Scott Boatwright 0:00 

One of the most underrated interventions in business today is removing complexity, and oftentimes, when we find ourselves with an imbalance in a restaurant, the root cause isn't always about employee capability, it's about operational complexity that we've added that limits performance. You

David Novak 0:28 

You ever wonder how a great team of people working on a great product can still underperform? Welcome to how leaders lead. I'm David Novak, and every week I have conversations with the very best leaders in the world to help you become the best leader that you can be. Today, I'm sitting down with Scott Boatwright, the CEO of Chipotle. He joined the company back in 2017 as Chief Operating Officer. So believe me, this is a guy who knows everything about this business, right down to the recipe for their secret sauce. Now, I'm sure you know, Chipotle serves millions of customers a week. They have to move fast, scale big and stay consistent, all while delivering on their main promise of quality. That's why Scott is all about operational excellence, as you'll see for yourself today, when something's off, he doesn't just come in and point fingers at people. He looks at the system behind it, because he knows what all leaders know. When you remove complexity, you unlock performance, and this conversation is full of ideas to help you do that in whatever industry you're in. So here's my conversation with my good friend and soon to be yours. Scott Boatwright,

you know, in sports, Scott, there's this, there's this that saying that it's next person up, next man up, next woman up. You know, you got to get ready when your number is called. You got to be ready to go. Give me a peek into how this relates to your world in the past six or seven months.

Scott Boatwright 2:05 

Yeah, David, as you know, I joined Chipotle in 2017 and the brand was in a pretty tough situation as it related to what was going on within the brand. We had grown very quickly as an organization, and what I found was a pretty sizable operational challenge here at Chipotle. Fast Forward, David, I'll spare you all the pain of how we navigated a challenging time for the organization, but I worked alongside Brian Nichol, who's now over at Starbucks, for the better part of six, seven years, and he stepped away from the brand back in August of last year, and I was able to take the opportunity to be the CEO of this great organization,

David Novak 2:46 

and you were the chief operating officer for seven years. And you know, his number, number one partner. And you know, as I understand it, you know, well, everybody thought you were the man for the job. The board felt it was their, their duty to go outside and look outside as well. You know, how did you feel about that? Scott, I mean, you'd paid your dues and you're ready to go, and you're in the job now. But how did you feel about it then,

Scott Boatwright 3:12 

yeah, as you can imagine, David, I'd be kidding you or not being honest if I told you it didn't come with great trepidation, great anxiety, you know, trying to navigate. You know, would I ultimately win the opportunity to lead this great brand? Because there's so many talented people within this industry and outside this industry that you could choose from. But here's what I'll tell you, it was very rewarding when I was ultimately given the opportunity to be the permanent CEO, because I was put up against what I believe to be the very best and brightest across industry, and I still won the opportunity. So, you know, obviously very challenging going through the interim process, but very rewarding once it's ultimately, once you ultimately get the nod. You know, I think

David Novak 3:56 

all of us, or a lot of us, have been in that Limbo period where, you know, a job's up. You want to get the job, but you have to wait a little bit before you really get the nod. What did you learn about the best way to handle that Limbo period? You know,

Scott Boatwright 4:10 

I talked to quite a few mentors that I've had for the last probably 30 years or so. David on, how do I not internalize the moment, make the most of the the moment, and lean into the position as if I already held the position. David. And so, you know, I wasn't going to give the board an opportunity to go a different direction. I was going to give them much to think about for me to be in the permanent seat. And so I approached the job with all the Vim and Vigor I could bring to the moment over prepared for engagements, whether that was media, investor relations or board management, as if I already held the opportunity, already held the job. And so I think that's an important note in those moments you can shrink to. Allow the moment to get the better of you and shrink to the moment, or allow your emotions to get the better part of you, or you can rise above your circumstances and really prove to people that you are worthy of the opportunity. You deserve the opportunity, and more importantly, you're the right person for the opportunity.

David Novak 5:17 

Well, you obviously, Scott, you know the business cold. You've been the chief operating officer for a number of years, and you navigated Chipotle through its toughest time. You had a couple of food safety issues. You know? What did you learn in doing that in terms of the best way to handle a crisis situation?

Scott Boatwright 5:36 

Yeah. David, so when I found the organization back in 2017 I found a company that had executives at all levels in the organization that were well intended, that still believed in the brand, but really didn't have a firm grasp on how to deliver on expectations. I don't think there was clarity in alignment. I don't think there was clarity in direction for the company. The company lacked a North Star, if you will, that people could rally behind the culture was fractured. People were second guessing their own abilities within the organization. And so it's in those moments when I think you have to get very clear about your expectations. You have to be very clear about where you're taking the organization. You have to really engage people's hearts and minds, David, as you know quite well, and really help them believe in themselves, even when they don't believe in themselves. Personally, not easy. David, it's hard work. If it was easy, everyone could do it. But it's it's an opportunity to lean into your people in the most meaningful way, create meaningful connections, challenge and inspire. Create clarity around purpose, create alignment within your operating business, your operating model, and then stay on message. And I think that's critically important,

