How can organizations create high-performance cultures that empower employees to succeed based on authentic purpose? Chipotle Mexican Grill (CMG) has taken on this challenge by making company culture, inclusion, and diversity foundational for its business. The company's Chief Diversity, Inclusion and People Officer, Marissa Andrada, shares her lessons and advice.
How can organizations create high-performance cultures that empower employees to succeed based on authentic purpose? Chipotle Mexican Grill (CMG) has taken on this challenge by making company culture, inclusion, and diversity foundational for its business. As a result, the brand that was once in crisis is now one of the most successful restaurant companies in the world.
We speak with the company's Chief Diversity, Inclusion and People Officer, Marissa Andrada, about leading a workforce of 100,000 employees based on mission and purpose in 2022. It’s a story of human resources leadership and workforce management based on principles of diversity, equity, and inclusion (DE&I).
The conversation includes these topics:
- About human resources priorities at Chipotle Mexican Grill
- What does “purpose-driven” mean for Chipotle HR?
- What is the employee workforce culture at Chipotle?
- How does Chipotle create its culture?
- What is the role of consistency in creating a culture?
- Role of information technology (IT) and human resources (HR) at Chipotle?
- How does Chipotle make investment decisions and purpose-driven trade-offs?
Marissa Andrada joined Chipotle Mexican Grill in April 2018 as the brand’s first Chief People Officer. The role has since been formalized and evolved into the Chief Diversity, Inclusion and People Officer for Chipotle, bringing the brand’s purpose, To Cultivate a Better World, to life through its people.
Prior to joining Chipotle, she was the Senior Vice President of Human Resources & Chief Resources Officer at Kate Spade & Company and Senior Vice President of Partner Resources for Starbucks Coffee Company. Prior to Starbucks, she served as Senior Vice President of Human Resources at GameStop Corporation and Head of Human Resources at Red Bull North America.
Marissa Andrada: Our success is dependent on a healthy, engaged, amazing workforce. And those investments are not only just for the now, but we're relying on this workforce to become our leaders for the future.
Michael Krigsman: Welcome to CXOTalk. Today, we're speaking with Marissa Andrada. She is the Chief Diversity, Inclusion, and People officer of Chipotle Mexican Grill.
Marissa Andrada: I've been part of Chipotle since the beginning of 2018. I joined right after our new CEO, Brian Niccol, joined. And I was recruited to become the first chief human resources officer for the company. Immediately, I changed my title to chief people officer.
Just really quickly, why not human resources, and why people? My team's name is actually called People Experience because, when you think about human resources or HR, I think the first thing people think about (I know I do) is, "Well, HR is there to tell you the rules and whether (yes or no) you can do things."
It's really a pivot on focusing on all of our restaurant employees, our employee experience, and (from a people experience standpoint) much like (outwardly) marketers look at creating amazing fans of our brands, I think, internally, our original fans need to be our employees. And so, how are we creating an experience where our employees just say, "I feel amazing just being part of this company and being part of this brand"?
First, it was chief people officer. Then last year, in 2020, we expanded my title to include chief diversity, inclusion, and people officer. That was just recognition for all of the work that really started in 2018 as part of our transformation to reset our strategy and reset the culture.
If you think about the culture that we have, it's super healthy. We'll talk more about it, I know, in our talk. But the culture is demonstrating that employees can show up, be and bring their full selves to work, and bring their best ideas. When that happens, a company is healthy and can continue to grow.
Back in 2020, it was just really a recognition that even throughout the craziness of living through a pandemic and learning through it, civil and social unrest, just the way in which we quickly continue to have a dialog with our employees (as we started to in 2018), was a reflection of, "Wow! This culture that we have where we can foster a culture that values the diversity of our company and that leverages all of the individual talents of our employees so that we can grow the business, build our brand, as well as cultivate a better world."
It's really that. It's a reflection of, "This culture is strong and it exists," and so why wouldn't we want to recognize that in my title? So, there you go.
