Do you notice the culture of a business that typically stands out as a top performer to you? We certainly do, as we like to learn from unique cultures as Picasso says. Chipotle culture and employee engagement are some of the best we believe.
A culture that is built on top of the line leadership and employee engagement.
Corporate culture is a very integral part of the business as the company prides itself on its wholesome natural ingredients, community stewardship, and an exciting workplace.
This culture is passed on to customers, who are more likely to go out of their way to stop at Chipotle instead of a competitor.
For decades, the dominant view of the strategy was based on Michael Porter’s ideas about competitive advantage. In essence, he argued that the key to long-term success was to dominate the value chain by maximizing bargaining power among suppliers, customers, new market entrants, and substitute goods.
Yet digital technology blew apart old assumptions. As technology cycles began to outpace planning cycles, traditional firms were often outfoxed by smaller competitors that were faster and more agile. Risk-averse corporate cultures needed to learn how to “fail fast” or simply couldn’t compete.
In Marcus Buckingham’s book, “First Break All the Rules,” he suggests people need specific positive feedback on their job performance AT LEAST every seven days. Are you doing this with your direct reports? If not, their fire may be dying. Catch them doing something good.
Some managers believe people shouldn’t be praised because they are paid to perform. Other managers know people perform better when they are praised. The former managers rarely create anything great, leaving a wake of resentful employees in their path.
Here is the story of Chipotle and a short video on their hiring.
Why do you ask? Because of the values they share with the company. You even see the culture in most of their creative marketing. That is where we first noticed this brisk business.
Related post: Adaptation … 5 Awesome Business Examples for Study
But what about culture and employee engagement at Chipotle? When choosing to learn from others about great company culture and employee engagement strategies, it is always helpful to choose one of the top dogs in the field.
Meet Chipotles. They have been successfully executing their company culture and employee engagement strategy since the early days of the enterprise. For almost ten years, their policies have played a significant role in their growth.
An introduction to Chipotle is probably unnecessary. With more than 1600 retail locations in the United States, the restaurant is the picture of success. Since its IPO in 2006, Chipotle’s growth has been exceptional.
Sales have increased from $826 million that year to $3.2 billion last year. And the company had a 9.3% growth in comparable-store sales last quarter, which is remarkable for a 21-year-old company.
In our opinion, the company has inserted itself into the American restaurant landscape as quickly and craftily as any non-franchise restaurant in U.S. history. It has forever changed the way companies engage their employees in building a culture.
In 2005, the US Company underwent a transformation that would make its culture as distinct as its food. As stores opened across the US, the company focused on creating a system where promoting managers from within would create a feedback loop of better, more motivated, and more engaged, employees.
That year, about 20% of the company’s managers had been promoted from within. In recent years, nearly 85% of salaried managers and 96% of hourly managers were the result of internal promotions. (Source: Chipotle)
Fundamental to this transformation is something Chipotle calls the restaurateur program, which allows hourly crew members to become managers earning well over $100,000 a year.
Restaurateurs are chosen from the ranks of general managers for their skill at managing their restaurant and, especially, their staff.
When selected, they get a one-time bonus and stock options. And after that, they receive an extra $10,000 each time they train a crew member to become a general manager.
The foundation of their culture is the concept that each person at Chipotle will be rewarded based on their ability to make the people around them better. Now that is a different way to build a culture, isn’t it?
Here are the further detailed reasons we feel their culture has been so successful:
Chipotle culture … emphasis on people
One of the simple basis for the Chipotle’s success in their learning strategy is people. It starts at the top and trickles down.
It takes root when you create a culture where people can grow and be whatever they desire to be. You can’t create a brand that people love until you build a company your people love.
And once that happens, you’re going to create a culture of heroes.
Culture and employee engagement … promote from within
Chipotle has implemented a “hire from within” campaign that has allowed them to promote line employees to be store managers for the new locations.
This results in lower training costs and improves morale, engagement, and productivity on the line.
Pride in quality
They maintain and drive high standards and expectations around food quality, customer service, food safety, and store cleanliness. How?
By empowering teams in every restaurant to be accountable and take action without waiting for permission.
Process for hiring and evaluating employees
Chipotle employs employees by looking for 13 essential characteristics. With hires with these characteristics, with the right development, will make them a top performer.
Employees who cannot become top performers don’t last long. Employees either get it or they don’t.
Performance based advancement
The company believes that creating a performance-based culture leads to the best restaurant experience possible for both employees and customers.
Chipotle embraces its employees’ unique perspectives, personalities, and strengths. It believes these factors are the most significant to the brand’s success.
Chipotle has a well-defined and transparent advancement structure that encourages loyalty from employees.
On the flip side of this strategy, one of their biggest competitors, Taco Bell and parent Yum! Brands rely heavily on franchised operations. Such operations, we believe, intrinsically hinder advancement. About 86% of Yum’s employees are part-time.
And while there is a small opportunity for advancement, promotions are limited to store-specific management. Employee development isn’t something that Yum! prioritizes. As such, the large fast-food risks-high turnover and employee dissatisfaction.
Career development
From day one, Chipotle employees learn that if they do a good job and represent the brand well, they can move up.
They can go from a modest hourly wage on the front lines to running the kitchen or running the front of the shop, to assisting the manager, to running a restaurant, to becoming a manager of multiple locations.
In other words, you can go from minimum wage to six figures and a company car. This can happen for anyone who wants it and can handle it. It’s up to the employee.
Culture and engagement strategy … keep customers happy
Chipotle has a unique corporate culture that’s continually reinforced at the local level: Serve good food, fresh and fast.
Chipotle locally sources its vegetables and meats, which means you’ll never see a freezer there.
Keep the place clean and efficient. Pay attention to details. Stay involved in the community. Keep customers happy.
Have long term goals
Chipotle doesn’t want to just serve great food. It intends to change the way people think about and eat fast food. Each local store supports a local farm.
Simply by the way it operates, the company encourages consumers to set higher expectations for what they can expect in a quick-service restaurant.
Team versus individual success
They desire for employees to understand that their success is based on the success of their teams. They want them to aspire to make the people around them better than they are.
I’ve written numerous blog posts about the value of customer-facing employees, employee engagement, and employee empowerment. And I believe the Chipotle culture and employee engagement strategies are one of the best around.
The bottom line
Having the right culture and employee engagement practices are driven by understanding the most significant motivators to a company’s employees. Committing to an intentional culture like Chipotle, one that’s open, transparent, and enables employees to thrive is a very smart investment.
Your employees are your business. The better they are, the better your business.
Chipotle gets it and as a result, is winning the war of employee engagement and its resulting business performance.
