Leaders of turnarounds often succeed by putting the fundamentals on the table and insisting upon a greater emphasis on the basics.
The turnaround that CEO Brian Niccol has cooked up at Chipotle Mexican Grill [CMG] makes a great case study of the back-to-the-basics approach to management.
The Basics Often Get Lost in a Speedy World
To set the context, here’s a concise history of Chipotle: founded in 1993 by chef Steve Ells, Chipotle found great success in marketing its near-local sourcing of fresher ingredients, using naturally-raised proteins, and on-premises cooking.
Chipotle grew swiftly and established itself as the flag-bearer of the fast-casual trend that spurned fast-food orthodoxy. McDonald’s was a major investor from 1998 until 2006 when Chipotle went public.
In 2015, Chipotle’s star began to fade away when hundreds of its customers got sick from infections with salmonella, E. coli, and norovirus. Worried that this short-term rough patch can turn into a long-term downward slide, the company’s board recruited Niccol from Yum Brands’s Taco Bell division in 2018.
CEO Brian Niccol made Chipotle Fresh Again by Focusing on the Basics
In two short years as CEO, Niccol has returned Chipotle to industry-leading performance and positioned the company for above-industry growth. His Barron’s ‘Streetwise’ interview with the inimitable Jack Hough provides an insight into how strategic business leaders think and make decisions:
When I arrived at Chipotle, I discovered that it was a company full of ideas; it lacked discipline and the focus to figure out the few things we wanted to do really well. Chipotle had lost focus on executing the basics of running a great restaurant.
We modernized food safety practices and emphasized avoiding contamination and educating food suppliers and farmers.
We went back to following the original culinary on how to make great food: getting the right char on the chicken, the right amount of lemon, and the right amount of chopped jalapenos.
Idea for Impact: Getting the basics right is often the first essential step to building a greater organization.
So many companies fail on their fundamentals—and don’t even realize it—especially when their businesses have grown, market conditions have changed, and the companies have taken on all sorts of complexities that have stumbled.
If you want your organization to pull through a slump or hit a new growth trajectory, consider cracking down on the basics.
Focus on your core values and your underlying business model, which are like beacons that can help steer you on the right track. Inquire why your organization exists. How should you operate? What is your market position? What matters to the organization’s mission and vision? Focus on doing the right thing—and doing it consistently over time.
A renewed emphasis on the strategic basics will put your company in the best possible position to navigate new strategic choices, as Niccol’s Chipotle has done.