Michael Krigsman: We definitely need to talk about the culture. Give us a sense of context. Everybody knows the Chipotle brand, but how large are you? Frame that for us because you're hiring at such a huge scale.
Marissa Andrada: Sure. Yeah, we are, so Chipotle Mexican Grill is comprised of around 3,000 restaurants – it might be more by now – 100,000 employees (primarily in the U.S.). We are growing in Canada. We're also in Europe. And it's all company operated.
I think most people say, "Well, are you franchised or can I franchise Chipotle?" I think the beauty of our brand is that it's all company-operated and having 100,000 employees really delivering the safely prepared, fresh, amazing food to our guests actually creates a great opportunity for that. And so, most of our employees are general managers who run the restaurants, 80% of them have been promoted from within, and they're the ones leading our restaurants.
I'd mentioned this already. Our purpose is all around cultivating a better world. Our founder, Steve Ells, was the one to create this category of having amazing, fresh, sustainably raised food and ingredients, and bringing that fresh every day to the customer.
I know that there are others out there that also have that model. I think, for us, we are the category creator and we're the ones that really believe in bringing safely prepared, sustainably raised, amazingly tasting food every day to our guests.
Michael Krigsman: Clearly, your workforce is the crucial linchpin in making this happen. Tell us about the kinds of challenges that you faced over the course of these last couple of years.
Marissa Andrada: I do want to back up and actually start with 2018. I think that's the beginning of our journey with this transformation. For those of you out there who are familiar with Chipotle's journey, we faced a crazy food safety crisis back in 2015.
In 2015, there was a food safety crisis, which then, as a company, we then put in place all of these amazing protocols around food safety. We have a food safety council of amazing Ph.Ds., and what that created was really rebuilding the trust of our guests as well as the trust of our employees that our food is safe.
Fast-forward, as this new leadership team evolved in 2018, what we walked into was a culture where it was all around being food safe. What I mean by that is the most important priority around our employees is that they show up to work feeling healthy and that they have access to sick days right away.
I share that with you because I think it was an interesting thing to have that kind of commitment to the health and wellness of our employees as it relates to food safety as part of our company's growth. I mean it was about building trust with our guests and with our employees.
What I mean by food-safe, every day, before an employee can even walk into the restaurant and start their job, they go through a wellness check. That wellness check is the manager on duty just saying, "How are you feeling today? Are you exhibiting or feeling any of these symptoms? Are you caring for anyone at home with these symptoms?"
In food safety, it's all things that might lead to not food safety but then, in COVID, we also included COVID symptoms as well as a mental health check (as people were coming in). I think it's important, in 2018, to walk into a company that already had this amazing commitment to food safety culture, and then this foundation of the health and wellness of our employees being really important was important as we all experienced 2020 together.
Going back to your original question of really supporting the workforce, I think there are some amazing things that we had the foresight to do as part of our growth. In 2018, it was about how do we turn this company back around and start this growth with Chipotle. We said in order for us to grow, we have to create a world-class, people-focused organization where we're maniacally focused on people.
I've shared this vision of cultivating a better world. It also means it's cultivating an environment where all of our employees can thrive, pursue their passion, and become life-long leaders. That thriving first starts with health and wellbeing, but it also is about their own growth and development.
In 2019, we introduced programs such as tuition reimbursement at 100% for our employees up to $5250. Then by the end of 2019, we introduced this access to a debt-free degree.
That was partially because there's a huge chance for anyone – and I've shared with you – with our population, 80% of our general managers have come from the crew. We just wanted to extend that pathway to opportunity that an employee can join, work with us part-time (15 hours a week) and have access to these amazing education benefits. But in as soon as three years, actually have a quick pathway to middle-class and be making over six figures as a general manager.
