I was looking through some of my old papers and ran across an intriguing topic from 2015. It talks about how Chipotle had a unique method of promoting talent within the company and the first E. coli outbreak, which hurt the company for many years.
It’s good to take a look back and see what was happening in the world, even though it wasn’t that long ago. It’s like cracking open an old diary and looking back to how your life was then compared to now.
Your perceptions change over time, and now we have a roadmap of how things worked out in the end. Chipotle’s talent management program, from what I could find, was still in place, and the E. coli problem only grew bigger over time, causing the restaurant to change its logistics program for sourcing ingredients.
Even though this is an older paper, there are still some useful nuggets of information that pertains in today’s work environment. Now, let us sit back and wander down the road in 2015.
Talent Management
Chipotle has its unique way of retaining their talent within its restaurants across the country. Unlike many fast-food chains, there is a high employee turnover rate, and that can be denoted from the minimum wage pay as well as the fast-paced, high-stress environment that some fast-food restaurants experience. There are also fewer opportunities for growth within a fast food chain restaurant. This is where Chipotle has changed the game on their Talent Management acquisitions. As Max Nisen mentioned, a Bloomberg Opinion columnist, “Compared to most fast-food chains, Chipotle favors human skills over rules, robots, and timers. Every employee can work in the kitchen and is expected to adjust the guacamole recipe if a crate of jalapeños is particularly hot.” This is showing that Chipotle wants to develop their employees and make them feel valued as individuals, not to mention it encourages the employees to take the initiative when needed. Nisen also stated in his article, “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 their staff. When selected, they get a one-time bonus and stock options. After that, they receive an extra $10,000 each time; they train a crew member to become a general manager”. This is a brilliant tactic that Chipotle has put into practice. It allows lower-level employees to work their way up to General Manager level that pays very well. This also encourages the GMs to train their lower-level employees to the best of their abilities, so one day, they too might become a general manager at a Chipotle restaurant.
By establishing the restaurateur program within the company, Chipotle is then retaining their previous talent and improving their skills throughout this program. The company is offering significant incentives for managers to properly train and educate other crewmembers. Not only does this employee retention keep employee turnover down, but it also keeps the variable costs low. Every time an employee either quits or is let go and needs to be replaced, it costs the company money. This money goes into training the new employee, and that training alone will have other variable costs associated with it. Chief Executive Magazine states that “Regarding the war on talent, if it was ever gone, it’s back, Susan Marks, CEO of Cielo, a global talent management and acquisition provider based in Milwaukee told Chief Executive last year. Companies are starting to find that they’ve got to work harder than they’ve ever had to in this area”. By having more and more companies coming up with creative ways to retain their current talent, it is starting to benefit the employee just as much as it is helping the company to invest in their workers. By showing that the company has a genuine interest in bettering its employees, it will then reflect in the employee’s work, and they will show pride in working for that company.
When it comes to the top three ways to retain talent, Chief Executive Magazine sheds some light on the topic.
1. Enlist and empower managers. Don’t just leave it to HR
2. Focus on developing clear career paths for your employees
3. Take a holistic approach to talent management across the entire employee population.
By having other departments besides HR involved in the hiring process, it will allow these other employees to put their two-cents in when it comes to advising a manager on who would be a good fit for a new employee. These current employees are, for the most part working well together and mesh personality-wise, which is essential when working in such close quarters to one another behind a food counter. HR is not in the day-to-day working environment that is the Chipotle restaurant; they are determining who they think would be a good fit to join the team off of different qualities and experiences that future employee possesses. These qualities may look great on paper, but are those qualities needed in one store more than the other? This is where HR has its downfall when hiring these workers. Another topic that is addressed was developing a career path for these employees. This will allow them to achieve goals that they can create as well as have some established by management for them. The last topic that was mentioned was to take a holistic approach to talent management across the entire employee population. This ties into creating different goals for these employees to obtain, and since each employee has their strengths/weaknesses, customizing these goals to improve those strengths/weaknesses is vital.
