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Chipotle's Monty Moran Unwraps the Restaurant's Success Story

Stocks in this article: CMG MCD SBUX

Sozzi: Are you concerned about culture preservation as the company grows even larger?

Moran: The name of the game to making sure the culture works, and is sustainable, is making sure that we have enough restaurateurs being developed. Then, we have to make sure enough restaurateurs are rising up into positions of leadership in the company. We are pleased to see that a lot of this is happening.

Sozzi: Have you and the team noticed over the past year or so even more qualified applicants seeking to join the Chipotle team?

Moran: Yes, I think the average quality of applicant that comes into a crew position today is vastly superior to what it was five, six, seven years ago. People come to us because they have heard of us now, not just as a concept, but also as a people-oriented culture. They come because they have heard of the opportunities, and we have a lot more applicants than we used to, and we are able to be a lot pickier. I think we are also better at picking for positions in the restaurant. We really take a long view of everyone that gets hired at Chipotle.

The more people see their peers moving up, the more the word of mouth carries out, the more people recommend us to their friends. And because the opportunities are so significant to move up, we get people that are willing to take, I would say, significant demotions in terms of position. For example, being a crew member at Chipotle, so they can move up and become restaurateurs.

Sozzi: Could you take us through where new technology has begun to appear inside the restaurants?

Moran: In terms of mobile and online ordering, years ago we rolled out an application for your iPhone and then Android very recently rolled that out. The reason we worked through these was really to provide convenience to some of our customers that are pretty tech savvy. We didn't want to be low tech and then disappoint their desire to have that way of ordering Chipotle. Of course, we have the online ordering system now by which, between phones and online, is 4% of our business today. It's a significant amount of business.

Sozzi: What are you doing right now operationally to take Chipotle's best-in-class line speed up another gear?

Moran: From an equipment standpoint, having these great new tortilla presses that we basically designed and invented some years ago, and which now are in most of our restaurants, that heat the tortilla more quickly and evenly so it's easier for our crews; the change machines we rolled out some years ago.

But the No. 1 thing that helps throughput is our focus, a couple of years ago we started with our four pillars of throughput. We have found that even if there are 100 things you could do to improve the throughout, 90% of the benefit you'll get is contained within these four pillars, which are very specific things we teach each person in our restaurant to do.

Two of them are actually positions in the restaurant, an expeditor, which is the person standing between the person that rolls the burrito and the person who serves it, and who makes sure to put it in the bag to go, get you a drink if you need one, or chips and guacamole if you wish to have that. So, the cashier doesn't have to trouble themselves with that. The other is a linebacker who walks behind the line and makes sure the food is full, and the frontline and kitchen are humming, all the spoons and pans are in place, and the line is clean.

The other two are mise en place, French for "everything in its place." Before service starts we want to make sure that absolutely everything is ready to go so people don't have to leave the line during peak hours to go do something that should have been done before. And finally, the other is what we call "aces in their places," meaning having the person that is very skilled at each position in that position at peak hours, and not having them training someone that may not be as skilled.

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