Then lastly, as we went into 2020 (with all of those new benefits and investments in place), we then invested in access to mental health for all of our employees and their families as well. Leading into 2020, we didn't have a crystal ball. What we're fortunate about is that by living our purpose as well as creating this environment where the health and wellbeing of our employees (first and foremost) was the biggest priority for us as a company, and then leaning on developing their full selves so they can bring that to work, I think, was critical as we led through 2020.
Now for us, we didn't close our restaurants. While the dining rooms were closed, our employees showed up every day to make sure they were providing safe, well-prepared food for our guests who were looking for that during the pandemic.
Michael Krigsman: You used the phrase "living our purpose." What does that mean? Most importantly, how do you translate that purpose into action? I think that's where people have trouble.
Marissa Andrada: Cultivating a better world is our purpose, and it's through food with integrity (as much as I've said, too), and through people with integrity. The way that comes to life within Chipotle is through values that we codified as a collective leadership team, as an employee team back in 2018.
As this team came together and we had a new strategy to enact over the next couple of years, what we learned was, "Hey, we need to really create a strong culture where the employees also are part of this and want to deliver on the strategy."
And so, our leaders got together, our CEO and leadership team. We got together. I brought in someone to facilitate a conversation that then resulted in nine values based on the artifacts and history of our company.
Those nine values then went out to our restaurants. I had my team members (in People Experience) go out and literally crowdsource feedback.
Those values became six. Then we went to our field leaders, and those values then became four. Then we went to our employees.
We actually moved from Denver to Newport Beach and Columbus. Those employees who moved with us also gave feedback.
At the end of the day, we ended up with four values, which are:
- The line is the Moment of Truth, and it's really all about that amazing food that is prepared safely every day, but it's also about that experience that we create for our people, whether it's our employees or our guests around that food line.
- The second value is Teach and Taste Chipotle. There is a lot of detail with our business, especially when our employees show up at 6:45, 7:00 a.m. every day in order to open up at 10:00 a.m. Again, it's the preparation of all that food and cooking, but it's also a metaphor that, as part of being in this company, we each have the responsibility to bring each other along.
- The third value is Authenticity Lives Here. Our food is real and so are we, and we want our employees to bring their full selves to work.
- Then the last value is We Do What's Right Even When It's Hard. So, if you think about just the history of this company and (for us) – sourcing better ingredients that are sustainable and organic sourced through local farmers, et cetera – the fact that we believe we hire better people, we need to do what's right even when it's hard.
When I say, "Living our purpose," that purpose really came to life through these values and the way that actually came to be inside the company was through so many ways. It's not just, "Hey, we're done with that exercise. Let's publish it and put it up on the wall somewhere." No. It actually starts there, like, "Here are the values."
We were fortunate, back in 2018, when we brought all of our general managers together. It's about 3,500 people in the room in Las Vegas. That whole conference, which we have every other year – except for during COVID year, we did not – everything that we talked about was through the lens of those values, educating them on what those values mean.
Then as we talk about, "Hey, here are some new things that we'll be introducing to the restaurants," it was through those values.
Then fast-forward, after we introduced those values, I ended up just having an open call to all of our employees and send a note saying, "Hey, everyone. Let's rally. Come join a meeting (totally up to you) so we can talk about how we live our values and create community across all of our locations."
That then created this cultural ambassador committee where employees from different areas and different levels of the company came together. They said, "Here is how we live our values," and it's things around how we communicate, how we treat people, what decisions we make as a business.
They gave us all of these ideas. When I say, "us," the leadership team. Then coming out of that, one way in which we were living our purpose is that then that created what we call our employee resource groups.
Out of the cultural ambassador committee, the first employee resource group was born (at the beginning of 2019) called the HUSTLE. The HUSTLE is an acronym for Humans United to Support the Ladies Experience. It's all around how men and women inside Chipotle can attract, elevate, and develop women in the workplace.
That team, on its own, actually helped to inform a lot of benefits for us. When I talk about our mental health benefits, they really helped to inform that.
