentum, over a long period of time, laying the foundations for lasting endurance.

A winning habit starts with 3 Strategic Disciplines: Priority, Metrics and Meeting Rhythms.   Forecasting, accountability, individual, and team performance improve dramatically.

Meeting Rhythms achieve a disciplined focus on performance metrics to drive growth.

Let Positioning Systems help your business achieve these outcomes on the Four most Important Decisions your business faces:

Positioning Systems helps mid-sized ($5M - $250M) business Scale-UP. We align your business to focus on Your One Thing! Contact dwick@positioningsystems.com to Scale Up your business! Take our Four Decisions Needs Assessment to discover how your business measures against other Scaled Up companies. We’ll contact you.

NEXT BLOG – 12 Ways to Create a Feeling of Empowerment

Monty Moran is great at asking questions. In my view he's an expert on empowering people. Next blog we’ll explore his 12 Ways to Create a Feeling of Empowerment