David Novak 6:52 

you know, I knew as you well. Know I knew Brian nickel well, and you know he always went out of his way to compliment you and say that you were number one partner in terms of really turning around Chipotle. You know, when he left, he went to Starbucks. I think he was in every newspaper in the world for doing it. You know, the billion dollar man. I think their stock went up a lot. You know, you know, how much pressure did you feel having to follow that kind of performance, even though you'd done all this stuff together,

Scott Boatwright 7:23 

not a ton of pressure, David, more anxiety around the job. Change. It's a pretty significant transition, as you know, David, from a vertical function within an organization to now managing all those verticals as CEO. And you know, I think BCG summed it up really well in a piece that they did a couple of years ago around the modern company CEO, that said, the modern company CEO has to do three things really, really well. One was manage a great business. Two was manage a great stock. And three was drive organizational legacy. What is going to be your your mark on the business, you know, 1015, years from now, when you've moved on to do other things. We'll put that one on the table, on the side burner for a moment, and talk about the first two, because I think they're very important. The reason Brian and I were such a great tag team is I was able to run a great business. Brian managed a great stock. And so those are two very different job skills, but it's incredible. It's critically important for a CEO to be able to do both. And so for me, I had to move from running great business to now understand how to manage investor expectations and media engagements and media expectations. Thanks to Aaron Wolford, who you know quite well is across the table. For me, she helped me navigate those times you got to surround yourself with great people like that, and then also understand board management and be able to craft the narrative, your narrative around where you're taking the company, what your strategy will be, and then gain buy in, as you know David, which is critically important to your strategy, right? And so me making the transition from, you know, the step one to step two was, was a pretty sizable jump, but one, it's when you're thrown into the fire, David, you've got to figure it out. And you got to figure it

David Novak 9:12 

out quickly. Yeah, I'll get later to, you know, the legacy that you you hope to build as you as you take Chipotle to the next level, but you are in the process now of managing the investor community and doing everything you can to let people know why the stock's going to grow. What are the top three reasons why an investor should invest in Chipotle today? David,

Scott Boatwright 9:32 

I'll tell you full stop. Of course, I'm biased to this great brand that we're in. I think we've created such a point of differentiation or a competitive moat around this business that's hard to break into. Mexican has been a quickly growing segment of the restaurant space. Now. For many, many years, what we do is so unique and bespoke to our brand, I don't know that people can really come into or easily do what we do. The core competencies of this great organization, or core equities, I should say, are grounded in this, this food ethos around high quality, great tasting ingredients that are sourced through natural farming. No, you know, chemicals, additives, preservatives, no GMOs, no no growth hormones, no antibiotics ever. We have the best animal husbandry practices in the industry. We do what's right for the farmer, we do what's right for the environment, and we pay a premium for that, but our economic model at Chipotle supports that premium, and I think that's where the competitive moat is built around this business. And then David, we bring that experience to life with pots, pans, knives and cutting boards on stove tops. We're actually cooking real food in real kitchens with real people. We're able to do all I just said to you, David, and deliver that experience at a price point that I believe is still an extraordinary value in this industry. The average chicken burrito today is still under $10 and we are a 10 to 20% discount to QSR. We're a 20 to 30% discount to other fast casual concepts. So there's three things that we have that make us unique, and most brands strive for one or two, low prices, low competitive prices. We still have the best ingredients that you can source in the in the US, and we have extraordinary margins, and that's why, that's why you should invest in this brand. Couple what I just said with the fact that we have an extraordinary growth trajectory in front of us, we're going to grow the chipotle business. New restaurant develop over 9% this year. So we will build between 315, and 345 new Chipotle restaurants this year alone, and we still have extraordinary growth runway ahead of us, navigating to 7000 restaurants in North America, and then we can do sequentially more beyond our borders here over the next few years, and you

David Novak 11:56 

have cash on cash returns is like what we at yum brands used to have in China, but around Three years, if I understand it, right.

Scott Boatwright 12:02 

So we're generating, right now, a 60% return on investment for all new restaurants we build, David in year two. And so it's extraordinary.

David Novak 12:11 

That's very impressive, if anybody knows the restaurant business at all, you know. So let's shift gears here for a second, Scott, you know. And I want to take you back a little. What's the story from your childhood that shaped the kind of leader you are today?

