How Chipotle’s CEO Is Working to Give Every Single Employee Opportunity For Growth
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As chief executive of Chipotle Mexican Grill, Brian Niccol likes to schedule time on his packed calendar to visit the company’s restaurants and see people enjoying the food.
“I see some of these burritos and bowls that people build and I’m like, that is enormous,” he laughs.
Niccol has led Chipotle since March of 2018, and in that time, the “fast-casual” restaurant chain has grown from 2,441 locations to nearly 3,000. The company’s stock has soared 443%, compared with the S&P 500’s 73% rise over the same period. Chipotle also more than doubled its annual income between 2018-2025 to $355.8 million. Oddly enough, Chipotle isn’t Niccol’s first stint at a Mexican themed restaurant. Prior to joining Chipotle, he was Taco Bell’s CEO, after serving in a number of executive roles there.
Despite Chipotle’s upward trajectory under his leadership, Niccol’s tenure as chief executive hasn’t been without its challenges, especially during 2021. Chipotle is not alone in finding it difficult to retain and hire workers in today’s competitive labor market. Chipotle New York employees staged an October strike in protest against their working conditions. The demonstration coincided perfectly with the organized This fall, walkouts at companies including American Airlines, General Electric, John Deere, Kellogg’s, McDonald’s, and Netflix.
Niccol stated in an October earnings call to investors that there are many Chipotle locations. “missing sales” because they’re not fully staffed. They have increased their wages, boosted their benefits, and stated they would increase the focus on talent development and helping employees learn the skills needed to get promoted. Chipotle increased its prices to cover the rising costs of food and labor.
Niccol spoke to TIME in late November about hiring and retention, sustainability and one coming addition to Chipotle’s menu that really excites him.
(This interview has been edited to be more concise.
The pandemic has been a brutal time for the restaurant business, and Chipotle has had to confront a lot of major issues that we’ve seen elsewhere in the economy, like hiring challenges, rising prices, and workers quitting and striking over higher wages, more flexible hours and better treatment. Customers who can be rude and on edge are another problem. From where are you sitting? What are your thoughts?
Yeah, there’s a lot going on right now. And there’s probably more stress or anxiety out in the marketplace than you’ve seen in the past which compounds all those things you just talked about. So the approach that we’ve taken is a simple one: We want to make decisions for our people and for our company that are consistent with our purpose and values. I’ve found that’s worked in good times and tough times. And we’re willing to learn and grow and we’ll take the feedback accordingly. From the pandemic to the tight labor market to the challenging supply chain situation we’re in, we’ve just really relied on clearly communicating the decisions and making sure that those decisions were made consistent with our culture, which is really grounded in values and purpose.
What’s the shorthand version of that? What are Chipotle’s values and purpose?
We are committed to creating a better world. Then we achieve this through the ability to source high-quality, ethically prepared food. And what’s behind that is the idea of doing the right thing for our people. We’re doing the right thing for our customers, and we’re doing the right thing for the planet. That’s shorthand, but when we communicate it consistently that way, it’s a simple thing. If you take this approach, people will see that your decision was rooted in company culture and purpose. I think they’re comfortable with us sometimes saying, look, we got it 80%, right. But there’s 20% we have to tweak. And I’m very transparent with that. And one thing the pandemic’s taught me is… I thought we were communicating a lot before the pandemic. Now we’re really, I think communicating at a much better clip all the way down to every single restaurant.
What are your ways of communicating with others now?
It’s the frequency of it. The good news is we’ve got all this technology that allows us to bring together all of our restaurant managers and above on a video conference or a phone conference. And we allow for Q&A in all those sessions. It was something we did once to twice per year. Now we’re doing it monthly. After the COVID pandemic, [our core team was]Meeting twice per day and communicating the next day. So it was like, we’d make decisions in the morning. We’d evaluate those decisions by the end of the day, if we needed a course correct, or new information came in, we’d make new decisions and then communicate in the morning.
What about right now? Is it still possible to meet so often?
Now, things aren’t changing that fast anymore. These areas are still critical for supply chain staffing. [new]Different operating rules have been established for COVID regulations, COVID spikes and pullbacks.
It’s a tough job market for employers. Is it possible to keep employees employed?
We’re always trying to figure out how we can ensure that we’re developing our people correctly and rewarding them correctly, both in compensation and additional benefits. The growth of the company is one of the most important factors that keeps people in our company. You can join our organization as a crew member and in short order—I think it’s in short order anyway, two to three years—you find yourself as a restaurant manager. In five to seven years, a multi-unit leader, meaning you’re overseeing six to eight restaurants. And that’s a big job if you want to stop and think about it. It’s like each of our restaurants are doing two and a half million dollars [in average annual sales]. You get eight of those, it’s a $15, $20 million business. There’s 30 to 35 employees per restaurant. So you’ve got 250 employees. That’s significant.
