When Brian Niccol, ’03, took the reins at Chipotle in 2018 from founder Steve Ells, he brought with him a stellar industry reputation from his time at Yum! Brands, including a stint as CEO of Taco Bell, and senior posts at Procter & Gamble Co. He quickly delighted fans, pulling off a remarkable turnaround of the beleaguered brand through new, innovative ideas in its 2,500-plus stores. For one, Niccol turned off-premises ordering into a reality through new digital offerings, increasing revenue roughly $500 million in one year. “It’s a dramatic change,” said Niccol. Investors are taking notice, with the company’s stock growing by 40 percent in 2018 and hitting an all-time high this August.
Niccol recently sat down with Chicago Booth Magazine—on National Avocado Day, no less—to discuss the chain’s next chapter. “I don’t set aside time on my calendar to be creative,” he said. “Once you understand your business, that’s how you are able to brainstorm and be creative.”
It’s time to reshape fast casual. In the restaurant industry, you are seeing a big change in where and how people want to access their restaurant experience. We’ve provided customers with the ability to do that in different ways. The more you can make your brand more accessible without compromising the culinary experience and ingredients, the better. The biggest example is that we’ve created a digital sales system. Two years ago, it made up less than 5 percent of our business; today it’s over 18 percent. Even in the last quarter, digital ordering brought in $262 million of revenue, which is more than that entire business did in all of 2016.
We’re giving diners a thought-out experience. When people order through the app, they can walk into the restaurant and grab and go, or get delivery. We put in a separate digital makeline so our team members can handle all of the orders coming in off premises. We don’t want those ordering via digital to affect the restaurant service line.
You’re better off making a decision and having the courage to say afterward that the decision did or did not work. Making a yes or no decision is very powerful, and the sooner you can get to it, the better. Decisiveness is so important in today’s world. But you’ve got to be willing to take the feedback that comes as a result.
I love spending time with the people I work with. They all have experiences that I don’t have, which results in creative conversations and brainstorming. It’s a culture that I want to instill. Ideas are ultimately what will propel the company forward. The people I interact with share my passion for growing the company. We always think, “What can we do better than what we did yesterday?”
Raising food with integrity is the future of food. . . . I want us to be known for cultivating a better world.
I think about the “hallway” test. I’ve hired the wrong person if I see him or her coming down the hallway and I try to avoid that person—that’s not the type of hallways we want. We want people walking past to stop and say, “Hey, I was thinking about something.”
Fostering deep understanding is key. While at Booth, we always used the data and analytics to generate a deep understanding and to inform the conversation and the debate, as opposed to the other way around. Sometimes, people try to have a debate without understanding the facts and they end up not listening. My classmates had the courage to listen, process, and either agree or disagree with the issue at hand.
Corporations are only as good as the people within them, which is a thing people forget about. My classes were great because of my classmates and the person leading the class—not the material in the book. In a private equity course with Steve Kaplan, [the Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance,] we emphasized the importance of cash flow, which I still remember today. But he said, let’s make sure we understand the facts and let’s debate what the facts are saying. Only then can you synthesize—and that gets you to the right result. Our deep understanding of the topic made a learning environment where people were excited about what’s next. It’s the same here.
You have to focus on your employees. It’s about recognizing great talent and then putting together a team and a culture that gets the most out of that talent. My wife, Jennifer, was a schoolteacher before we had kids, and students that she once taught still reach out to her today because she cared. If you care about your employees, it separates the average organizations from the really great organizations.
Raising food with integrity is the future of food. I’ve got three younger kids and they are well aware of practices going on in the industry, much more so than I was when I was in my teenage years. They are choosing places to eat based on what they believe are the right ingredients and the right approach to sustainability. Whenever we open a Chipotle, we are going to do the right thing; whether it be investing in the employees or investing in the local communities. I want us to be known for cultivating a better world.
Spending time with my wife and our three kids is one of the things I really enjoy. Jennifer and I both enjoy debating a lot of the current issues. What I love about it is that it has nothing to do with my day-to-day and it gets me thinking differently. I’m at my best when I find time to go to dinner with my wife and get to a dance recital or a baseball game.