Welcome to How Leaders Lead, where every week you get to listen in while I interview some of the very best leaders in the world. I break down the key learning so that by the end of the episode, you'll have something simple you can apply as you develop into a better leader. That's what this podcast is all about. Welcome to our first episode of 2024. I'm excited about the year ahead and honored to kick things off today with none other than Brian Nickel, the chief executive officer of Chipotle. Now Brian and I actually go way back. Believe it or not, I hired Brian as a marketer at Pizza Hut when I was running young brands. I'd heard he was a rising star with big ideas and I knew I wanted him on my team. These days, it's clear he's still passionate about finding those great ideas because as you probably know, Chipotle does some really innovative stuff with their marketing and their menu and everything that they touch. But as you'll hear today, there's more to it than just big ideas. Brian knows how to focus on the right ideas and then create the kind of structure, execution and team motivation to really make them happen. And with Chipotle doing better than ever, it's clear that he's found a recipe for success. And I know you're going to get a ton of value when you hear how he leads. Here's my conversation with my good friend and soon to be yours, Brian Nickel. You know, I know there's not too many people that work any harder than you, Brian, but I heard through the grapevine that you and Jim Hope just won a major in amateur golf, the Cyprus Point member guests. That had to be a thrill for you. I thought about giving up golf after winning because I'm not sure it gets any better. And I finally found the right partner, it seems like. He carried me all the way home. So it was a lot of fun. I tried to convince my wife to put the trophy on the dining room table, but it ended up getting a pretty good spot in my office, which is great. You've always been a great team player. Give people credit when credit is due. So giving Jim that not is great. When I talked to him, he said you carried him. So you no wonder you guys were such a great team. You know, Chipotle, I don't know if there's a more cool brand in the world. I mean, it's a great brand. You just, you know, we're doing this right after Halloween and you had the Bur rito Halloween promotion. You know, you're always creating a ton of energy for your customers and your people. Do you have any daily rituals that get you fired up and ready to go? Yeah, look, you know, one of the things we always talk about here is we want to be very much in touch with what young people are doing. And the best way I can do that is I broke down and got a Snapchat account, partly because I wanted to communicate with my kids. But you know, I stay active on the key social media channels and that's really TikTok, Snapchat, Instagram. And we're just looking partly to see what's going on out there. And as part of our ELT meetings, we do this thing where we all talk about like, hey, what did you see over the weekend? What did you see this past week? What are your kids talking about? What are your kids' friends talking about? And it's kind of funny because on the one hand, it started out as a little bit of a joke of like, gosh, we're all getting so much older, our kids, blah, blah. And it's actually turned into something that as a ritual, one, we enjoy doing it. And two, it gives us some insight into what are the things we can do to keep Chipotle fresh, keep Chipotle connected. And I think it's been proving to be a pretty powerful practice that we have. You know, ELT, I think for all of you listening out there means executive leadership team. And you have always been such a talent magnet. I mean, you've always brought in really great people. What do you think is your secret? And what do you do maybe that's a little different than other people to recruit the very best people and retain them? That's a number one priority for me. I actually, I learned that when I was working for you a while ago, you know, your only as good as the talent that we can be attracting and energizing every day. And one of the things I say to everybody is, look, we are a place for ideas. And if you want to come to a place and you're willing to press your test, your ideas, we're going to give you a shot with those ideas to make it to market. We use a disciplined approach with it as stage gate process. But I think what gets these guys excited is their ideas more often than not make it, you know, whether it's in the digital space with, you know, it was a couple of years ago, we were experimenting with the metaverse to where we are today with how we use our rewards program to better engage with people or most recently we're doing a food program called Carnier Sada. These were all ideas that came from folks in our organization, put it through the stage gate process and then saw it to market. And when I talk to like Kirk Garner, the gentleman that runs all of our tech, we get a lot of people applying for these jobs because they want to bring their ideas to market. And when they find out that we're a place that embraces the ideas, we'll press your test. If it works, we're going to put more fuel to the fire. And that's kind of the approach we've been taking. As CEO, what do you enjoy spending your time on the most? Two things. One, our people are super important to me. One of the things that's pretty unique about our company is we actually own all 3000 restaurants. So we've got over 100,000 employees. And I'll tell you what, I love seeing people get promoted. I love seeing people achieve success and then having the opportunity to talk about that success. That is super energizing to me. 94% of our promotions will be from within. And we're going to promote people almost every day. And it's really exciting to see people achieve their ambitions. And then when they realized they've achieved something , they could strive for the next thing. And that's super engaging. The other thing that gets me really excited is, look, I love our food. As a matter of fact, today for lunch, we all had Chipotle. And I'll tell you what, when we do the culinary right, I just get fired up, David. It's like, I'll take more queso, I'll take more chicken. The older I get, I got to watch how much queso I take in. But I'm fired up about our people and I'm fired up about our food. Our advertising is very good and you showcase your people. How do you decide who gets to go on those commercials? Is it a part of a recognition program or is it just you look for the best actors? Well, we do have a lot of actors, that's for sure. Actually, what we did, the very first time we did this, we put it out to folks like, hey, send us in these videos of what you like working about at Chipotle. And they didn't even know that we were potentially going to turn around and select them for the ads. And so it became a big surprise after we did that the first time though, people caught on like, okay, they're looking for our employees to be in ads. And I'll tell you, this is where you find out just how many talented people you have in your organization at all levels. And you'll see in some of the ads, David, some are general managers, some are field leaders, which are people that oversee 7, 8 restaurants. Some are team directors, they oversee 40, 50 restaurants. Basically, they submit in what they find special about Chipotle. We got this great director, Earl Morris, he's kind of a documentarian. And he brings out the best in these folks. So we 're