When I think about the extension of our parental leave, our paid time off for parental leave (whether it's maternal or paternal or adoption leave), they informed that.
They also created a program because a lot of our employees were first-time mothers (in the last couple of years) returning back into the workforce, in the restaurants, and they created a maternity program. I think about that as an example of how we're living our values and living our purpose.
In another way with our employee resource groups, we have a group called UNIFIED, which actually came together during the pandemic and right around the time that all the civil and social unrest was happening. That's also an acronym for United Network of Influencers Furthering Inclusion and Ethnic Diversity. It's about this multicultural group using their voice to help inform what we're doing differently and/or more of to support this diverse workforce.
For example, last year, UNIFIED really put the ideas in the laps of our general managers, so everyone who runs the restaurants, on, "Hey, general managers. What can we be doing to cultivate a better world internally and externally?"
Those general managers had access to local community grants that they could make, all-around furthering inclusion and ethnic diversity in their communities. They were given the opportunity to make these community grants to organizations that they felt were part of their community to kind of further that effort.
As well, they informed us on how we can invest some of our cash into the HOPE financial network, which is kind of down south in the U.S. It's a financial bank network that funds black-owned businesses. That's one example of living our values.
Then, more importantly (I think, more broadly), as we lived through the pandemic – and no one had a playbook on how to live through the pandemic – those values, like when we had to make decisions on the business, we had to pass it through the lens of those values. When we knew that we hit every one of them, we knew we were doing the right thing. I think it has to come to life through that in everything that you do.
Michael Krigsman: It sounds like these values are the reference point against which you make the business decisions for the company.
Marissa Andrada: Yes. Absolutely.
Michael Krigsman: Clearly, you've embedded this approach deeply into the culture of Chipotle. How did you do that? How did you make that happen?
Marissa Andrada: I shared a lot about how when we introduced the culture through the values that it was starting at a mega-conference where all of our leaders were all in the same place. I think it was important to communicate that up front and then have different leaders come up and talk about it and talk about it through the lens of our business plans.
It started with that, but also, the way that kind of becomes organic to the organization, it is about (again, pick any one of these values) the way in which we developed our people processes, the way in which we coach and develop our employees.
I'll give you one example. We have a process that we call our 4x4 discussions. In those 4x4 discussions, we expect that every manager has a conversation four times a year on four questions with their employees, so at least four times a year on four questions with their employees.
This is a way to ensure that everyone is focused on the right thing as well as living our values as they're delivering for the company. Here's what I mean by that. Those four questions are:
- Looking back on this last quarter, what is it that I accomplished?
- The second question is, how did I live our values?
- The third question is, looking forward, what is it that I need to be accomplishing (for the company)?
- Then the fourth is, in what area do I need support in my own personal or professional growth and development?
The fact that, at minimum, we know our managers are talking about setting objectives and giving feedback on both performance and development through the lens of our values, that is a way that just kind of got people going. It was amazing that they would talk about the values and say, "Well, here's how I demonstrated the values through delivering these things in the last quarter."
We did that for all of our (I'll say) salaried employees. Then we took that to the next level for all of our hourly employees in the restaurants. It's those four questions at least two times every year.
What I love about that is that, again, if you think about those values – The Line is the Moment of Truth – they're talking about how they're delivering the business through that lens.
Teach and Taste Chipotle: That conversation in and of its own – talking about the details of the business and how they're getting the work done – is really important.
The third is Authenticity Lives Here. Also, they're talking about, "Hey, where do I need support and development in my own personal and professional development?"
The Line is the Moment of Truth, You Do What's Right Even When It's Hard: Performance over the last three years (since we've kind of gone on this journey) is really about making hard choices.
That's one way in which living those values are real to every individual in the company in a very real way. Then all of those other things that we talk about – investments we made in people – that just illustrates the fact that we're committed to cultivating a better world by cultivating an environment internally where all of our employees can thrive, pursue their passion, and become life-long leaders.