One of our biggest retention tools is the fact that we’re building over 200 restaurants a year. Opportunities are a great retention tool. Another benefit is that we offer debt-free degrees, benefits for mental health, English as an additional language and other services, which are available not only to you but also your extended families. We can accomplish more when we are bigger. And most recently we’ve been really public about how we’re helping the local farm, the small family farm. This makes people more dedicated. It makes people proud to eat the foods we make. There’s also the emissions-based targets that we just put out there to reduce the scope one, two and three greenhouse gas emissions. This is important to young people. Many of our staff are young. They’re in their 20s.
How do you make sure you’re holding on to people who might be potential store managers and more—because it’s tough for all businesses right now?
It is hard. Each quarter, I do an exercise that involves checking in on the staff who are working directly under me. It’s called a “four-by-four” restaurant. It’s really just asking: “What are the four things you’re focused on for the business?” “What are the four things we’re focused on in developing you?” It’s a powerful tool because you take accountability then in saying how you want to grow. Your manager then is responsible to help you grow, and then you’re also crystal clear on your accountabilities on performance, because I think those things have to go hand in hand. This is something I’ve seen over and over. Success is what people want. People like winning. They like to know that they’ve accomplished the objective. I’ve found people really are energized when they know what results they’re accountable for. You can clearly see how they impact those results. And then they get to discuss how they’re doing against it. It’s a powerful exercise.
Clearly, it’s important that Chipotle remains a fast growing company. You also have many competitors adding to your menu and improving the overall dining experience. How do you deal with competition pressures?
Look, if we give a great experience for employees and we give a great experience for our customers, centered on what we do uniquely, which is food with integrity, great culinary, high customization, we’ll keep winning. There aren’t many places where you can go for less than $10 and get the food that we provide. Meaning, it’s clean in our opinion, raised the right way and then prepared with classic culinary techniques so that you get a delicious experience. And the speed at which we do it, the customization at which we do it and then the price at which we provide it, that’s our offense and that’s our best defense. That’s what we stay after. It’s like, I want every person when they have their experience at Chipotle to be like, “God, the guac is just so good.”
You have mentioned that many of your employees are young. Others have noted recently that many young employees expect their bosses to be open and vocal on political and social issues. Is your company feeling this kind of pressure? What issues have Chipotle taken a stand against?
Yeah. The expectations I’ve heard from our folks—and I think it’s the right expectation—is they expect us to have a point of view on food. Our employees expect us to share a view about people development and the inclusion aspect that everyone has a chance at success in our company. It is the things I find that our employees love and are open to being authentic with that they can have an effect on. And so that’s where we spend our time. I think we’re a leader on the climate discussion. I think we’re a leader on the idea of doing the right thing for farming around regenerative farming. I think we’re a leader on doing the right thing for the food supply chain. I think we’re a leader on frankly inclusion and the diverse nature of our workforce.
What is the secret?
I say this to everybody: There aren’t many companies where you can show up and potentially have just a high school degree or still in process of a high school degree and we will support you to get the next capability that you need whether that is some vocation, community college, traditional college, whatever learning you want to enable you to move further along in our company. The good news is if you are passionate about our purpose and you love the idea of the restaurant business and of the culinary experiences that come with it, we can put you on a path to hopefully build your capabilities to match your ambition and that’s where we spend our time.
Can you talk a little bit more about the environmental and farming work that you’re doing around sustainability and emissions reduction?
We buy 20-30 million pounds worth of organic local produce from the farmer side. The reason why that’s important? We must grow that each year to earn our bonuses. We must make progress with this organic food chain to receive a portion of our bonus. And I think it’s critical that we do it.
One of the biggest things that we do for the small farmer is we give them multi-year contracts so they know that if they create the field to be organic for use growing, let’s say, cilantro, they know they have got a big buyer for years to come. They don’t want to turn a field to be organic cilantro only to find out, now what do I do with this organic cilantro? It’s a big risk for them. These multi-year agreements are for animals. We do the exact same with produce as we do for vegetables. We will offer you a long-term contract if you keep the animals healthy and follow humane methods. That’s really powerful for a young farmer—meaning they’re new to the industry. It’s also powerful for a farm that’s thinking about generationally transferring the farm.
We support also the National Young Farmers Coalition. I think we’ve committed over $5 million to them recently. We do grants. If somebody wants to start a hog farm and they need a sow, and they may not have the ability to get the money to get the sow, that’s where we can support them accordingly and get them started. Some of the educational programs many of these people take to be successful farmers are supported by us. And I can’t remember, there’s a bunch of degrees that we do as debt-free that are in the agriculture space, so we really try. The goal here is if we say it’s important, then we need to demonstrate that it’s important.