Scott Boatwright 12:23 

You know, I'll tell you I grew up, and most people know this about me. I grew up in humble beginnings, two very hard working parents that, you know, we worked aggressively. My dad was a welder. My mother was a server in a local restaurant. My dad worked, you know, 10 hour days, often six, seven days a week. So if I, if I just, if I just package that for you. It was strong, family values, family commitment, incredible work ethic and and I think those are kind of the things that molded who I was as a young person, my brother and I, and then I fell into athletics. David, I got into baseball and football. I played football all the way through high school. I found such a sense of community within football and just organized athletics. But you asked for one story, and I'll tell you one that's important to me. I was in little league football. I remember our first game. It was my first game on a field, and at the end of the game, the coach rallies offense and defense together and hands out two trophies. David, he handed out one for offensive player of the game, and he held out one for defensive player of the game. And I did not win. I was the center on the football team. I did not win that offensive player the Game award. So when everything cleared out and everything was gone, I was helping the coach put all the practice equipment in a bag, and I tug on his shirt, and I said, Coach, I remember like it was yesterday. Why didn't I not win Why did I not win that trophy today? And he said, Well, Joe showed up every day at practice. He gave me 100% every day he was at practice, he supported his teammates, and then during the game, he put in the extra effort. When everyone else was gassed, he put in the extra effort and stepped up, and it's because of him, is why we won the game. That was a moment for me, David, where I understood how to win, how to win in athletics, and how to win in life, because I knew that that moment, as long as I put in the effort and I put in the time, I was committed to what we were doing, I'd win that trophy, and I would win it at every opportunity in life and every stage of life. I did win it at the next game, by the way. David, I didn't win it. I didn't win it every game. David, but I wanted the next game, and I tried to win it at every subsequent game I played.

David Novak 14:42 

Well, I'm glad you got that trophy. I think you'd still be, you wouldn't be sleeping at night, you know, you know, and you know you, you took that learning, and you obviously have a lot of confidence, you know, there's no question about that, you know, have you? Have you always. Had that and, and when you moved into the business world, you know, did you have it automatically, or is it something that took you a while to really build?

Scott Boatwright 15:08 

It takes time to build. David, I didn't have it originally. You know, I always second guess myself. Or often would second guess myself, my ability, my talents, you know. And often question, you know, someone smarter than me, how do I compete with them if they are smarter than I am? I used to have this expression when I was a young, young Scott Boatwright, that if, if I couldn't outsmart you, I knew I could outwork you, and so I would apply as much pressure as I possibly could to what I was doing and be intellectually curious, right? Be a good student and learn from those who you think are smarter than you, because you can learn so much from the people that you surround yourself with. And so confidence, David, in my opinion, is built over time. Confidence is built by getting results at the end of the day. Results lend you credibility, and the more results, the better your results are, and the more results you achieve, lend you the confidence to do more, and it opens up the aperture for the individual. It allows you to see farther, be able to lean in more, understand the business better, and continue to push yourself.

Koula Callahan 16:15 

Hey, everyone, it's Kula from how leaders lead. And if you've watched our podcast for any number of episodes, you probably know that a common theme from all of the great leaders we interview is that they are active learners. They have this commitment to continuing to learn and grow so that they don't stay stagnant and so that they continue to see success in their leadership and in their life. This theme of active learning is so important, and it's what David's latest book, how leaders learn is all about. It's all about helping you develop that skill of active learning so that you too can continue to see success in your leadership and in your life. The book is really entertaining. It pulls stories from some of our greatest podcast guests and pairs those stories with insights that you can incorporate into your leadership and into your life right away. Grab how leaders learn on Amazon or wherever books are sold. And I think you're really gonna love it. You feel David's personality through the pages and through his storytelling, and it's a really powerful way to level up your leadership.

David Novak 17:14 

Before Chipotle, you spent nearly, I think, almost two decades at Arby's before you know, what were some of the biggest leadership lessons you picked up there that continue to have an impact on you.

Scott Boatwright 17:26 

When I first started in at Arby's, it was a Franchise Group. At the time, it was called RTM, the company was results through motivation. A guy named Russ offenhauer started the company since he sold it back to Nelson Peltz, sold the entire company back to Peltz, who owned trike at the time, chark owned the Arby's brand. But Russ taught me a lot about primarily around this idea of goal setting and the ability to dream big and think beyond your current capacity. And I don't know that I'd be here today had not, had I not spent that time with Russ in that organization. At that moment, it was just the right the right time for me to be in that company. And I learned so much about his accomplishments through goal setting, his you know, his people, philosophy, his thoughts on leadership, probably wouldn't be sitting here today had I not had that opportunity.

David Novak 18:17 

And you were then recruited by Chipotle, by the founder of the company, Steve Ells, and now, as you well know, I mean, getting great talent is a premium, and everybody's really, really looking for it. What was it about how Steve presented the opportunity at Chipotle to you that that had you leaning in, that you try to remember today, when you're you're trying to bring in that next top person. I was