Michael Krigsman: What's the hardest part of bringing culture together in this way, especially at the scale at which you operate?
Marissa Andrada: I think it's about consistency and it's about ongoing communication and education with everybody. Here's what I mean by that. Any time there's an opportunity to communicate with our employees, whether there are 5 in a room or whether there are 100,000 in a room (virtually), it has to start with the "why," like who we are and what we care about, who we are and what we stand for.
I think that consistency and talking through our purpose and our values have to be there. If you forget to do that, then I think people forget the reason why we're here. Yes, we are Chipotle Mexican Grill and we deliver this amazing food – safe, sustainably raised food – but it has to be through the lens of our values.
I think the other challenge – I don't want to call it hard – is making sure that it becomes part of how our managers engage with our people. Initially, managers thought, "Well, do I need to memorize all of these values?" as they were learning all the specific language around the values.
I think what ended up happening organically was we learned that they were starting their shift meetings, their huddles when they start their job at the restaurant, they might even say, "Hey, let's talk about our values. What's your favorite one and why?"
I think what's challenging or what could be hard is if you don't have that consistency, and you don't always bring people back to that center of who we are, what we stand for, and why we even exist. Then I think that's going to be a challenge.
I think, too, gosh, let me go back to 2018. I'd mentioned briefly that part of our resetting the company and resetting the culture was not only around codifying the purpose and the values. We shut down our restaurant support center in Denver (after being there for almost 25 years) and moved, whether it was to Newport Beach, California, or Columbus, Ohio.
Part of living our values is you have to hire people who believe in that. For us at least at the support center, which is different than the restaurants, as we were looking for people, I remember having conversations with every one of our final candidates who came in.
First of all, that's unusual. Everyone said, "Well, it's unusual that I'm meeting with the chief people officer of a company for a role at the office." To me, it was about making sure they were clear and that their eyes were wide open, as they were walking into this company, knowing what they're signing up for.
I think the good news is, look, if you're aligned (personally) to the purpose of cultivating a better world and (personally) these values speak to you, then I think that's kind of half the battle. The hard part is when you hire someone quickly and they're not about the purpose and the values. I think that's when it doesn't come to life.
Then fast forward. From an employer's standpoint, look, my team did a lot of work as we were defining what I'll call our interview guides, our success profile for every position in the restaurant, making sure that there was a lens through which managers, as they were interviewing people, had those culture questions that they can ask to make sure that people can add to this culture through our values.
Michael Krigsman: The key then is the consistency (as you were describing) but, at the same time, finding ways for people in the restaurants throughout the company to experience what these values are so that they can integrate the values and put them into practice in a meaningful way.
Marissa Andrada: Oh, absolutely. It's interesting. Fast-forward. Earlier this year, we had a virtual conference with our field leaders, so that's our above restaurant leaders who support the employees in the restaurants.
I was watching every presentation or every workshop where they were teaching how to have increased throughput or with our growth in our digital business, like how does that change in the restaurants. The fact that they were using the values language and how they were describing their workshops or their topics was astounding to me. I'm like, "Wow! It's incredible to experience this."
Michael Krigsman: I have to assume that, given your size, for many employees and many of the managers, this approach to culture is something that they have to learn.
Marissa Andrada: Is it something they have to learn—I think out loud—when you co-create something with your workforce? It's not like we did something to our employees.
I talk about having brainstormed these values. We started off with nine and then, really going and talking to our employees, to our leaders in the organization so that they can shape what those values would look like. It's not that hard if you create a way for people to participate. Then it's this whole procreation of this environment.
It's not like, "Hey. Here's the people experience team. Here are all the things we're doing, and we're going to do this to you." It's engaging our employees along the way to create that culture, and it's really through those values.
I don't think it's that difficult to learn, and it's about really creating a platform for employees to bring their full selves. Who wouldn't want that? It's personal.
