Seven leadership lessons you can learn from Chipotle’s recent crisis

Over the last two years, Chipotle Mexican Grill’s sales have dropped dramatically after a series of well-publicized instances of customers becoming sick from their food. The fall of this once high-flying company wasn’t because of food-borne illnesses. Rather, it was leadership that failed. What lessons can you learn from their mistakes?
Lesson No. 1: Denial is not your friend. I was astonished by a comment that Founder and CEO Steve Ells made in a Wall Street Journal article. He said that Chipotle’s new food safety protocol prevented the chain from keeping its tables clean. Really? I stopped eating at Chipotle months before the tainted food issues occurred because every location I visited was dirty. Denial about the true operations of his restaurants allowed Ells to live in a made-up world.
Lesson No. 2: Listen to your customers.
Customers, including me, had loudly and publicly complained online about the condition of the company’s restaurants. If Chipotle had acted upon them, hygiene concerns could have been addressed earlier.
Lesson No. 3: Pay attention to your organizational design.
Peter Drucker said, “Structure follows strategy.” Chipotle’s strategy was to distinguish itself with its “Food with Integrity” concept. Leadership structured the organization accordingly by creating key, but flawed, processes:
■  A promotion process where the most efficient employees, not the most customer-responsive employees, were promoted.
■  Marketing and social media campaigns that created an alluring (but unreal) image to meet unsustainable rapid growth goals.
■  Programs that were admirably strict about food quality, but not food safety.
■  An intentionally insular board that failed to challenge leadership.
This structure was unintentionally, and perfectly, designed to undermine the business.
Lesson No. 4: Take personal responsibility for mistakes.
To win back customers, it was essential for Ells to publicly and personally take responsibility for Chipotle’s problems.
Lesson No. 5: The same skills that make you a success are not the same as those needed to move forward.
Instead of learning from its mistakes, Chipotle doubled down on its original strategies.
Lesson No. 6: Be vigilant about oversight.
Chipotle must enforce its strict standards for restaurant operators. Corporate management should randomly inspect individual stores and talk with customers to ensure compliance.
Lesson No. 7: Be humble. Success is fragile and never guaranteed.
In his book, “How the Mighty Fall,” Jim Collins wrote about “hubris born of success.” It “sets in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place.”
In Chipotle’s release of its 2016 financial results, Ells said: “We intend to continue to simplify and improve our restaurant operations, utilize creative marketing to rebuild our brand and further the rollout of our digital sales efforts. Focusing on those initiatives will restore diners’ affinity for the Chipotle brand.”
What has changed in Ells’ strategy? Hubris and denial hid problems from him originally, and they continue to do so. Has he learned anything from this crisis?