Scott Boatwright 18:43 

at a point where I was ready for a career change, David, I had just been passed over for the CEO, the CEO job at Arby's. The gentleman that took the job, he and I were competing for the job. He stepped into the role, which was a temporary setback for me, but I saw it as an opportunity, and he was, he was very qualified. He did super well in the job, and still a dear friend of mine to this day. His name's John Bowie. He's now, he's now running buffalo, Wild Wings, extraordinary individual. But I missed that opportunity, and I had to do some self reflection, right? I had to think through, hey, what you know? Why did I miss this opportunity? I asked lots of great questions. Had to really take a hard look at how I was showing up every day. I wasn't necessarily looking for something outside of the Arby's brand at the time, but I received a phone call from a recruiter that asked me if I'd be willing to have a conversation with Steve Ells. So it was the right moment, the right time for me to do it. I took the call and I didn't know what the job was. I didn't know what he was looking to accomplish. All I knew he he was the founder and CEO of a great brand that I had personal affinity for. For many, many years, I've always loved Chipotle ever since I was first introduced to it, as far back as 2010 in Dallas. US, Texas. And so it was intriguing. And as the recruiter set it up for me, it was he wanted to have a conversation how he makes Chipotle better. And I had, because I was consumer of Chipotle, thoughts in my head on how he could deliver the experience in a more efficient way, a friendlier way, cleaner dining rooms and a better flow in restaurant, and so I just shared those ideas with him, looking for nothing more than just to share my viewpoints on how to make the business better. And through those conversations, he ended up offering me the opportunity to join the brand. So

David Novak 20:33 

it really wasn't so much what he did. It was just your passion for the brand back then that you think really landed the job. That's right.

Scott Boatwright 20:39 

I was in love with the food. I was in love with the food ethos, with the brand, within the brand, and it had cult like following David. And there was a reason for that, and I wanted to go find out why. In

David Novak 20:50 

my research, I've heard you say that one of your challenges, CEO is to find leaders, and not only find them, but it's, it's leadership development. You know, how do you make sure that people don't bottleneck your growth? Because you're you got to open up a lot of restaurants and you got a lot of growth ahead of you. I mean, how do you, how do you think about leadership development? Yeah,

Scott Boatwright 21:11 

David, this is one where you have to be very planful and very thoughtful around succession planning, understanding your leadership pipeline. When I found the chipotle organization in 2017 we lacked the leadership development resources necessary to grow a brand, at least grow a brand as aggressive, as aggressively as we grow and at scale. And so we started building out the leadership competencies, leadership development competencies almost from day one, because I recognized how critically important it was to our long term success, and we started building out programmatic development modules for all levels of levels of leadership in the hierarchy, and started hosting classes in person, classes at our support center to bring our above restaurant leaders to a centralized location. Talk about help them understand their unique personalities. We would do skills testing, we would do behavioral analysis, all in this service of giving them more information so they would know themselves better, where their learning gaps are. And how do we make them better and stronger as a leader, and then apply the right development programs to make them the leaders they are today. I'll tell you, David, that we had over 24,000 promotions in the brand last year, and almost 90% of those promotions were all internally developed. And so I'm really proud of the strength of this organization and what we're able to do as it relates to building the industry's next generation of leaders.

David Novak 22:41 

You know, a struggle for many leaders is going is, is actually moving a transition from being a buddy to somebody to being a coach or a boss. You know, what kind of best practice, practices can you share on, on how to really do that well? Because everybody wants to be liked

Scott Boatwright 23:00 

they do. David, so we, we built a program that we use for the for the above restaurant leader, called buddy to boss. And the core principles in the book are really or the module are really around how to separate yourself from your teammates, and how to understand that you're now leading at a higher level, and you've got to be able to separate your personal relationship, to be able to lead at a higher level, and lead and challenge people, or aspire inspire people to do better or do better work. And so we go into great detail on the topic, but David at its core is you've got, you've got to you don't break off the relationship, because that would be detrimental. But you have to establish guidelines on how you operate going forward, and as long as there's an understanding between you and your former peers on how we'll do business and how we go forward together, I think is really the great foundation to start from. When

David Novak 23:54 

you look at the organization today, you've mentioned you have a strong culture already as CEO, what do you hope to bring to Chipotle on a cultural front that that doesn't exist quite the way how you'd like it to be today? I think I'd have to

Scott Boatwright 24:09 

take you back just a step and and tell you the the culture we built the organization over the past eight years is one I'm very, very proud of. And you know, I spent majority of my on duty time as COO in restaurants, shoulder to shoulder, talking to people about the business, going through gap identification, where we can be better. How do we show up better for the consumer, but more importantly, helping people navigate their careers, whether that's inspiring them to do more, step into larger roles, challenge them on goal setting, really creating the opportunity, the pathway for people to be successful. We created a career roadmap which hangs in every restaurant, and we take people today from a $15 an hour starting position to making well over $100,000 annually. In three years and so, and that's running one of our Chipotle restaurants, and we don't take that for granted. I've always said in this industry, we create opportunity for people who otherwise, ordinarily wouldn't have opportunity. And what I mean by that, David is you don't have to have an advanced degree to be successful in this business. You have to be purpose driven, like minded, values based and willing to put in the hard work, commitment, and this learning agility, this this ability to be intellectually curious, and you can go as far as you want to go. In this organization, five of our region vice presidents that are running well over 500 restaurants in a region today started as team members in this great organization.

David Novak 25:40 

That's fantastic. I love that about our about the industry. You know, it's many time it's maligned minimum wage, etc, etc, but if you're if you work hard and do well and get results, you can really flourish in this industry. No question about it. You have to assess the talent of Chipotle in your organization and look at the things you want to accomplish strategically. What skills do you think you need to bring to the organization that have got to be enhanced?