It's personal in that one of our values is Authenticity Lives Here: Bring your full self to work. Even these conversations (at least four times a year or two times a year) around the values where they bring their ideas forward, it can't be that difficult because it's this two-way conversation and engagement with our people.
Michael Krigsman: It makes sense, and I love what you said. You used the term "co-creation" of these values.
Marissa Andrada: Yes.
Michael Krigsman: To me, that is the key thing because so often we think about relations with our workforce as being one-directional.
Marissa Andrada: Right.
Michael Krigsman: We tell you what to do.
Marissa Andrada: I know that; having been a career businessperson who happens to be in human resources. I agree with you. I think that's a shift that a lot of companies are now learning.
Coming out of the pandemic and now going into 2022, everyone is opening up. Labor has been an issue for a lot of companies. The learning, coming out of the pandemic as well as the learning going into how do you manage through these labor challenges, is that it is a two-way street.
I think what I've heard everyone talk about is it's not the employer's market now. It's the employee's market. The employee gets to drive what they want in their experience out of their own career and job (wherever it is that they work).
To your point, Michael, it is about this co-creation and that it's a two-way street. You're part of an organism. You're part of a family that has that conversation. I feel like a lot of people are running as fast as they can to catch up now and that it is a two-way conversation.
Michael Krigsman: Arsalan Khan, who is a regular listener – thank you, Arsalan – and asks the most interesting questions, he asks about the role of technology. He is an enterprise architect. He's involved with IT, and so he wants to know how you work with IT. Are you a partner? Is IT an obstacle, which I'm sure it's not? [Laughter]
Marissa Andrada: IT is an extension. If I speak specifically for people experience, they have been an enabler for everything that we are doing in terms of creating that conversation with our employees. Technology definitely is an enabler.
I'll talk about a few nerdy things that we also did from a people nerd standpoint. [Laughter] We have a human capital management system called Workday. It was initially configured just to run payroll.
We worked side-by-side, hand-in-hand with our tech folks to ensure that we reimagine Workday in a way that our employees can interact with it more intuitively. It was a way to enable all of the people processes around 100,000 people. It was kind of manual before, and you can't do that when you've got 3,000+ locations.
Another way in which we've worked with technology is that we're now implementing a labor forecasting, scheduling, and time-keeping tool. It's a way that our restaurant employees can have predictable schedules two or three weeks in advance (via mobile), and they can see it. If that doesn't work for them (a week or two from now), they can at least let their manager know and/or swap shifts with somebody else.
I think technology has helped that employee experience become easier. Instead of the old-school way, which is to go to the back of the restaurant, take a picture of your schedule, and then see if you can make a request to change your schedule.
Another way is our learning management system. We're in the midst right now of implementing a new learning management system, which is mobile-first. Again, the way in which we can engage with our employees more directly, technology has helped us with that.
If I think about what a lot of companies also learned was it accelerated their digital business as they interact with their customers. For us, we're accelerating our digital interface so that we can better interact and engage with our employees. Tech is super important in that.
Michael Krigsman: We have another question from Twitter. This is from Lisbeth Shaw who asks, "The programs that you described, how do they change or vary across managers, back-office employees, food processing, all the way to the restaurant employees?" I guess she's asking about the consistency throughout the different parts of the company.
Marissa Andrada: The programs are one and the same for every employee at the company. Whether you're a part-time hourly crew member and/or you're a manager of the restaurant or a field leader of the restaurants or sitting in the office in the restaurant support center, everyone has access to those benefits.
I think that was the big change for us back in 2019. I'll focus on education specifically. Back in the day, I think our education benefits, per se, were specific to only full-time workers, full-time salaried team members at Chipotle.
In 2019, we expanded it. We expanded it and said, "Alright. Let's take a look at our educational needs. How do we create an environment where employees can bring their full selves, be their full selves, they can thrive and pursue their passion?"
Education was kind of the first to unlock for us. Our hourly employees already had access to health benefits.
