Chipotle Is Doubling in Size. What are They Doing Right?
Over the last 10 years, Chipotle has become a go-to for fast food in my life. I seem to never get tired of the salad bowl with brown rice, black beans, veggies, chicken, mild salsa, corn, sour cream, and cheese. I'm not completely sure why that is. Is it the locally sourced ingredients that make it work so well for me? Is it the never frozen, no artificial flavors, no preservatives, and simple ingredients that makes me feel like its totally healthy for me to pig out time after time? Who knows? But one thing is for sure, Chipotle has been a force to reckon with when it comes to its track record for growth and expansion.
Since 1993, Chipotle went from humble beginnings to the global 3,100 restaurant lunch and dinnertime staple that it has become today. Furthermore, they have recently announced that they will be hiring another 15,000 employees in preparation for the March to May "burrito season" as part of a broader plan to double in size. This would equate to roughly a 15% increase in staff, all while companies like Ford, Salesforce, Microsoft, Amazon, and Facebook are laying off employees at similar rates. What is Chipotle doing right? How have they approached strategy execution that the others can learn from?
There's no doubt that the pandemic hurt the service industry and some of Chipotle's recent growth can be attributed to economic recovery in the sector. However, they are now exceeding pre-pandemic performance even though federal interest rates are increasing and capital is tightening. This suggests they are outperforming the market despite significant headwinds.
If you've ever visited a Chipotle, it's a busy place behind the counter. The staff is friendly, and there never seem to be idle workers like you see at other chains. These people are clearly on a mission, not just to serve burritos, but to change the game. Chipotle invented fast casual, paving the way for an entirely new genre of restaurants. This "single-piece flow" approach to cooking and preparing food is a game changer that keeps customers flowing in hungry and out with full bellies. Single-piece flow is the most agile approach to doing a job, allowing Chipotle to prepare and serve a high-quality, fresh, and decent variety of food choices at an industrial scale with minimal waste.
Chipotle has shown remarkable strategic discipline coming out of the e-coli outbreak of 2015. They have remained steadfast on a few key objectives:
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Perhaps the e-coli outbreak accelerated them into a digital transformation early, better preparing them for success through the pandemic. The company has remained agile in how it executes this strategy, engaging the entire workforce in driving transformation. In fact, Chipotle is serious about developing and advancing people from within. They offer to pay college tuition and promote 90% of its frontline managers from within. The strategic direction outlined above provides a compass for improvement throughout the company. Goals are then cascaded accordingly so that everyone understands their unique role in helping the organization succeed. Their single-piece flow model for serving customers on the frontlines is a common thread in how strategy gets executed from the C Suite as well.
Being a loyal Chipotle customer, I'm biased in my thinking that they certainly have a bright future ahead of them. For the sake of my budget, lack of time, and appetite, I sure hope so. In the meantime, we have a lot to learn from their success.
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