pretty blessed to have as many wonderful people as we have. Brian, we're going to dive deep in how you're leading at Chipotle. But for a second, I want to take you back. What 's the story from your childhood that's shaped the kind of leader you are today? My mom and dad, great people, they always instilled in me. Look, if there's something you want to go achieve, figure out the best way to prepare yourself for it, give the best effort you possibly can, and then you can be satisfied with the outcome. And then the other thing that they told me was, look, you may not know everything and seek out folks that might know more about that topic than you and help them get better. And when I was younger , it was all really more centered on sports. So I was always trying to find like, and when I was trying out for the baseball team, I wondered who was, I thought the best pitcher. And I wanted to end up on that team because I figured that's how I get better as a pitcher. I didn't articulate it this way when I was younger, but I was like, hey, if I can play with, at the time, it was like Scotty Lawrence. I know Scotty and I will be much better pitchers together than if we're on different teams. And I kind of just took that through my whole life. And when I got to college, I did the same thing. I was like, look, I want to be on the best project team. Like, if I can be around people that I think will push me or pull me along, then I'll just get that much better. And I think that's something I've always just taken with me. And hopefully I still do it today. You know, speaking of being the best, you are really one of the best marketers I've ever worked with. And I know you came up at Proctor and Gamble. And at one point, I remember you telling me you were a handed a challenge of making mouthwash portable. Tell us about that. And how did that stretch you as a leader? Boy, you got a great memory, Dave. That's good. That's really good. Yeah, I was an assistant brand manager on Scope. I don't know if you remember, there was at the time, remember the pieces of paper for mouthwash? It was like, oh, yeah, you put them in your tongue. Yeah. And you know, you also had altoids kind of just taking off to where that really strong mints. Actually, they had a great selling life. He was like a curiously strong mints. You know, so Scope was stuck in people's bathrooms. And we're like, well , how do we get scope to be portable so people could use it more? Well, there was this technology that folks had and was like in a little ball, you remember the gum like squirt when you chew on it burst out? And that's what this was. This was in a little membrane. And we had a great name was called Microscopes. But you know, one of the things I learned is you can't just sometimes market past with the product experiences. And the only b ummer in that product was after the scope squirted out, there was a little residue left in your mouth. Even though you had great breath, you had a weird taste in your mouth. So one of those things where I was like, I thought I found like this killer project from the past. And I kind of walked past some of the things that held it back. But you know, fortunately, it was one of those things that we learned quickly that it wasn't going anywhere. Now, I'm sure there's a lot smarter guys that have figured out how to make scope work outside the bathroom. Well, you know, I remember when we were trying to recruit people at young brands, you know, I was asking around like, who are the top people at Proctor? And your day always came up as a rising star. And I was really happy to see you come to Pizza Hut, which is where you really started out. But what made you leave a Proctor and Gamble, which is the premier package goods company in the world, and go to a brand like pizza, which is, you know, the leader in the pizza industry. But you know, it's not Proctor and Gamble in terms of prestige. It was one of those things where I feel very fortunate. I had my first opportunities at P&G, some of the best people I got to work for work with. But I'll tell you what, David, it was because I met somebody like yourself. You know, when I got to the interviewing process and I met you, you know, one of the things that I got excited about was you're like, look, I'm going to give you a shot. I think you actually said is, I hope you're as good as you say you are. I think that might have been the line. I think that might have been the line you use with me. And I was like, you know what? I like that challenge. I think I am. I think actually I've got even more in the tank. Look, you opened the door for me to test out how good I really could be early in my career. And I probably wouldn't be in this job, frankly, right now if I didn't make that move then, and I found a leader like yourself that was willing to give me some opportunities throughout my time at young. I mean, frankly, you, Scott Burger and a couple guys leaned into me to give me some big opportunities. And, you know, that's what I was excited about. I mean, P&G was a great place, but it was one of those things where I had gotten to the point where it was a little bit of I had to play the waiting game. And, you know, I was probably young and naive. And I was like, I don't need to wait. Like, give me the next challenge and, you know, look like I came across a leader like yourself. They was like, Oh, I got a challenge for you. You know, come on over. Well, you did a great job at Pizza Hut and you were really in line to become the president of Pizza Hut. And we had a problem at Taco Bell and you were already the general manager of Pizza Hut. And, you know, it was pretty clear you were next up. And I came to you and said, you know, Brian, I'm wondering if you go out to Taco Bell and run marketing for us. You know, it was a step down in the organization, but you said, throw me in, coach. What was in your mindset as a leader that would make you do something like that ? My ambition was to ultimately be, you know, a CEO of a company. But I was like, a lot of people had told me early on in my career, don't expect it to be a linear path and take the opportunities when people present them to you. If you think it's an opportunity, you can make a big impact on. And I think I told you, David, like, I would love to get my hands on that brand. I thought it was, and I still believe it is a great brand. Serves a very unique purpose. I was flattered that you'd asked me to go do it. So I was excited about, Hey, you know what, I prefer to go be the general manager of president, Taco Bell right on the gate. But if this is the path, I have to go down. I'll go down that path. And I was truly excited because I felt like I could make a big impact and make a difference. When wasn't that you had this aha moment when you said to yourself, you know, I really want to be the head of a company. When I was at Proctor and Gamble and I got promoted to brand manager, I liked the idea of being able to work cross functionally. Well, I also learned there too. It's like, look, I'm in the right place. I want to be in a consumer facing business because I love trying to figure out what motivates people to buy my item. How do I make them fall in love with my item? And I think you had a great line. It's like, what have a perception belief for you trying to build change or reinforce? I wish I would have picked that up earlier in my career because I didn't have it so elegantly figured out on how it's going to tackle these issues. But it was probably when I first became a brand manager. My first brand