Education – I'll get really specific – the first thing was English as a second language and GED, getting your high school degree. We made that available to all of our crew members, our hourly crew members, as well as their families. Chipotle will pay for that.
Part of it, if you learn English as a second language or try to get your high school degree, we believe that success will happen when you've got that support network around you. That's the first time that we expanded our education benefits to include our crew members, and then everything else that I shared: our tuition assistance up to 100%, our access to our debt-free degrees. First and foremost, it is our hourly employees in the restaurants that we keep in mind for our benefits, but then everyone in the company has access to it.
Michael Krigsman: How do you balance all of this against the cost?
Marissa Andrada: The way we look at it is really about how do to invest in our people and invest in the future growth of Chipotle. You and I have talked about this. Our success is dependent on a healthy, engaged, amazing workforce.
Those investments are not only for the now. Yeah, great that we can invest in our people today, but we're relying on this workforce to become our leaders for the future.
When you think about the cost of that, that's the ROI. It's about betting on the future of this company and investing in a strong workforce today.
One terminology that I love using (that we haven't talked about yet) is sustainability. I know we mean that from a supply chain, value chain standpoint. The fact that we rely on local farmers. The fact that we care about how animals are raised and that we have organic plants, et cetera in our restaurants.
I think about sustainable and sustainability in the organization, meaning that you can't keep getting new people into the organization and having other people leave. It's about how you invest in the growth of the people inside the organization so that they can continue to grow, they can continue to flourish, and that they become the workforce of the future.
Sustainability – I mean I really mean it – it's not only in our food but how do we do that for our people so that they see that renewal and that growth as they grow with the company, whether they want to stay as a crew member or move into a leader of the restaurant or in field leadership and/or into a role into our restaurant support centers? That's how you justify the cost.
Now, I will tell you, you still need to create the business case. I think, again, if our CFO, Jack, was sitting side-by-side with me, he would tell you it's about investing in the company's future and that's why we do it.
Michael Krigsman: This is again baked in deeply to the fabric of how Chipotle runs its business. That's the key.
Marissa Andrada: That's right. That's right.
Michael Krigsman: We have another question from Twitter. This is from Arsalan Khan again. He loved your example of how you use data to make decisions. Are there other examples of the way that you use data to manage the business?
Marissa Andrada: The way we use data – and I'll use a people and just business example – is that one thing that we identified very early on (when we came together as a new leadership team) was there was a very important measure, which we identified, which is stability. The hypothesis is if you have a stable general manager leading a restaurant, then that will drive stability and consistency and then growth for a business.
A couple of metrics that we look at to measure stability is really to look at the transfer rate of leaders in the organization, the retention rate of leaders, and engagement. Then when we work with data scientists, we can also come up with a stability measure that then translates to topline growth as well as profitability for each restaurant.
Using that data, when you do everything you can – and again, I'll apply what we do to develop people, how we invest in people, train people, et cetera to create that stability for a leader – that then translates to, "Oh, we should be investing in the company because here's how it impacts the top and bottom line."
Our data scientists have helped us pull that correlation together. Then you can see the proof. The proof is, "Hey, look. If you're a general manager, the longer you're in a role," – and I think that sweet spot is between two to three years in the same role at the same restaurant – "drives the right amount of stability and consistency, but also drives amazing top and bottom-line growth for your business." That's one way in which we use data to help us make decisions.
Michael Krigsman: It sounds like you've created a virtuous cycle where you know how and where to invest in your employees and the impact that has on the bottom line of the business, which then reinforces making those investments, increasing, continuing those investments.
Marissa Andrada: Yeah, I love that you say that. It is a virtuous cycle. It feeds it on its own. Yeah. It's great that you recognize that.
Michael Krigsman: Can you tell us how you recognize the importance of this topic and how you got Chipotle, as an organization, on board with it in such a major way?