Scott Boatwright 26:07 

David, I think we do a really nice job in most verticals in the organization, there's more top spend we can add to our marketing plans. How we think about the consumer, how we meet the consumer, where they are. How do we create access for the consumer. I think one of the biggest pain points for a Chipotle customer over the past many years is there's not a Chipotle near me, so I had to continue to grow, develop and expand. We got to continue to lean into this idea of high quality, great tasting culinary so thinking about a very diverse, bespoke supply chain that we've built over 30 years to support 4000 restaurants. What would that supply chain look like to support 7000 restaurants in North America? How will we continue to partner with farmers that want to raise animals and grow food the way we think about raising animals and growing food, I think are big, formidable challenges so that are squarely in front of

David Novak 26:57 

us when you have a coaching session. Scott, you know, what's a, what's a one on one coaching session, like with you? Well, depends

Scott Boatwright 27:03 

on what we're coaching on. David, as you can imagine, I always keep it about the work and the performance and not the individual. I like you, David, believe in the human spirit. I believe in mankind's desire and willingness to be great and do something and do it well. And so I never go in with a preconceived notion that someone lacks the ability or lacks the desire. Oftentimes they may lack the motivation. So and I've tried to figure out, is it knowledge based? Is it performance based? Is it knowledge based, or is it, you know, a motivational issue that we're having with an individual, but I keep it about the work, keep it about the performance, and share with the individual that, hey, I believe in you. I'm willing to bring whatever resources are necessary to help you win here, but you've got to do the work.

David Novak 27:52 

You know, I read somewhere that you ask, ask your team members to give you the top five things that they're responsible for. Take me inside that process and what you hope to get out of that?

Scott Boatwright 28:02 

Yeah, I think it just gives clarity to people about what they're what they're accountable for. David, I think when there's ambiguity and the team member doesn't fully understand exactly what they're being held accountable for, then we we don't, we find ourselves in a place where the team member is disillusioned by their performance or not fully understanding whether they're meeting objectives or not meeting objectives, and I think that's just generally unfair to people. And so what we did is we created a top five accountabilities by position in the organization, and they're very crafted or tailored to the position. David, that's by design, and I think they're critically important. I'll give you an example. When I joined Chipotle, I was in one of our restaurants. It was understaffed. I'm at the table with the general manager, the district manager, as well as a field recruiter, and asked a simple question, who's accountable to ensure that this restaurant is staffed with quality team members? No one could answer my question, and I knew I knew what the answer was, but I needed the organization to tell me what the answer was. And so it's the general manager's accountability. Now the district manager and the field recruiter have responsibility, but the accountability has to lie with one individual. And so that way, when we have a breakdown in performance, we have one individual we can tie to the performance measure to say, hey, this doesn't meet standard, or it does. And so we created the top five by position through the entire hierarchy, and it's also the end of year performance evaluation is graded against those top five. So there's no question for the individual, do I meet the mark, or do I not meet the mark? And they can self calibrate throughout the year and put themselves back on the right trajectory if they find themselves off course.

David Novak 29:47 

As we pause and observe Memorial Day, I want to draw your attention to an incredible nonprofit called Folds of Honor, which provides scholarships to the families of US soldiers. Its founder and CEO, Lieutenant. That Colonel Dan Rooney was kind enough to sit down with me and let me tell you, it's a conversation that's just as insightful as it is inspiring. Courage

Dan Rooney 30:09 

and comfort can never exist in the same place, bro, you got to pick one of them. And it's these courageous moments that we grow in a world that's trying to make everyone comfortable all the time, and you do such a great job of this, by the way, is fighting complacency, because people get to a place where they've achieved and it's like, oh, man, I can chill out. I don't have to use my gifts to the maximum extent anymore. So that was one, and the next one is I pulled the jet out onto the runway, and I literally can see the door on the other side of my office. I've got no visibility. It's night, there's dust everywhere, and I'm sitting there, and this f 16 is rumbling underneath me. My ears just lit up, and I'm typing in all these coordinates in the jet to where we're gonna go to support the ground troops. And this next one hits me is and probably the most empowering lesson of my life, honestly, if you were talking about leadership and just succeeding or being significant, was that no one is going to come to help you. No one is coming right and when you can get to that place, and I'm not downplaying your team, your spouse, your friends, but at the end of the day, your life is up to you, and I'm a single seat fighter pilot sitting in this $65 million jet. Lives are on the line, and I just burst through, you know, this bubble in my life that would never be there again, when I just realized I could count on myself, and you get it. You're a golfer, when you have to hit that golf shot, you have to make that putt. But this night was, I'm going life or death, and I've got to drop this bomb on time, on target. I got to go turn bad guys into pink mist, or our guys are going to die. I cannot choke, and it's up to me. And that was another moment flying the F 16 that everything changed for me in my life.

