A New Kind of Culture

The dinner invitation came on a whim.

The menu? Burritos. Not at all what Monty Moran expected when he accepted the invitation.

The host? Steve Ells, a culinary school graduate who had been cooking at the famed Stars restaurant in San Francisco, California, under chef Jeremiah Tower.

“I always looked forward to Steve’s dinner parties,” Moran recalled. “Steve is an incredible chef, and dinners at his house were always extraordinary. But when he said we would be having burritos I was initially disappointed. It just sounded boring. I was wrong. The burrito was awesome!”

Ells asked his guests, including Moran, what they thought of the taste. What he was doing was getting a feel for the flavor combination—the fresh approach—to a new restaurant concept he had in mind: a restaurant that would make the burritos he enjoyed in his off hours in San Francisco, but with his own twist.

The end result? A grand opening in Denver, Colorado, of the first branch of Chipotle Mexican Grill.

At the time, Moran hadn’t the slightest clue that he had eaten the first of what would become an internationally recognized burrito. He figured he had enjoyed another evening with a good friend.

A soon-to-be Pepperdine School of Law graduate, Moran’s focus instead remained on his legal career, which began in Los Angeles in 1993—the same year Chipotle made its debut. Three years later Moran and his wife Kathy (JD ’92) made the move to his home state of Colorado and took an associate position at Messner & Reeves, LLC. The firm, Moran figured, was a perfect fit. The young attorney’s ambition and leadership skills made him very attractive to the firm, and eventually led to a partnership and then his promotion to chief executive officer. Meanwhile, the friendship between Moran and Ells continued.

“Eventually, Steve asked me if I’d be interested in joining him at Chipotle,” Moran said. “But I was a litigator. I wasn’t in the restaurant business.”

Despite his success in law, he never closed the conversation with Ells. Instead Moran agreed to work with Ells to lease properties for Chipotle restaurants. After Chipotle became a client of Moran’s firm, Ells was also able to utilize his friend’s expertise as general counsel for his expanding business.

“By 1998 Chipotle was really poised for growth when McDonald’s made an initial investment in the company. I was happy for Steve, but I wasn’t yet ready to leave my law firm,” Moran explained.

When Chipotle started thinking about cutting ties with McDonald’s through an initial public offering, Ells encouraged Moran to join Chipotle full-time, recognizing that his friend’s strengths would be tremendously beneficial to Chipotle as the company continued to grow.

Monty Moran visited the School of Law in 2007 to speak with students about his career.

By 2005 Moran decided to take Ells up on his offer to join the Chipotle team. At that time the company had approximately 10,000 employees and 400 restaurants. Moran left his position with Messner & Reeves and became Chipotle’s president and chief operating officer. Among his new duties was to oversee all of the company’s restaurant operations.

“The first time I walked into a Chipotle restaurant I knew there was no way I could be a general manager,” Moran said. “I didn’t have half the skills that the managers had. But I had been chosen for my leadership skills. Steve saw how I led my team at the firm and the kind of culture we built there.

“I believed in building teams of all top performers—people who served the clients in the best way possible. It wasn’t about billing hours and making partner, it was about making everyone around you the best they could be, and letting your clients know that you cared more about their problems than they did. Steve saw how healthy the culture was at my firm and challenged me to build a similar one at Chipotle.”

So Moran did what most chief operating officers would not do—he signed up for a 10-week training program to learn everything he could about managing a Chipotle. He figured his success on the management team was dependent on his ability to understand a day in the life of every member of the crew.

“No one knew who I was except the manager that was training me,” Moran observed. “I spent time as a cashier. I learned to cook the food. I rolled burritos. I worked the tortilla press. I washed dishes. I fully immersed myself as a member of the crew. And I realized that it was the crew as a whole that was training me. The crew is what keeps the restaurant going. And the general manager, as their leader, is the most important member of our team— more important than me or anyone else.”

Moran used his time in the restaurants to learn as much as he could. He spoke with each crew member to see what they liked and didn’t like about their jobs, and what their aspirations were.

“I’d talk to the crew in the kitchen, people who were working for hourly wages,” he said. “I asked them what their goals were; if they thought they’d want to get promoted eventually. The idea sounded great to them all, but none of them believed it was possible. I don’t think any of them thought they had a shot at becoming a manager, at someday either running a Chipotle or taking on a leadership role.”

When his 10 weeks were up, Moran knew what he needed to do. He went to the regional directors with a new approach. Previous practice included very little promotion within the company. Moran found that the few restaurants managed by people who had served as a crew member earlier in their career were not only more successful, but proved more consistent and had very little turnover. The new Chipotle, Moran announced, was going to promote all of its managers from within.

“When the field leadership heard me say that the general managers were the most important members of the team, I think they were taken aback,” Moran remarked. “It wasn’t that the field leaders weren’t important, but that the best way for them to help the company was to ensure that we had excellent general managers and crew in all of our restaurants.

Moran began an effort to overhaul the restaurant staffing model—to create a clear path from crew to manager. He created a new level, “restaurateur,” for the most elite restaurant managers to reward them for their ability to run great restaurants and, more importantly for the culture he was building, for developing the people around them so that they too could become managers.

“What we were doing as a company was establishing a new kind of culture,” Moran said. “From the beginning, Steve was building a different kind of food culture at Chipotle: high-quality, raw ingredients; classic cooking techniques; a service model that lets customers choose exactly what they eat. I knew we needed

a people culture that was just as unique and compelling to help us provide the best restaurant experience we could, and to develop the future leaders we’d need to support our growth.”

Moran’s implementation of new programs proved successful. As employee morale began to grow, so did the level of employee retention.

“My goal is to make sure everyone in the company feels a sense of purpose,” Moran said. “I want them to have a vision of the restaurant and their role in it.”

Moran’s success with the company led to a promotion to co-chief executive officer in January 2009. As Chipotle celebrates 20 years in business, Moran can now be found traveling to many of the company’s 1,500 restaurants to work with managers and the rest of its 38,000 employees, including at the Chipotle branches in Canada, France, Germany, and the U.K.

His next step? To help instill a similar culture in the company’s newest restaurant, ShopHouse, from the beginning. With restaurants now open in Washington, D.C., and the Los Angeles area, ShopHouse closely follows the Chipotle model but with a menu of Southeast Asian cuisine.

“This isn’t just a place to come and punch a time clock,” Moran noted. “This is a place to build a career and be part of a movement that is changing the way people think about and eat fast food.”