Marissa Andrada: The way Chipotle recognizes it is that if we are living our purpose of cultivating a better world through the lens of our values and those values come to life every day – The Line is a Moment of Truth, Teach and Taste Chipotle, Authenticity Lives Here – and the movement is real, I think that's when the organization jumps on board with it. Again, hiring people who live our values.
I think about the value of diversity and inclusion. We had a third-party diversity company show up last year, help us just do an assessment (up and down) of how well our diversity and inclusion practice is.
One thing that they said was a huge differentiator versus the other 999 companies that they've assessed was, "Hey, your diversity numbers are there." If I talk about the obvious from a diversity standpoint, yes, we have a diverse population. It's almost 70% in the restaurants, and we have worked really hard in the last 3 years to ensure that we reflect that above the restaurants. They say, "Well, that's there."
I'll fast-forward. There is a collective (what I'll say) diversity strategy that wasn't created by people experience. In fact, it was created by every function leader including representatives from the restaurants on our commitments around diversity. That came together through the leaders.
I think about diversity from the obvious standpoint. That's already happened because, again, it's this whole notion of co-creation. We're not going to be behind the scenes and say, "We're going to create this thing, but "What are your ideas, and how does that inform what we should be doing as a company to make these commitments?"
But then I think our true litmus test was, again, we looked at pay equity and across gender diversity was at 100%. A lot of that is self-fulfilling. When you live these values, you're doing the right thing.
Even this company said, "Well, you know, what's unusual is your biggest differentiator is people talk about the values all the time." In and of its own, it creates this inclusive environment where people can feel like they can bring any idea forward and that they will be heard and seen. I think that's how it becomes important to a company.
Michael Krigsman: We have another question from Twitter. Again, we're just about out of time. What does equity and inclusion look like at Chipotle? You've been talking about diversity and you referenced equity, but what does equity and inclusion look like?
Marissa Andrada: Equity, to me, is about giving everybody equal access and opportunity to success. If I think about our hourly workforce, equity to me means that they have access and a transparent pathway to opportunity.
The fact that you can join the company as an hourly employee – and I say transparent opportunity. The training to get to every level within the restaurant and then above restaurant is apparent and it's there for the taking. We get you there. The fact that we give you access to education, whether it's a high school degree, English as a second language, two-year degree, four-year degree, certifications, all of those things within our ecosystem at Chipotle. Equity to me means there's access to personal economic mobility through all of that. That, to me, is equity.
The other piece from an inclusion standpoint, we've already talked about this. Inclusion is again inviting people to fully bring everything that they are because that just allows them to bring the ideas that we may have never thought about had we not done that.
Inclusion is this co-creative nature that we have of everything that we do, as it relates to supporting our people. That's inclusion. That's how I would define it.
Michael Krigsman: Marissa Andrada, any final thoughts (as we finish up) that you'd like to share?
Marissa Andrada: A way to engage a workforce – whether it is one person, 10 people, 100 people, 100,000 people – at a company is (as an owner of a company or as a broader company), be clear about who you are and what you stand for. Make sure that the people who are part of your company also believe in it, too.
At the same time, it goes both ways. Understand who they are and what they stand for and allow them to bring that along. I think that is kind of the foundation for success, whether it's in great times or in turbulent times.
Michael Krigsman: Great advice. Thank you so much. Marissa Andrada, Chief Diversity, Inclusion, and People officer of Chipotle Mexican Grill, thank you so much for taking the time to be with us today. I really, really appreciate it.
Marissa Andrada: Heck, yeah. I really appreciate you. It's been a lot of fun.
Michael Krigsman: Everybody, thank you so much for watching, especially those people who ask such great questions. Before you go, please subscribe to our YouTube channel, hit the subscribe button at the top of our website so we can send you our newsletter, and check out CXOTalk.com. We have great shows coming up. Thanks so much, everybody, and I hope you have a great day. Take care. Bye-bye.
Published Date: Nov 19, 2021
Author: Michael Krigsman
Episode ID: 732