Product Stewardship
“You have to hand it to Chipotle. The idea that high quality, affordable product plus ethical business practice equals immense success shouldn’t be revolutionary, but it is, and Chipotle’s riding high on that little equation,” (Greco, 2013). This statement held true back in 2013. Fast-forward to 2015 and Chipotle had an outbreak of contaminated food items such as their beef and chicken that were plagued with foodborne illnesses such as E. Coli and Salmonella. Before that recent outbreak, Chipotle was known for its fresh ingredients prepared daily. Chipotle was providing its customers with high-quality ingredients that won’t cost the consumer an arm and a leg to buy. The market was willing to pay upwards of $7 for a burrito that could easily be considered two meals or at least one and a half depending upon the individual. Chipotle prided them on making sure their ingredients were all-natural and raised without growth hormones, and at that time, consumers loved that concept and helped build Chipotles brand and increase its reputation. Amanda Radke speaks about the marketing side for Chipotle and states, “It appears Chipotle is going to have a hard time marketing its way out of this disaster. The company is well-known for its slogans promising responsibly raised meats and produce. Along with commonly uses phrases such as we source from farms rather than factories, and with every burrito, we roll or every bowl we fill, we’re working hard to cultivate a better world”. This outbreak has tarnished Chipotle’s reputation at the moment, and the company is looking for ways to bounce back. “This idealist marketing campaign has appealed to many consumers chasing the most recent food fads, all while instilling fear in the 95% of folks who just want to enjoy a good burrito, but are now questioning whether conventionally-raised meat and produce is safe,” (Radke, 2015).
Chipotle never use to do any marketing campaigns, such as special offers received via text message/email. They didn’t have any rewards program set into place until recently. This was because Chipotle was a force to be reckoned with, and their most extensive form of advertising was by word of mouth as well as excellent market research. Unlike other fast-food Mexican restaurants such as Taco Bell, Chipotle was also promoting their healthier/ higher quality food compared to Taco Bell’s “mystery meat,” processed cheese, and other dubious ingredients. Chipotle was a new form of fast Mexican food, that wouldn’t make you feel horrible after eating it. The company was revolutionizing the Mexican fast-food restaurant chain.
Chipotle is now trying to fight their way back to the top again by promoting better food safety practices in every store across the country. The company seems to be getting back to their roots and start to establish their ground and to try to gain back market share in the Mexican fast-food market. However, the company is now beginning to roll out incentive programs for its restaurants that will entice customers to come back and eat their food once more. This is a classic way companies try and improve their image as well as try and increase their revenue again. Due to the food born illness outbreak, not only did Chipotles profits decrease but also the company’s brand was tarnished. By making sure food items are kept within specific temperatures, and within their use date, Chipotle is starting to become stricter on their guidelines when it comes to food safety. It will take time and money for Chipotle to regain their previous place in the market, but if done properly, it will be completed, and Chipotles once again could be riding high.
If you found this article interesting, please let me know, and if not, well, it cost you about five minutes of your life. Live, learn, and don’t make some mistakes over and over again like Chipotle and the E. coli problem.
References
CheifExecutiveMagazine.com. (2014, August 24). Chipotle’s Strategy for Addressing the Talent Shortage ChiefExecutive.net | Chief Executive magazine. Retrieved from http://chiefexecutive.net/chipotles-strategy-for-addressing-the-talent-shortgage/
Greco, D. (2013, September 20). Chipotle, Stewardship and the Theology of What We Eat | RELEVANT Magazine. Retrieved from http://www.relevantmagazine.com/current/chipotle-fast-food-and-theology-what-we-eat
Nisen, M. (2014, March 20). How Chipotle transformed itself by upending its approach to management — Quartz. Retrieved from http://qz.com/183224/how-chipotle-transformed-itself-by-upending-its-approach-to-management/
Radke, A. (2015, December 15). Why Chipotle’s reputation is crashing & what that means for beef producers | BEEF Daily. Retrieved from http://beefmagazine.com/blog/why-chipotle-s-reputation-crashing-what-means-beef-producers