manager assignment was on thermicare, which was a new product. And I just fell in love with the idea of working on a team, leading a team, and trying to figure out what is the unique reason why my business should exist and have the right to earn people's business over and over again. And that just really turned me on. You've always been a person that was on the fast track. But what was the biggest bump you had along the way? You know, that first brand manager assignment on thermicare was a lot of learning. You know, it was a smaller initiative that had struggled. When we launched it, it did OK. It didn't do great. It did OK. And, you know, it was the first time I had done something where I was like, man, this isn't going great. It's just going OK. Luckily, you know, I was surrounded by some really great people at the time, the general manager of the category was Tom Boleyn. And I remember talking through it with him and he made me realize I wasn't in on it alone. This is a collective effort that we're going after it. You're perceived as the leader here. But as part of the leader, you got to recognize what's working, what's not working, and then figure out how we make the best out of the situation we have at hand. And that was probably the first one where bumped into me that the second time it was really tough was I was at Pizza Hut. And, you know, that's when the whole kind of world seemed like it was ending in 2008 , 2009. It was really tough because it was going to be the first time we weren't going to make our plan. I took a lot of pride in making the plan. I wanted to not only make it. I wanted to exceed it. That was tough. And actually, that was another example. You know, I don't know if you remember this, David, but you came up to me put your arm around me and you said, Hey, look, I know this wasn't the year you wanted. And I know you believe you can do better than this. But, you know, I got your back. It's like, you're going to get through this. You're not in it alone. And that meant a lot to me. You know, those are kind of two critical moments where I've kind of remembered like, even when it's not going right, you've got to remember to put your arm around somebody and say, Hey, we're going to get through it. You know, Brian, when you move into a new position and then you have a new team , how do you get people to believe in you as a leader? What's your process for that? And what would you recommend to others? That's one that I've had the opportunity to do a couple times now. And, you know, the first thing is take the time to understand who these people are. Before you start telling them what you want them to go do or what you believe we need to go do, I invested the time to find out who they are. What do they believe? What do they think isn't working, not working? And, you know, listen. And then once I took that knowledge, you know, I came back and said, all right, gang, you know, I've had the opportunity to meet everybody. And here's the one thing. If you're here, it's because I want you on the team. If I had asked you to leave, it's because, you know, you're weren't going to be the right fit for this team. But I've decided you're the right person for this team. I believe in you. Hopefully you believe in me. Let's lock arms and do this. The other thing that I find is you got to take and these are been cases where I've walked in and it's a little messy, right? Like, maybe it's not going great. And there's a lot of projects people are working on. How do I pick the one or two things that I know we as a collective team can make a difference right away? And at Chipotle, that was digital ordering. We went all in on making these digital make lines, mobile pickup shelves. And that was like the one thing that we went after. The other one thing we went after is we're going to execute operations and culinary with perfection. It's like, these are the two things we're going to do. At the same time, we hired some other people and I said, look, from a marketing standpoint, I want us to be relevant. I want us to be on our front foot. And I want us to be talking about what makes people love us. And it's like just getting very specific. Like, what are the one or two things I need out of each of you as leaders? And then collectively sharing the obligation to achieve those things is what I've done. And it appears to be effective. Talking to Brian is clear. Every leader needs to know how to create a culture where big ideas thrive. As the CEO of Snap and the guy responsible for building Snapchat, Evan Spiegel knows a thing or two about big ideas. Evan was one of my very first guests on How Leaders Lead. And I love what he has to say about fostering innovation at Snap. There's more and more research that shows that we are all inherently very creative, but that our fear over time overrides that creativity and actually inhibits us from expressing ourselves, inhibits us from sharing our new ideas. And so I think a lot of leaders are very attuned to this phenomenon and are very focused on trying to make sure people do feel comfortable that they don't feel afraid of expressing their ideas because leaders are always in search of great new ideas. So I do think there's a focus on that. And I think more and more, especially as our work lives and our home lives, you know, there's really this feeling of the need to bring your whole self to work. And that's something that we really want to support at Snap. And we do through things like Council where people sit together in small groups and take turns sharing how they feel and listening to one another. And I think that's another thing that helps people feel appreciated for their own unique abilities and their own unique points of view. And that brings out the best in our talent. Go back and listen to my entire conversation with Evan Spiegel, Episode 3 here on How Leaders Lead. When you share a story where you kind of raise the bar for the team and, you know, how you push them to go to a higher height. Coming out of COVID at Chipotle, I can speak specifically to Chipotle on this one, we had navigated it fairly well. We come out of it okay, but you want to know something? We were not operating up to our standard. It was that simple. Like, I'd go into restaurants, we'd be out of chips. I would go into a restaurant near closing, we'd be out of chicken, rice. And, you know, we were still performing, but we weren't performing where we needed to be. And one of the key metrics we have here is throughput, like how many transactions can you get done in 15 minutes? And that was another place where we were way off of where we should have been and what we're capable of doing. And I literally, this is kind of a funny thing, you'll appreciate this, David. I went to our team director meeting and I said, "Hey, gang, I am here to tell you we are not succeeding. I get a report every day that shows me how many restaurants don't have chips." I was like, we collectively should be embarrassed that we have a report telling us when we're out of chips. Like, we're a Mexican restaurant. When was the last time you went to a restaurant and they didn't have chips, right? And so, fast forward a year later, I had that same TD group here and I said, "Well, gang, you know, the good news is you got your shit in order, okay? I'm not going to talk to you about how we don't have chips." And we've hit what our standard is. We have our food in place. We have our performance in place. We still have opportunities to be better on throughput, but from a culinary, a people standpoint, we are