David Novak 32:03 

Go back and listen to my entire conversation with Dan, Episode 108, here on how leaders lead. You know, I've seen you do a lot of interviews, Scott, and one of the things that I see you continually talk about is you say that if you don't innovate in this industry, you're not going to be around for long. You know, what are you doing at Chipotle to really push yourself into into new territory? What are you most excited about? On that front, our philosophy around

Scott Boatwright 32:28 

the building here is we're always innovating, and we're always innovating in ways that either enhance the consumer experience, drives consumer demand or enhances the team member experience. I think one of the most underrated interventions in business today is removing complexity, and oftentimes, when we find ourselves with an imbalance in a restaurant, the root cause isn't always about employee capability. It's about operational complexity that we've added that limits performance. And so we're innovating on restaurant design. We're innovating on the equipment we use in back of house. Our focus on high quality culinary crafted in restaurant is critical to our success. So we can't compromise on the quality of how we bring the experience to life, but we can get more efficient. Because if you're a team member today and you walk into a Chipotle restaurant and you have 225 pound bags of whole onions hanging on a shelf that you have to personally cut and dice with a knife and a cutting board. It's a little arduous, little challenging, and, as you can imagine, very time consuming. So we're leveraging our partners creating innovation, whether that's the high efficiency equipment package that we're launching later in the year, the automated DML, make line digital make line that makes bowls and salads. We have a new tool called avocado. We've just co designed with a company called vboo that cuts peels and cores avocados. We typically do that about eight to 10 times per day, or cut and core eight to 10 cases of avocados a day. So just removing some of the routine, mundane tasks that team members don't want to do, makes the job easier, makes us more efficient, delivers a better team member experience, which I know will always ladder to a better consumer experience. How

David Novak 34:10 

do you think AI is going to change Chipotle? Or will it you do so much? You know, that's old fashioned. I'll give

Scott Boatwright 34:16 

you two examples. We're leveraging an AI visioning system today, which will help us understand how we're deployed at peak by restaurant and give us feedback overnight or real time that tells us whether we're deployed correctly. You know, speed of service at a Chipotle, as you can imagine, is critically important. We are fortunate, David, to have long lines to the door. That is not lost on me. Our challenge is, how do we move that line in the most efficient way? So this AI visioning tool will help us with that, and it does all the decisioning on its own. We also are leveraging AI and AI assistant to help us onboard staff members through our talent app, our applicant tracking system and a much. More efficient way reducing the time it takes to onboard a new team member at Chipotle from 14 days to about three days. And so we're looking at other places where we can leverage AI to make us smarter at analytics. Of course, we're in the early stages of what that looks like for us, but everyone has these massive volumes of data points, and they really don't understand what to do with them all. And having something that helps you synthesize all that information and really strips out where the opportunities are in the most meaningful way, I think the person that figures that out first will have a competitive advantage.

David Novak 35:34 

Scott, how do you how do you think about leading in the whole digital world? You know, Chipotle is one of the leaders in digital ordering. For example, how do you keep yourself up to speed on technology and leading in digital David,

Scott Boatwright 35:47 

it's probably through the same things that you would imagine is keeping yourself well read, keeping an eye on things that are happening in and around the industry, how the tech companies are leaning into meaningful innovation. What's New on their frontier, partnering with those tech partners or equipment, you know, partners on what they're seeing, what are the best use cases. And then it doesn't always have to be an off the shelf solution. It could be something that you innovate internally or externally or part and through or through a partnership. I guess the point really is, is you've got to be innovating. You got to keep leaning in, or the competition will raise you by

David Novak 36:24 

when you're a Chief Operating Officer. Now you're the CEO. You got to really understand what's going on with the customer. You got to see the world the way it really is, not the way you want it to be necessarily. Have you ever gone undercover as a customer? How do you make sure you're getting the real skinny? Because you know when you walk into the store now everybody knows who you are.

Scott Boatwright 36:45 

Yeah, it's a challenge. David, I still go unannounced. I have a trip unannounced tomorrow. I'll get into restaurants, and I typically get to two maybe three, before the grapevine is lit up. And I'm in town and everyone starts to do something differently. What they should recognize, or fully recognize, is David, that I've been in this industry for over 30 years in operations. I know when it's when it's, you know, real, and I know when it's being faked, and so I can still strip out the opportunities and what, where we need where we need to effort, where we need work.

David Novak 37:19 

What are your customers telling you right now that they tell you is the biggest problem with Chipotle, and how are you attacking that?

Scott Boatwright 37:25 

Yeah, so I actually did a problem detection study. Most recently. I wanted to understand where are the friction points for the consumer, the chipotle consumer. Right now, it's really around this idea of friendly service, clean dining rooms, clean drink stations, things that where we have an opportunity, we are extraordinary in this great brand around great culinary value and abundance variety speed is always great at Chipotle, I don't know that we're always as friendly as we can be David, and that's something we're going to work on this year. We've redrawn or redesigned our deployment methodology to solve for some of the some of the dining room, Drake station, cleanless issues, and then we're rethinking or reimagining guest recovery in restaurant, versus pushing a consumer off to a one 800 number or an agent. We need to solve these things in the moment. Those are things we're gonna get better

David Novak 38:18 

at. I know you believe that growth is just beginning at Chipotle. And you know, a lot of times when you're pushing for growth, you got to do things that you know haven't been done before, obviously. And there's always obstacles. What's, what's the toughest thing you're working on right now that you've got to take people with you, what's that? That that big thing you know you got to do. But right now, people are maybe wondering, man, I'm not sure we can do it, or should we do it, or is there anything like that, and how do you overcome those obstacles?

