Fired up this morning, and to that end I have some helpful advice for incoming Chipotle (CMG) CEO Brian Niccol.
CLEAN HOUSE in the executive ranks, and do it quickly. This comes from someone who has obsessively followed Chipotle for years, first as an analyst and then as a reporter.
This house cleaning should start with Chipotle's controversial marketing executive Mark Crumpacker. Crumpacker is Steve Ells' boy, and has failed at reviving the brand after the E.Coli crisis. He has been allowed to stay too long given his mixed performance and deserves a good part of the blame for Chipotle's margin downtrend.
After giving Crumpacker his pink slip, Niccol should consider cleaning house in the communications department. Chipotle always had an air of arrogance when times were good, that's not a good message to be communicating. Because when times get bad (as they did at Chipotle), it sets up the company for all sorts of attacks (Wall Street, media, etc.).
The company has continued to have that arrogance straight through its post E.Coli outbreak period. Instead of humbling up like an Under Armour (UAA) after a tough time, Chipotle still thinks it's the only fast-food player on the planet. Moreover, Chipotle's crisis management communications during the E.Coli outbreak were terrible -- it never regained the narrative, it was as if the company was operating on a different planet.
Having talked with Niccol on several occasions while he was at Yum! Brands (YUM) , there is no doubt he will move quickly to put his stamp on the company. That means bringing in top flight people throughout the company that know the ins and outs of running a fast-food restaurant, everything from managing a supply chain to communications with media and analysts.
Niccol is a winner, and if he moves quickly to address Chipotle's glaring issues there is no doubt he will win at his new employer as well. For the first time in a while, Chipotle's investors (that includes Chipotle fan Bill Ackman) have a reason to be optimistic.
We will be talking about the CEO change at Chipotle today on Morning Jolt. Here's what we are normally up to.