so much better than we were a year ago. And this was talking to an audience of people that were all really good operators. It was just like we had made way too many excuses for too long and COVID gave us the ability to provide those excuses. And it's like, "Hey, it's time to put those aside. Let's get back to the standard of excellence that we know we can hit." And I'll tell you what, the guys were super energized. They took it to heart and, you know, to their credit, I think we're performing much closer to what we're capable of doing. We still have some opportunity, but it's never easy to do, but every once in a while, they respect you for recognizing we're not hitting the number. Well, I got to tell you, I like those chips and they're always there when I go to Chipotle. And you did an incredible job at Taco Bell and really got that brand turned around and moving forward when you're running marketing, then you ended up being the CEO of Taco Bell. And then you were recruited away to become the CEO of Chipotle. And when it was announced that you were CEO early in 2018, the stock jumped 12%. How did that make you feel? Well, on the one hand, it was pretty awesome to see. On the other hand, I'm like, "Oh, my God, here we go. I better deliver." So, you know, it was exciting to see. You always hear feedback like, "Hey, people are respecting the work that you're doing." And it was a signal that, you know, what people recognized the work that I had accomplished. So, on the one hand, I was a huge compliment on the other. I was like, "Oh, man, I got to get to work. There's work to be done." So... Did you take some time and reflect when that happened and really map out a plan in terms of what kind of CEO you wanted to be? Because, you know, here you are now, you 're heading towards the Chipotle restaurant supports that are, "You're going to be the guy. What kind of CEO are you trying to be?" I want to be seen as a CEO that isn't afraid to make the decision when you need to make a decision. The other thing I want to be seen as is, hopefully, people believe I am developing our future leaders. In the process of making those decisions, I hope I'm teaching people how I made those decisions and that then they can step in behind me and make as good a decision, if not a better decision, if I wasn't in the room. And that's what I'm after. You know, it would really delight me to see people be successful leaving here, not that I want anybody to leave Chipotle, but if they leave Chipotle and they go somewhere else, I want to see them be successful and hopefully I had a role in them achieving their success. And, you know, the other thing I wanted to be seen at too for Chipotle is I wanted to be seen as somebody that can grow a business. Like, I want to be known as like, "Hey, I can turn this around, but I can also grow it. That's growing people. It's growing the business. It's growing the economics." Those were the two missions I was after is like, I want to be somebody that gets people set up for success and then demonstrates that I can achieve that success in the business that I'm responsible for. You hadn't worked with Wall Street up to that point, other than making, I'm sure some, you know, analyst presentations on behalf of Taco Bell, but you weren't the guy in charge of really driving shareholder value. And how did you get up to speed just in terms of, you know, working with Wall Street? That was one of those things where fortunately, I had a bit of a network of people that I could reach out to and be like, "Hey, I'm getting ready to do my first kind of investor conference. I'm getting ready to do my first meeting with these individuals. What do you recommend?" And we also had some guys on our board that were pretty good with Wall Street as well. People were very generous with their time, David. They were willing to give me their insight into how they managed Wall Street. And in some cases, some of these folks worked on Wall Street and said, "Hey, look, this is what I would love to see from a CEO in these meetings." And I had to establish credibility first and foremost. So they're like, "Make sure you're transparent with people on where you are and where you see yourself going on this journey." The first couple meetings I had, you know, people were like, "Do you really think Chipotle can get back to $2 million plus unit volumes? Can you get back to mid-20% margins?" Because at the time, we were sub-2 million and margins were kind of more in the mid-teens. And I do. It's not going to happen tomorrow, but I believe there's a plan and a process for us to get there. And, you know, here's the four or five things we're going to do to make it happen. And, you know, like I said, I was very fortunate because what folks told me is don't be in a rush to tell them everywhere you're going to get to make people understand the process or the journey that you're going to have to get to 2.5 million, 3 million. Like today, we're at 3 million average unit volumes and 27% margins. And, you know, we're going to build close to 250, 300 restaurants this year. So we've come a long way, but luckily people were very generous with me on their time and saying, "Hey, pace it out." I think you might even said, "Have some sober selling." That might have been one of your lines. Yeah, it was, you know, but I got it from somebody else. So, you know, it's good to pass that on, you know. And one of your big shareholders is, I understand, is Edgew ood, which is run by Alan Braid. He's a big-time growth investor and very, very talented. When you walk into an office like that, what's your elevator speech on why you should own Chipotle stock? I always start off with the fact that the growth is just beginning. There's kind of a funny little line. I'm like, you know, if you could find a company that's going to build 3,000 restaurants, you know, have $4 or $5 million average unit volumes and call it 30% margins. Would you want to invest in that? And, you know, everybody's like, "Of course." I said, "Well, that's what we're going to do. That's the next 3,000 Chipotle's we're going to build." So today we're at 3,000. So I think the next Chipotle is Chip otle. And it's all driven on this idea of growth and then simplicity of our execution , which is, if we get great throughput, great culinary, great people, there's no stopping this engine. Now we have to surround it with great digital, great marketing as well. It's just a really simple idea that, you know, we can double this business by staying focused on what makes Chipotle Chipotle. You've alluded to a little of this, but tell us about the business you inherited and what you have today. You know, when I first got here, you know, I'd say the organization was a little bit on their back foot. You know, they had had a couple of missteps, had a lot of ideas floating around in the organization on what could be better for the organization. But we weren't, I'd say, following through on those ideas. And we didn't pick a lane on one or two of the ideas to go really big and go after it. And so that was one of the things I wanted to do is make sure that we picked critical few items. Once we picked the critical few items, it was like, "Do we have the structure to go make this happen?" So, I mean, this is classic things you used to talk to me about all the time, strategy, structure, now execution, right? When you looked around the structure, I was like, "Man, we don't have some of the experts that we need in these areas to fulfill our ambition or our strategy." And so we had to make some