Scott Boatwright 38:48 

As I think about this business, I talk about the consumer flywheel, and I talk about operations, marketing and digital, and those three things have to be working in harmony and in concert for us to be, to deliver the most meaningful performance for the organization. And sometimes we get out of balance, whether it's operational challenges I just talked about, whether it's digital, you know, trying to meet the consumer where they are right now, the consumer is under a lot of pressure, as you know, you know, they're on the sideline, they're not spending. Consumer confidence is down. And how do we how do we create meaningful experiences, whether in our own digital properties or on our third party platforms that you know give the consumer value and in the way we do value at Chipotle or thinking more creatively around product innovation for the brand? Are we meeting the need of our consumer today? How do we think differently about the marketing calendar and the ad spend. Are we showing up in the right programs? Are we meeting our core consumer at the right reach and frequency targets? And so we're challenging everything every day. David and I think it's easy for an organization our size that has had the success we have had over the last many years, to get complacent and. Think we just keep doing what we do, and great things will happen. You know, as well as I do, that is not always the case, and we've got to be smarter. It's

David Novak 40:07 

got this been so much fun, and I want to have a little more with my lightning round of questions. Are you ready for this? Let's do it. The three words that best describe you, passionate, purpose driven, people oriented. If you could be one person for a day beside yourself. Who would it be?

Scott Boatwright 40:21 

I think it would be interesting to be in the shoes of the President of the United States for one day. We're always overly critical for the individual that sits in that chair. And I know there's an enormous amount of pressure on whoever is in that chair, regardless of what party you sit in. I wonder what it's like.

David Novak 40:39 

What's your biggest pet peeve not showing up? Who would play you in a movie? Tom Hanks. What's your go to Chipotle order,

Scott Boatwright 40:46 

brown rice, black beans, chicken, tomato, salsa, hot salsa and cheese.

David Novak 40:51 

What's something that only the CEO knows about Chipotle, our secret sauce? What's, what's one thing in your office or on your desk that tells a story about you. I have

Scott Boatwright 41:01 

a fragment from a meteorite that's on my shelf behind me that was given to me by a vice president named Michael Lippert, many, many years ago, when we beat the performance record for the entire company. And it says under the bottom, we reached for the stars and we grabbed one. Do you have any nicknames Boaty? That's probably it. Most people call me either boat or Boaty.

David Novak 41:25 

What's the one thing Scott that you do just for you? I

Scott Boatwright 41:28 

take the first hour of my day and I get up at five every morning, and I'm either I'm either in the gym or I'm working on me personally, that is my time. My four year old gets up at 7am and I am committed to spending the first hour of his day with him, but that that time between five and seven

David Novak 41:46 

is my time, besides your family. What's your most prized possession besides my family? Probably my putter. Some days, probably I turned on the radio in your if I turned on the radio in your car, what would I hear? Probably some country music. What's one of your daily rituals, something that you never miss? You

Scott Boatwright 42:05 

know, I don't miss that first hour of my son every morning when I'm not traveling. It's a critical time for me. It's something I'm committed to.

David Novak 42:12 

That's good job on the lightning round. We're going to move on a few more questions. I'll let you get back to back to work. Maybe you can go eat some more of that Chipotle that you love so much. You know you mentioned you talked about that hour you spend with your son. You know how long you been married and and how have you made that partnership work through the leadership that you obviously bring to Chipotle, yeah,

Scott Boatwright 42:33 

so Aaron and I have been married now over 15 years together, close to 20 and i She's an absolute saint. I have to tell you, David, she's moved five times with me, from Atlanta to Dallas, back to Atlanta to Denver and now to Southern California. You know, I wouldn't be where I am today, if not for her support, guidance, direction, advice, counsel. You know, she is just my absolute rock. And so, you know, I don't know that I'm always providing leadership for her at home. She provides enough for our household on her own, she holds her own just fine, and we make a great partnership. But navigating Parenthood has been an absolute joy, but it comes with challenge, as you well know, David,

David Novak 43:18 

where do you go? Scott? To get your your own learning and inspiration. I mean, you know is, what do you do? I get the journal

Scott Boatwright 43:27 

every morning. I try to brief, briefly read through the journal. In the mornings. I get books, occasionally from people that that have a lot of respect for that have put the time and effort into the book. As you know, you get put you get, you get inundated with books, and you could, you could spend your entire time reading books that that aren't for you or aren't important to you in the moment. And so trying to find the right folks to read and stay up to speed on is critically important, and you've got to surround yourself with other like minded individuals to help you navigate. You know, your current thinking bounce ideas off people that will challenge you, place that play devil's advocate not necessarily agree with you. I think it's critically important whether you call them mentors or otherwise, is immaterial. I think you just need the individual that you can use as a sounding board. But I think that's really it. You know, I find myself more tuned into CNBC today than I used to in the past, but you got to stay up to speed. So

