Monty Moran, co-CEO of Chipotle, talks to Sarah K Asaftei about core values & leadership.
SARAH: Thanks for meeting with me, Monty! I’m in the final stages of authoring a book on values-driven leadership. My premise is that whether you are a celebrity, an individual leader, or a corporation managing your brand reputation – if your internal reality and your external marketing is not governed by the same set of core values, then one of your faces is lying.
MONTY: Yes, exactly, I couldn’t agree more.
SARAH: In the short term it might feel like a good idea to present something that is not real to the world in order to make a quick buck, but in the long-term that will backfire big time.
MONTY: Yeah, I agree.
SARAH: I get a lot of people who say, “Wow, this is amazing, more people need to be thinking this way, but it’s hard to figure out how to follow through.” Other people say, “Yeah, you can’t do that, you can’t be wildly successful in business without cutting corners.”
MONTY: That’s absolute unmitigated horse manure. I don’t know how you can succeed without living the same face both directions. I suppose it might be possible, but I don’t believe it really happens. Not in the long haul. It can’t create a sustainable culture.
SARAH: I’m aware that in 2013 Chipotle outstripped Starbucks and McDonald’s by 9-10%. I know that you and Steve Ells held co-spots at number four on Fortune Magazine’s 2014 Business Person of the Year list. I watched one of your Mad Money interviews when Jim Cramer asked you, “How do you achieve a values-driven corporate culture throughout a large chain with so many locations when you’ve had such explosive rapid growth?” And you said that your employees are taught to look at people and know them. Tell me more about that.
MONTY: We start out by trying to hire the right kind of people for Chipotle, hiring is very important. We hire an extraordinary number of employees – 50, 60, 70 thousand people a year.
SARAH: That’s a big job.
MONTY: Yeah, when we hire we don’t care about experience at all. We’ve always insisted on hiring people with what we call the 13 characteristics, which I came up with, that I do not believe can be taught. By the time you are 10 or 12 years old you either have them or you don’t.
SARAH: Wow!
MONTY: I don’t want to hire people who lack those characteristics and then try to teach them, because it’s an exercise in futility. Once you hire people for character, you have a better chance of getting people who can be sensitive and open and understanding, and caring about the people around them. Before I came, Chipotle hired for experience, which was as often a disadvantage as it was an advantage. It was very hard to break employees of terrible “fast food industry” habits.
Once we hire people, our foundational principle is that each person will be judged and rewarded based on their effectiveness in making the people around themselves better. And that foundational principle drives everything we do in regards to how we compensate, how we promote, who becomes our future leaders, who we exalt, who we hold up as examples of great leaders.
When I started, only 18% to 20% made it from crew to manager. Now, all of our GMs come from crew except for a scarce few. First you hire people who are fantastic, then you operate on this foundational principle, then you start rewarding people based on their effectiveness in making others better. Then you see your younger leaders in the company start trying to help the people around them.
And when they do, you make heroes out of them, you announce it, you promote them. Every single promotion we make in the company of any consequence, we share why they got the promotion. And the reason is always: “this guy makes others better, this lady makes others better, look at what she’s done. She’s took this many crew and turned them into managers. She took that one and turned him into a restaurateur, etc.”
We celebrate the successes of making others better. Once people start to see, “Oh my God, they really do reward you when you make others better… ” what happens is a multifold win.
First, you get lots of people who are being developed.
Second, you get people who start to love each other and realize what it means to care about someone, to devote themselves to someone, to commit and empower somebody.