changes. And we need to get a great supply chain leader. We needed to get a great marketing leader. We needed to get some additional digital capability. We had a terrific digital leader, but he needed additional capability with them because we're going to grow this so much. So it was taking the time now to invest in having the right people in the right positions so that we could execute the strategy. And then look, we held ourselves accountable. It's like, now we're going to go execute against these things. And I'm happy to say, you pointed out, when I started, I think our market cap was right around like six or seven billion. And today we're over 50 billion. For the most part, my team is intact. We've only really had one person transition. I think that's a testament to the strategy, it's a testament to the people believing in the strategy. And then I think, hopefully, it's a testament to the culture that I've created around this organization and the values that we have. Now, as I understand it, you took over for the Chipotle founder, Steve Ells. Did that put additional pressure on you? How did you manage that transition? And that's not an easy thing to do. A lot of times people really have challenges following a founder. First of all, I got to tell you, Steve was great through the whole process. I mean, I'm sure it wasn't easy for him. But one of the things he told me was, I don't want to be the CEO, I want you to be the CEO. I'm here to support you how I can. He was very true to those words. And I'm very grateful for that, because you've seen a lot of these examples where it doesn't work that way. And then the other tough spot that a lot of people identified when I was contemplating doing this is, we had a big activist investor in Pershing Square. And it was Bill Ackman. And a lot of people were like, oh, be really careful. And I got to tell you, that was another place where I spent the time making sure that they bought into the strategy that we were going down . And we ended up being some of our best board members and frankly, biggest advocates for the strategy that we've gone after. And to this day, Bill and I still chat. And he's a huge advocate for the company and the brand. And Steve and I still stay in contact. And I think he still is a big advocate for the brand. You know, there was one of those things too, where I was also very upfront with Steve, like, what he created, I think is really special. You know, I mean, the fact that he created Chipotle and took it from one idea, one restaurant to, you know, at the time we had about 1,800 restaurants, unbelievable success. I wanted to learn as much as I could from them. And then I wanted to add value where I thought I could add value on making the company hopefully better and not lose the essence of what Steve had created, which was great culinary done really fast. You know, you move the restaurant support center from Colorado to Los Angeles, you know, that had to be a tough call. What was it that drove that decision? And how do you feel about it today? It was one of those things where we needed a complete resetting culture. And we also needed a reset and some people capability. At the time we had offices in New York, Colorado, and Columbus. When we made the decision strategically, we wanted to go all in on digital. We didn't want to lose one inch on culinary. Southern California was a pretty good spot for us to be on the forefront of both culinary and tech. And so it was a hard decision. I 'll tell you what, one of the hardest meetings I had at Chipotle was when I had to stand up in front of the Denver office and let them know we're closing the office. And not everybody was getting the opportunity to move with us. But what I was happy about is the people that we did offer the opportunity to make the move, they made the move. And I think it's paid out really well for them. And I think they're really proud of what we've accomplished. But you know, it's always hard when you got to impact people's lives and you hate those days. But that's part of what comes with the job sometimes. Tell us about the culinary center you have at Chipotle and the most exciting thing you're cooking up over there. Oh, yeah. So we call it the Cultivate Center. We've got a lot of, I would say, really talented chefs working on really terrific food. Right now we've got Carnegie Asada out. Actually, one of the biggest complaints about our Carnegie Asada initiatives, we took away chicken al pastor, which is kind of funny. But these guys are super talented. They're always working on, you know, really exciting flavors on kind of the proteins that we 're known for, right? Chicken, steak, it's really delicious. We've got some desserts that are a lot of fun that they're working on and also some drinks. We do things under this tractor beverage umbrella. That's pretty exciting. But I can't give away. That was one of the things the guys told me. They said, Oh, no, you're talking to Novak. Do not give away all the things we're working on. I'm like, all right, I won't. I won't. I won't. Curiously, I called the culinary center, made a mistake. It's the Cultivate Center. Tell me what's the thinking behind that? Because I know you always think pretty hard about what you want to, how you want to communicate things. I'm glad you picked up on that. It's very purposeful because this is where we cultivate our next generation of ideas and whether that's equipment, engineering, store design, menu, or even ingredients, David. It's like we're doing work on cooking oils. I want this to be about cultivating what is next. And we have a purpose at our company, this idea of cultivating a better world through food with integrity. And the way we can do that is we partner with others. That's the other thing too. It's a symbol to other folks too. It's like, look, if you bring your external idea to us, we can help you cultivate that idea. Doesn't just have to be our own internal ideas. We love external ideas to help cultivate those ideas as well. So it was purposeful. It's pretty amazing when you see what goes on in the facility from robotics to carne asada. What the heck is food integrity? What do you mean by that? So we have a bunch of principles on the way animals should be raised, a bunch of principles on regenerative farming. It really is our approach to how we think you end up with the most delicious, nutritious food done in a responsible way. So you leave the farm, hopefully in a better place, then you inherited it. But it's all centered on you want delicious food that hopefully is done the right way so that those that touch it are better for it. Makes a lot of sense. Walk me through what you referred to earlier. You call it your stage gate process. What is that? It's a simple process where we take ideas from concepts to ultimately in the restaurant. And we want to have measurable KPIs along the way. Obviously nothing really happens until it hits the restaurant or it hits our website or hits the app. Those are the moments of truth for our business. I have this value which is the line is the moment of truth. And those lines are the website, the app, and then obviously the physical front line in our restaurant or the digital make line in our restaurant. So what this does is it's just a orderly process to take ideas, vet them, see what works, what doesn't work. Sometimes it starts out as something and it ends up being something else because we learn our way through it. And then when it gets into the restaurant, we use our team members to give us the feedback so that we can take