David Novak 44:26 

how often you look at the stock ticker? How important is that to you? Every day it's

Scott Boatwright 44:30 

on the front page of my phone. David, if I had it here, I'd show it to you. It's right. It's the And, David, I use that as a bellwether more than anything else. I think it's an important KPI. It's not the KPI, but it's an

David Novak 44:43 

important one. What do you say to all those people say you shouldn't do that? You

Scott Boatwright 44:46 

know, I know. You know, just, I'm just, it's in my DNA. David, I described you the football analogy earlier today. I want to know, are we winning or not in the marketplace, and I can see that through sales and profit performance. Points, but gosh, you hope that translates into into total shareholder return. There are a lot of people in this world, whether you're an investor in our great brand, or you work within our great band brand, that are counting and relying on me and my management team to make the right decisions.

David Novak 45:15 

I have to admit, I looked at that stock price every day myself. So you mentioned earlier, you know, the CEOs role, you know, you basically run the railroad. You got to make sure the stock's growing. And then you said, you really have to leave a mark. You don't leave a legacy. You know, when you, when you look at Chipotle, and I know you've only been in the job six, seven months, you know, do you already know what your your mark is that you want to leave, or is that something that you're, you're you're contemplating I

Scott Boatwright 45:43 

do, David, I've given it a lot of thought, and I want to continue to push into this idea changing the way Americans think and eat fast food. I want to continue to push our our agenda, you know, having giving people access to wholesome, nutritious food that's prepared like a chef, driven restaurant that you would attend on a Friday night with a friend for hundreds of dollars, and give them that opportunity at a nine, $10 price point. I think we're making a difference through that. I want to continue to grow the next generation of leaders for the not only the chipotle brand, for this industry, people that will take on larger roles, and if they move on to other companies, I will support them, I will promote them, and I will push them as hard as I would, as if they were internally. And then lastly is this idea of taking Chipotle to other countries and giving people access to the beauty that is Chipotle. So this idea around making Chipotle a global, iconic brand.

David Novak 46:41 

You know, the whole Mexican food category internationally is tough, because you not only have to build awareness of Chipotle, you got to build awareness of the category. You know, how do you see? How do you see going about that? Yeah,

Scott Boatwright 46:51 

at its core, though, David, you know, rice, beans and chicken really works around the globe. And so we have a partnership today with Al Shaya in the Middle East, and we're already in Kuwait and Dubai. We are very proud of the relationship. Mohammed Al Shaya is very proud of the performance of our business units there. We'll continue to grow our footprint in the Middle East. We're already talking to key partners in other parts of the world, whether that's Latin America or Southeast Asia, et cetera, we feel like, and we're in Western Europe today, easier market I get than other parts of the world. But, you know, I think, I think this brand will resonate no matter what geography we land in.

David Novak 47:30 

What's one piece of advice you'd give to anyone who wants to be a better leader? Focus

Scott Boatwright 47:34 

on your people. You know, I've always said, care more about what your people think of you than what your boss thinks of you. And I always had this old adage and from Zig Ziglar, do you remember Zig Ziglar? Oh, yeah, absolutely. Yeah, old school motivational guy. But Zig said you can have everything you want out of life if you're just willing to help enough other people get what they want. And that's what I'd tell you, to focus your efforts. Continue to grow and mature as an individual, continue to learn, be intellectually curious, but at the end of the day, it's really about supporting your people in the most meaningful way, and when you help them hit their goals, it only paves a better path for you long term. Well,

David Novak 48:12 

Scott, I couldn't agree more with that philosophy, and I can't tell you how happy I am to see you in the job and watch the job that you're doing. Good luck at Chipotle. And I hope you sell a lot of great tasting food, maybe not a whole lot more than Taco Bell. But you know, I'm rooting for you.

Scott Boatwright 48:32 

Thank you so much, David, and really appreciate this opportunity.

David Novak 48:41 

Let's be honest, most of us have worked in a system that made success feel like it was harder than it had to be. Scott gets that, and more importantly, he does something about it. He knows that great performance isn't just about great people. It's also about the system they're working in. When results slip, it's so easy just to blame individuals, but if you want real leverage, you've got to zoom out, you've got to find and fix the operational complexity that's holding people back. So here's something to try this week. Pick one process your team uses every day. Ask where they're running into friction. Then ask yourself, what can you do to remove it? Because when you fix the system, you free up your people. So do you want to know how leaders lead? What we learned today is the great leaders remove complexity to unlock performance. Coming up next on how leaders lead is Greg Johnson, the owner of the San Francisco Giants and the executive chairman and chairman of the board of Franklin Templeton. So be sure you subscribe on YouTube or wherever you get your podcasts so you don't miss it. Thanks again for tuning in to another episode of how leaders lead, where every Thursday 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 very best leader you can be. You.