A Track Record of Turnarounds

Context

If there was ever a towering figure in the fast-food arena renowned for his track record of turnarounds, it’s Brian Niccol—the industry’s “fix it” expert.

Niccol’s time at Taco Bell was a masterclass in brand reinvention. He breathed new life into the business, embraced digital ordering long before it became fashionable, and rolled out initiatives that had sales skyrocketing. By the time he stepped away, Taco Bell was gaining new customers and springing up new outlets.

Then came Chipotle, battered and bruised after a series of food safety scandals.

Where others might have seen a lost cause, Niccol spotted an opportunity to shape a brighter future for the restaurant chain. He sharpened operations with relentless zeal, championed digital strategies that wooed back wary customers, and delivered a performance that sent the company’s stock price soaring a staggering 770%.

With operational efficiency firing on all cylinders and customer experience improving, the tables had turned yet again.

Today, Niccol finds himself at the helm of another goliath in dire need of a fail-safe turnaround: Starbucks.

Industry observers expect him to bring that trademark WarTime CEO mentality to the fore.

Real-Life Story

When Niccol moved from Taco Bell to Chipotle in 2018, Chipotle’s reputation had taken a proper battering after multiple outbreaks that turned loyal patrons wary of food safety.

Sales were limping along on the back of price hikes, while staff churn and competition for decent employees made operations even more difficult.

To tackle the food safety debacle head-on, Niccol set up the Chipotle Field Leadership team—a special task force aiming to sanitise, standardise, and stabilise operations. He also introduced DNA testing for ingredients before they even entered the kitchen.

A Food Safety Advisory Council of experts also stood ready to help Chipotle maintain high standards.

Despite the bad press Chipotle was receiving because of food safety issues, Niccol insisted on openness in his crisis communication strategy. Customers wanted transparency and Niccol delivered.

The staff, meanwhile, needed more than just a pep talk to boost morale. Service had been slow and employee training programmes were inconsistent.

Niccol made sure to whip operational protocols into shape. He and his team overhauled training programmes so that employees wouldn’t just know the drill—they would execute it and move like clockwork.

There was also the thorny matter of labour shortages and the threats of a strike. Niccol sweetened the deal for workers by raising average wages to US$15 an hour. This pay hike, paired with proper career pathways, helped keep staff on the team rather than fleeing to greener pastures.

Meanwhile, the introduction of Chipotlanes—clever, dedicated drive-thru lanes for mobile orders—reduced in-store logjams and made life easier for both customers and employees.

However, the real ace up Niccol’s sleeve was digital transformation at Chipotle. He poured resources into the mobile app and online ordering systems. By 2020, at the height of the COVID pandemic, 46% of Chipotle’s sales were digital. It was a testament to Niccol’s knack for spotting opportunities lurking behind every crisis.

Restaurants were remodelled to accommodate “skip-the-line” collections, cutting waiting times and smoothing out the customer journey. Additional assembly stations kept digital orders ticking along.

While Chipotle judiciously introduced price increases, it kept a keen eye on preserving goodwill.

Under Niccol's watchful eye, annual sales swelled to nearly $10bn. Operational excellence became the order of the day and employees felt more valued and engaged.

PostScript: This year, Niccol embarked on a new mission by stepping into the role of CEO at Starbucks. Before doing so, he carved out a legacy of service excellence at Chipotle.

Niccol turned Chipotle from a cautionary tale into a poster child for corporate reinvention. As he now assumes command at Starbucks, he will once again lead another troubled giant into calmer waters.

Key Lessons

1) Addressing the Elephant in the Room

WarTime CEOs own up to crises openly and honestly. Much like Niccol’s transparency about Chipotle’s food safety issues, WarTime CEOs address the problem head-on for their customers.

2) Putting Your House in Order

Before driving growth, WarTime CEOs ensure that the fundamentals are in order. They tighten up operations and retrain staff, as Niccol did, so the business’s backbone is sturdy before taking on fresh challenges.

3) Minding the Company’s Ps and Qs 

Communicate clearly, swiftly, and transparently to regain customer trust. Niccol’s openness worked wonders in bringing wary customers back on side—good PR can be just as crucial as a good product.

4) Leading from the Front 

WarTime CEOs show personal commitment and decisiveness. Just as Niccol rolled up his sleeves to ensure every standard was met, WarTime CEOs lead by example to inspire confidence in the ranks.

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Until next week, may the force be with you.

Kevin

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