it from one restaurant to 10 restaurants to then 100 and then ultimately roll it out across the system. I remember you telling me, you know, just there were some close-in opportunities when you first went on board. And one of them was K so here you got Chipotle and they really didn't have any K so which you know you were kind of amazed by. But you got into that into that game. What was the response and if you're going to describe your K so business today, what would it be versus back in 2018? You know, it's grown dramatically. So I got to give a credit to our culinary team because I think the K so is outstanding now. It wasn't dialed in when I first got here and as a result, you know, it was less than a hundred million dollar business. Now it's a couple hundred million dollar business and not quite as big as our guac but closing in on it. And you know this, it's like it's got to be delicious. If it's not delicious, people won't crave it. And I think our chips have that craveability. I think our K so has that craveability, our chicken, our guac, you know, and then there's other areas where I think we could still be better. We're always going to be working towards making it more delicious when it becomes more delicious is when we see more business and that's what happened with our K so. How do you respond when you introduce something that's less than ideal? Maybe your K so the first time out of the box. How do you get the organization to respond to what the customer's telling you? Great example is we did something a year ago. It was called garlic guigio steak. You know, this is a great case of we didn't actually roll out what we tested. So when we tested it, it was at a certain price point. All that inflation hit, so and so forth, we ended up rolling it out anyway and we just raised the price higher than what we tested it at. And it didn't perform. We had some trepidation on the name because garlic guigio steak say that three times and it was hard. I was pretty impressed when you did it the first time. I don't think I could have launched that product. I had never pronounced it. Yeah. Well, and we saw it too. It was funny. Like when we launched it, this was kind of an interesting learning. People were having problems searching it on the web. So like one of the things like carne asada, bang. People have no problem searching for carne asada. Garlic guigio steak, a little bit harder. And so look, we learned from it. We're like, look, the product tasted great, but we priced it incorrectly and we probably named it incorrectly. And as a result, it didn't perform as well as it should have. And we've learned from it. You know, it's like we won't do that again. And as a matter of fact, even today, we were just doing a little post mortem on this of like, why do you think carne asada this year is outperforming garlic guigio steak so much? And I think this is a hopefully a part of my leadership style, which is, look, it wasn't as successful as we wanted to, but we don't have to beat each other up over it. We can learn from it so that we're better the next time. And I think we are all hell of a lot better with this carne asada because we learned from that garlic guigio steak initiative. Have you ever wondered what David is thinking as he interviews our guests each week? Or have you been interested in hearing David's take on some of the questions that he asks his guest? Well, I do. And I know a lot of you do too. My name is Koolah Callahan and together with David, I host the three more questions podcasts that airs every Monday. These episodes are just about 15 minutes and in them, I asked David three questions that dive deeper into the themes of his episode with his guests. David shares incredible insights and stories from his career leading young brands and all of his answers are super practical and inspiring. Like this great insight, David shared and one of our most recent three more questions episodes. Everybody is talking about the importance of a leader being vulnerable, being open, being transparent, sharing how they got to where they are. And you know what? I couldn't agree more. You know, when I taught my taking people with you program at young brands, the stories that people love to hear the most was not how I got to where I was and all the great things that happened. People know how you got the results and all the things that you've achieved. They don't know when you stumbled and what you learn from it. So when I told my stories about Crystal Pepsi or solar shades or whatever the hell it was , when I told those stories where I actually really didn't knock it out of the park, people loved hearing those stories the most and they loved what I learned from it, what I internalized from it that I could take forward as a leader and get better at every single day. Get the three more questions podcast and your feed each Monday and dive even deeper into the episodes you know and love. Just subscribe to How Leaders Lead wherever you get your podcasts. Would you win to Chipotle and followed a couple of really tough food safety issues that can really put the brand on the mat. And frankly a lot of people had real questions as to whether Chipotle would ever ever come back from that. What has that experience taught the organization and what are you doing today that maybe you might not have done you know 10 years on that front. Yeah look I mean obviously any organization needs to be resilient right. The good news is we've got resilient leaders in this company but the other thing too is it's like a lot of people were pushing when I first got here they were saying hey why don't you just freeze the food. You know you can do all these things off site that would take care of some of these risks that come with dealing with fresh food and I was like look if that's what we have to do then we've lost what Chipotle is and this is a great example if I went and hired what I thought was one of the best people in food safety and her name's Carrie Bridges she was at Walmart considered one of the best in the industry I said hey Carrie here's the deal I want to be the world's best food safety culture and food safety program and you're in charge and I'm going to support you any way I can but you know a heck of a lot more about this than I do I want to be the best I don't want to just be good I want to be the best and luckily she joined us and I think you know she's making us better every day and I believe we're one of the best when it comes to handling fresh food. What do you find more motivating the fear of not getting something done or the joy of winning and what really drives you? I definitely have an element of a little bit of paranoia that I do everything I can to prepare myself for the best possible outcome I remember my first earnings call as the CEO I mean I was up late reading the materials and I was up early reading the materials again because I wanted to be you know not just a little prepared but over-prepared and you know I'm into my six year of doing this and I still probably over-prepared for some of these moments but it's like I think it's really important to be prepared so that you can ensure you got your best effort and the thing I worry about most David is like I hate leaving something if I didn't give it my best effort it's like and the only way I know how to do my best effort is do everything I can to be prepared and it's like that's what gets me anxious it's like have I done everything I can to be prepared for this am I am I walking in with my best effort the outcome is going to be the