Chipotle pledged recently to lower carbon emissions by 50 percent by 2030. And that’s not only in the restaurants, but also across the supply chain. Is that possible?
This is obviously like working all the way back with ranchers on whether there’s a better way to raise cattle. Are there better ways to transport and harvest produce? Are distribution centers more accessible to farmers? The supply chain can do a lot. Is there a way to give energy to restaurants in different ways? And one of things I love about our company is we’ve always been experimenting. To see if wind power could be used to provide electricity for our restaurant, we built a windmill that we mounted on top of the building. It didn’t work.
However, someone was willing to give it a try.
To see what we could do. It’s easy to say, we’re going to experiment, learn, and frankly be better. I found, if you don’t make a target, you don’t achieve the target. So that’s why we put it out there. We can’t just say, we’re going to be better. We got to have a target for how much better we’re going to be.
Is your company working towards these objectives?
Also, the bonus structure includes climate-based goals. Like the food that I mentioned. And then the third thing that’s part of it is equity and pay as well as ensuring that we’ve got an inclusive yield, meaning everybody is growing in our organization. From manager to field leader, to TD and back again. As we progress up the ranks, we want the chart to reflect our diversity. These are all of them. Our bonus is tied to people, climate, and food.
What are your goals for diversity?
We operate everywhere around the country and the diversity of our work force represents usually the region that we’re in. So we are committed to ensuring that our workforce continues to grow in diversity. So if you add field leaders, team directors, executive team directors, we want that to continue to be representative of the part of the region that we’re operating in. We also monitor this.
Lately, many American workers have been asking for—and getting—raises. What’s been Chipotle’s experience with that over the last year or so?
We’ve always been a leader in compensation, especially at the entry level spot, so we took a look back in, I guess it was like March, April and the [labor]The market was extremely tight. We weren’t getting the hires that we wanted to get. We said that benefits were great and the potential for growth was great. You know what’s more? They’ve got to have the right wage to get them started. We raised our hourly average to $15 for both the company as well as the start-up job. It’s something frankly, that we used to look at on a six month cycle and now we’re looking at it on a week to week basis, market by market, because in this inflationary environment, you’ve got to recognize what you’re dealing with. It’s a blessing that we can adjust the price to match our needs if necessary. Whether that’s wages or buying produce.
Are there places where you’ve had to look at bringing the starting wages up beyond $15 per hour?
Yes, that’s what we do. In some parts of the country, the starting wage is $18, $19 per hour.
Are there practices that you’ve put in place during the pandemic that you think you’ll keep around, because it just makes more sense and works really well?
Yeah. I would say the thing that we’ll probably keep in place is the monthly communication. I hope the market’ll be a little bit more stable where we’re not having to look at so many elements from wages to the cost of chicken on a two to four week basis. But I definitely think one thing I’ve learned is that as a company that’s growing as fast as we are, we can’t communicate enough. And we won’t be doing obviously the twice a day conversations, but this monthly cadence of connecting with all of our restaurant general managers is something that we’re going to stay with. It’s simple. It’s not working because we’re in a pandemic, it works because it’s a good practice. It’s a really good practice.
How are these meetings? Like, you’re all on one big Zoom and people are chiming in asking questions?
It’s like a time block. We usually have 20 to 35 minutes where we’re speaking. And then we leave the rest of the time for Q&A. Some of it is live and others are… we allow people sending questions ahead of time too. And I’ll tell you, I think the last 20 or 30 minutes where you have the dialogue on the questions at hand is the most valuable piece of this.
It seems like you can really get a feel for what’s happening on a local level that way.
Totally. I’d like to try and get out every week and get to a certain part of the country to go visit a couple restaurants. But it’s just that. It’s a couple restaurants, and we have 3,000 restaurants versus I have all these folks on the phone or on [video-conference]. What you will find is that one person said it, and a lot of other chat participants replied, “Yeah, me too.” You too. And then you’re like, OK, we do have something here to address. This dialogue is valuable.
We’re almost at the end of 2021 and I’m wondering if you have any predictions for the coming year. Your thoughts on 2022 are you expressing right now
I believe there’s going to be opportunities that we’re not aware of yet. I think there’s going to be more tailwind than headwind in ’22. And I believe our company’s positioned really well to take advantage of it for the benefit of our employees and our customers. There’s a lot of challenges that we’re going to be dealing with, but I’m optimistic we’re going to get through it and I think we’ve demonstrated just how resilient our company is and just how resilient our people are.
On the topic of food, do you have anything new coming to Chipotle’s menu in 2022 that we should be on the lookout for?
I’ll tell you, we’ve got this plant-based chorizo that we just finished testing. We haven’t nailed down when we’ll launch it nationally, but it performed well in tests. If you’re a queso con carne person, put some of this plant-based chorizo into that queso. Man, it’s amazing.