The most stunning executive move of the year may turn out to be the best executive move of the year. I am talking about the appointment of Brian Niccol, who ran the Empire of Taco Bell, going to be CEO of the Federation of Chipotle Mexican Grill (CMG) .
There were plenty of reasons to doubt the move -- 80 to be exact, the 80 chemical ingredients that Chipotle made fun of that Taco Bell put in its burritos, many of them not-pronounceable, versus the eight-odd ingredients in a Chipotle burrito.
But what a difference a year makes. In the first annual overlap of Niccol's tenure, the company just put up 9.9% comparable-store sales, truly incredible given the huge downturn just a few years ago owing to food-borne illnesses in several parts of the country, as well as a perceived decline in quality, cleanliness and time to market.
That's all in the rearview mirror. Niccol's playing offense now and the stock price is close to an all-time high set four years ago, before the debacle.
How did he engineer the turn?
Sometimes I question why the best of the best lay out their blueprint, but Niccol must be so confident that he can't be copied that he just lays it out at the top of the quarterly conference call.
Blueprint for Success
He listed seven different elements in his blueprint for success. I am going to take some liberty and amalgamate the seven with some commentary from the rest of the call to make it so it becomes the clinic for retail success, not just for a successful turnaround.
First, Niccol made sure the company stayed culturally relevant. I know this sounds soporific, but I think it was necessary given the cultural clash of the CEO of the real enemy of the ethos of Chipotle coming to revitalize the very company that was most critical of his own.
Second, he had to increase brand engagement and visibility. Here, he started some very bold campaigns more in keeping with the country while keeping the purity of the food and the message. Total tightrope-walking -- not easily duplicated.
Third, he had to digitize and modernize. The former was the key to so many things: orders ahead, delivery, catering, second line for digital orders, mobile order and pick-up and a rewards program. This collection is how you get to 15% of your sales in digital. Modernize had to do with making the stores look better, something crucial in the wake of the food-borne illness memories.
Fourth, great hospitality: I think hospitality comes from loyalty within and loyalty without -- and here he's very early in the program, with only 3 million loyalty members. Once he's got more people and more data, there will be greater hospitality.
Five is throughput. During the heyday of Chipotle, the real bugaboo had always been throughput, industry speak for "how long it takes to get customers in and out." The shorter, the happier. Digitizing and second lines both delivered on this front.
Six, enhancing the powerful economic model. This is a simple enough precept, but what Niccol did was return the company to immense profitability per store unit by offering great bargains to get you in and then discovering what is new, different and better.
Finally, seven -- accountability and creativity. Anyone who followed the incredibly cool, Millennial and Gen X campaigns that Niccol ran at Taco Bell knows that the second, creativity, just runs in his blood. But the first? He's using social uptake, up 400%, and digital impressions, up 300%, as measurements.
Of all of these, the most impressive for me -- as someone who owns a small plate Mexican restaurant, Bar San Miguel, in Brooklyn -- is the pick-up. Right now, when a delivery person comes in to my restaurant they hang out, we try to figure out which delivery is theirs and the time to customer is too long. Chipotle's got clearly-demarcated shelving to make delivery go so much faster -- allowing Niccol to say the food travels well. Remember, that's 100% offense, and it is one of the secret sauces, but the most obvious one, that he's put in.
When you are humming like Chipotle is, you are producing better food at lower cost with better productivity, hence better, more lucrative, same-store sales. Chipotle's back, and what can I say? Thanks to Brian Niccol, and to the company's stalwart CFO, Jack Hartung, it's better than ever.