outcome but I'll be critical of myself if I think like I could have been better if I would have just done X and it's one of those things that drives me. So your stock goes from seven billion dollars to over fifty billion dollar market cap has that created any joy of winning that you know you can sit back and how do you celebrate it as an organization. Yeah you know look we've definitely find the moments to celebrate too I had the whole team together to celebrate our results about a month ago because we've all gotten past kind of this five year mark you know I'm lucky I've got a great group of people I love spending time with them they love spending time with each other and we have a lot of laughs and you know it is one of those moments so every once in a while I like I pinch myself I'm like gosh you know I knew we could do a good job but I'm so delighted with where we are and I had a meeting with all of our directors and above and I literally told I was like you know this is the first time I'm in a I've been in a room where every person's a millionaire I'm a little intimidated and it was pretty cool you know it was really cool to see that and you know people's eyes just light up and you know when you even go all the way down to like the store level you know people tell me they sold their stock and they bought their house and I'm like how cool is that you know so don't get me wrong I have the opportunity to celebrate and you know we've got a toast well that's a great thing to see your people do well I remember going to Walmart and the guy that picked us up at the airport was a millionaire because he'd held the stock for so long and you know they had a little sign up that said today's stock price is X tomorrow's up to you as a leader you got to get people fired up about what you can be how do you constantly work on presenting that vision yeah look this is where we really use our purpose around this idea of cultivating a better world I think that has people truly energized because we believe we're making a difference on the the food people have access to and the way that food is grown that's a big deal and as a result we've created what we call the cultivate next fund where we're literally taking some minority investments in a lot of up and coming technologies a lot of different robotics different farming techniques different ways to fertilize and so I think people are genuinely excited about this idea of hey we 're going to make a difference in this world we're going to do it through food but you know when a chipotle comes to town usually we create a lot of great job opportunities but with it people find out that there's more to us than just the burritos that we make or the bulls that we make and you know I think that purpose is what captures people's hearts you know the stock price and the financial performance probably captures their minds but our purpose captures people's hearts you've always been on the forefront of digital marketing and that was one of the things that you really brought to Taco Bell what's the best practice that we can learn from your leadership on on just how to stay on top of technology and digital yeah look you can't be afraid to keep learning that's the biggest thing I say to folks is you know if you get to the point where all of a sudden you're saying you know what I don't need to learn that it's probably time to get out of the job or go find something else to do that gets you energized to have the desire to learn it really boils down to I'm a curious person and I like to learn new things and you know maybe it also helps I've got you know three younger kids that keep me on my toes you know my 12 year old daughter she is unrelenting so I've got to figure out how to keep up with her you know it's one of those things where you just want to stay curious and I like learning new stuff what I find is in these areas that you learn new things it sparks other ideas and you know then you can your curiosity can take you down that path how do you balance digital versus the mainstream television I mean what do you find is working best today well you know Chris Brandt he's our chief marketing officer and then we also have a great woman that runs media Maria and I'll tell you what they do a phenomenal job T ressi Lieberman was with our company for a while she actually she left us to go be the CMO over at Yahoo but these folks are pros and you know I give Chris Maria and the team a lot of credit because they're always testing they're always trying to find what is the next thing around the corner for how we best can communicate to people I think if they were here they tell you live sports is one of those things that never gets old you know they're constantly experimenting in the digital space I don't think it's it's a one stop solution in the digital space it's very fluid there but when it comes to the mass market I don't think anything trumps life sports David your voice been a customer advocate I mean you love listening to customers learning from customers do you have a story that you tell the team members that really drives home the importance of being customer focused yeah I do and actually the guys tease me about it because I guess I've said it too many times so when I first got here when I was visiting restaurants I'm like hey what are some of the things you guys here and one of the things they heard was why can't I get a large quack why is it I there's only this small size why can't I get a large and you know I was like you know that's a great question why don't we have a large quack the joke is you know I turned around I left the restaurant I was like we're putting in large quack and you know it was partly I wanted to make the point that one we're going to listen to the customer we're going to listen to our team when they give us feedback because our guys were doing large quack they were just using I think it was the queso cup and they would charge people too small and I'm like that's ridiculous why can't we put a button into the restaurant that says large quack and just tell everybody we have large quack and so we got it through and the guy still teased me because they'll be like hey we just launched carne asada probably not as big ideas large quack but we listened to the customer on this one I'm like fair enough fair enough but I do tell the story because I'm like hey you guys got to let us know what's happening in the restaurant and what is the customer saying at that point of purchase and then we got to take action on it when it's feasible and we can do it right it's been so much fun catching up and and I want to have some more with my lightning round of questions are you ready for this yeah let's do it all right what's one word others would use to describe you I would say passionate what would you say is the one word that best describes you I care a lot who would play you in a movie oh that's easy Tom Cruise you you wish top gun one or top gun two what's your favorite top gun one come on man I feel the need for speed David there you go if you could be one person for a day beside yourself who would it be you know I would have liked to have been John F Kennedy for a day what's your biggest pet peeve oh when people don't give you a straight answer what's a secret menu item at Chipotle that people need to try well it shouldn't be a secret but it I don't think many people realize we have Barbacoa and how darn good it is a Barbacoa quesadilla will change your world where was the last time you dressed up as a burrito for Halloween that was probably two years ago me and the dog were burritos now I know you love learning what's the coolest thing you picked up recently that you're applying to the business most recently it was probably in regard to our operations you know specifically on how we deploy people for great throughput so we have these cameras that are in our restaurants and what we discovered is when the expediter gets out of position we like lose almost like 30 percent of our speed and to see that on film and see that in action it was illuminating it's it's like now I'm like a heat-seeking missile on this thing I 'm like do not let the expo out of position I love it if I turn on the radio in your car what would I hear you'd probably hear Morgan Wallen what's something about you a few people would know probably not many people know you know I actually really love photography and I can do it back handspring I didn't know either one of those and I've known you for a long time all right we're out of the lightning round now and that was a really good job you know I guess got a few more questions to wrap this up you've got this chipotle Cultivate Foundation tell us about it and what you're really trying to do this is one that we're really excited about it it centers on supporting our team members you know whatever their passions are if folks want to volunteer we set it up so it gives them more visibility to get additional people to volunteer with them if it's a program they want to contribute to we contribute with them and so I think it's really important to get back and what we try to use with our Cultivate Foundation is to get back to our communities through our team members and you know it makes a big difference and I'll tell you what those are some of the best notes you read after people participate in it or we support somebody in what is a really passion project for them do you have any international ambitions for Chipotle yeah we do we're just getting started David you know we've got some restaurants in London Paris and Frankfurt and we just did our first deal with the al-Shaayah group for the Middle East so we'll be opening our first partner restaurants actually in 2024 in Dubai and Kuwait but we're early days nothing quite like the global empire you built we're in the process we've gotten pretty good feedback people like chicken rice and beans pretty much all around the world that is true you know you and your wife Jennifer you have three wonderful kids and how do you apply all that you know about leadership at home I say this all the time the most rewarding job and the toughest job is being a dad and a husband but uh you know it's super important to me and you know the one thing I've learned over time is luckily you know Jennifer is an ace I married the right person to keep me you know grounded on what's important she does a fabulous job of keeping our family together and you know we use our Sunday dinners David as the time where everybody shares and hopefully you know I give some feedback I get a lot of eye rolling when I give that feedback but uh you know for the most part I'm really fortunate our kids are great kids they want to do the right thing and I have the saying to them all the time PMA positive mental attitude and I'm like look guys if you can just take a positive mental attitude to whatever you're tackling you'd be amazed at what the outcome can be and even if it's not the best thing to work on right now if you take a positive attitude to it turn lemons into lemonade if they don't remember anything I hope they remember take a positive mental attitude to things well you may have just answered this last question but I'll go go ahead and ask it for you what's the single best advice you give to someone who wants to be a better leader put in the preparation and take a positive approach to it and then you got to believe in people to execute you know if you don't believe in people to get the job done you don't have the right people and you aren't leading the right people you got to have a positive attitude you got to be prepared and then you got to believe in the people that they're going to do it you know if you believe in them they believe in you and usually you get to really good outcomes you know Brian it was a very sad day for me when I learned that you're going to Chipotle from young brands because I always and still do have such great admiration for you but you mentioned earlier that you you love seeing people when they do leave Chipotle go off and be successful the success that you've had and the power of the Chipotle brand and where you're taking it you know really gives me a great deal of pride and just knowing that I had the opportunity to work with you and to see you grow the business and grow yourself and I want to thank you so much for taking the time to be on this podcast with me meant a lot. Hey thank you David and like I said I probably wouldn't be in this position if you didn't give me the opportunity you gave and you're a great coach too so I'm very fortunate our paths crossed and I'm fortunate you believed in me so hopefully I'm paying it forward. Well Brian is doing a heck of a job at Chipotle and I got to tell you it's so gratifying to see how a leader I invested in continues to grow and succeed and even more importantly how he's continuing to develop more leaders. I'm telling you that's what it's all about you know sometimes when we think about leaders we think about the quintessential big idea person the Steve Jobs visionary type who's always dreaming up the next big thing or we think about the execution person the one who's going to rally the troops and get things done but I hope this conversation with Brian shows you that you don't have to be one or the other. Brian has found his own compass what he does is he looks for the right ideas and then focuses on executing them and he sees that is the key to the overall success at Chipotle. He doesn't have to come up with every idea and he knows that he's not going to be the one that's going to execute the idea but he knows he's got to bring it all together as a leader in some way shape or form and that's a powerful takeaway for anybody who wants to be a better leader. This week I want you to take a look at the way ideas in your organization or on your team turn into reality. What's the process? What kind of structure do you have to find and test and implement those ideas? Take a quick assessment and I bet you'll find a few opportunities to improve the way you turn ideas into reality. So do you want to know how leaders lead? What we learned today is the great leaders follow through on the right ideas. Coming up next on how leaders lead is Dan Hurley, the head men's basketball coach of the Yukon Huskies who in case you forgot are the reigning NCAA Champs. The secret sauce for us is how hard we practice and how intense the environment is. We try to make our practice sessions chaotic. There's no fouls called. There's no water breaks. It is the most intense and the fastest-paced thing and the most stressful experience that our players will go through. So I think when they show up on game night, the secret sauce is game night feels a little bit slower and a little bit more comfortable. So be sure to come back again next week to hear our entire conversation. Thanks again for tuning in to another episode of How Leaders Lead where every week you get to listen in while I interview some of the very best leaders in the world. I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader you can be. 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