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Good Food and Good Business

Monty Moran, a 1993 Pepperdine Law School alumnus, now serves as the president of Chipotle Mexican Grill.

by Emily DiFrisco

Montgomery (Monty) Moran isn't your typical big cheese. Even though he's the president of Chipotle Mexican Grill, he's relaxed, friendly, and "hasn't worn a suit in years." He's the type of guy who remembers your name after one introduction, the type you'd like to have lunch with, and definitely one you'd want to have on your side in a competitive dodge ball tournament.

When Monty visited Pepperdine Law to speak to students about his career, he reflected on the contributing factors to his success over the years. One factor is his work ethic, which was forged working all kinds of jobs such as grilling burgers at Dairy Queen, cleaning bathrooms at a home for the elderly, selling car parts, fixing cars, and waiting tables. Whatever the job, and no matter how frustrating his supervisor seemed, Monty worked hard and took pride in his tasks. After college, when he became a claims representative for Farmers Insurance, he realized that his work ethic and standards didn't match some others in the workforce. Many of his co-workers took "kick backs" or otherwise supplemented their income at Farmer's expense. Some were caught and some were not, but never once did Monty slide in to these habits. Looking back, he says this experience of staying honest in the presence of so much corruption shaped his character. "Having integrity in that job forged something in me that shaped the rest of my life," says Monty.

Aside from working his odd jobs, Monty attended the University of Colorado and majored in communications. As graduation neared, he began thinking about law school. He came out to California with a friend and worked for awhile before enrolling at Pepperdine Law. "I had a really fun time in undergrad," he says with a laugh. "Law school wasn't as much fun." But Monty became intrigued by the intellectual challenge law school presented, and began enjoying his studies.

As he neared the end of law school, Monty looked forward to becoming a real trial lawyer. Soon after graduation in 1993, he joined the firm Morris, Polich, and Purdy, where he made another critical decision. Unlike other recent hires who flocked to the big "sexy" cases, Monty chose less desirable, smaller cases, that would give him the opportunity to argue in court nearly every day. When he and his wife Kathryn moved back to Colorado in 1996, Monty had three years of solid hands-on experience to contribute to the firm Messner and Reeves. For someone so young, he was already in a position to make a big impact.

Meanwhile, a friend of Monty's, Steve Ells, was developing his own career as a gourmet cook. While working under a famous San Francisco chef, chopping meat and vegetables all day, Steve had a revelation. Despite taking all day to prepare, the meals could be served up very quickly. This idea became the foundation for a revolutionary restaurant: tasty, healthy, gourmet, and inexpensive fast food.

Enter Chipotle Mexican Grill. Chipotle was the name Steve gave his new restaurant, which would use high-quality raw ingredients and classic cooking methods to make burritos, tacos, and salads. He initially intended Chipotle to be a "Cash Cow," for his next adventure: a sit-down gourmet restaurant.

When Steve had built only a few Chipotles, he asked Monty do some legal work for the young company, and initially, this meant negotiating leases for new restaurants. Monty had never touched the legal side of leases in his entire life, but being smart does have its advantages. Monty went to the local library, studied a few books, and began working on leases for Chipotle.

As it turns out, Steve never opened his fancier 5-star restaurant. Rather, his one-location Chipotle, which he opened in a space about as big as a minivan, was a smash hit. Lines wound out the door and down the street, as Denver residents awaited their own fresh and tasty burritos. As Steve opened more locations, Monty's firm continued to write the leases. "We did those leases for dirt cheap," says Monty with a laugh. "We were billing them under an impossibly low flat fee arrangement, which probably amounted to under $30 an hour."

No matter the fee, Monty and his firm continued to serve Chipotle to the best of their abilities. As with many individuals who are problem-solvers, the more work you do well, the more work people hand you, and the case of Monty and Chipotle was no exception. "Every time I went into Chipotle's office, they handed me more problems," says Monty. "They kept handing me different pieces of paper, saying can you fix this and this and this?"

He did fix them. He solved their problems each and every time and efficiently too. As an attorney, Monty's philosophy is that in order to serve your client well, you need to care more about the client's legal problem than they do, so much so, that your concern eclipses the concern of client, and they walk away relieved of their legal stress. "Being a lawyer is being a counselor and guide who people who are afraid of a complex legal system. It's an honor to serve them," he says.

Chipotle's success hit a high point in 1998, when the giant McDonalds expressed interest in purchasing the restaurant company. After investing in Chipotle, McDonalds sent their top lawyer and general counsel, Jeffrey B. Kindler, who is now the CEO of Pfizer, to visit Monty and to review his firm's legal work for Chipotle to see if the firm should continue as counsel, or whether the work should go to McDonald's enormous in-house legal department. Somewhat intimidated by the meeting, Monty considered that it might be the end of his firm's relationship with Chipotle. He prepared to meet the attorney and to answer his questions with total candor. After the meeting, Kindler sent a memo to executives at McDonalds, recommending that Monty and his firm retain all legal work for all Chipotle restaurants.

The firm was ecstatic, and they continued to serve Chipotle, which fast became their biggest client. Monty's career was thriving as well; he was doubling his salary every year and growing the firm's number of employeesâ€"all on top of becoming partner and CEO of the firm. Aside from his tremendous success, he simply loved being a lawyer.

Right around that time, Steve asked Monty to join the leadership of Chipotle. They discussed the possibility for weeks, months, and even years. Suffice it to say that Monty both loved his work at Messner and Reeves and put much thought into the decision of joining Chipotle.

Steve knew Monty was a good leader and visionary, and he continued to offer him leadership positions. Finally in March 2005, Monty signed on to be the president and chief operating officer of Chipotle; Steve remained the chairman and CEO.

Monty says working as the president of company, now 16,500 employees-strong, has few similarities with his previous work as an attorney. As a lawyer, Monty says he could do nearly everything - whether faxing or speaking in court, by himself. But as the president of a company, you must trust your employees to be your hands and fingers, to work hard and carry out the company's vision.

But his old adage about caring more about the client's problems than he or she did, was relevant. "When the customer steps inside our restaurant, their problems become our problems," says Monty. The job of the Chipotle crew is to get into the mind of the customer and ascertain their needs.

As Monty began to settle into his position he set about to improve quality and efficiency. He believed that the individual store managers were the most important people in the company, even more so than him, and he began to look closely at how Chipotle hired its managers. Like other restaurants, Chipotle hired managers with restaurant experience before enrolling them in company's six-week training program. The trainers were composed of the basic crew members of Chipotle. When he first started in his position, Monty went undercover into the "Managers in Training" program, and he found room for improvement. Monty discovered that managers who came from the Chipotle's own crew were four times less likely to turn over than managers hired from outside the company. This prompted a new philosophy about how Chipotle would build its team: they would promote current employees and train them to be managers.

Initially, some people at Chipotle had concerns about this new focus, but as the idea developed, people began to jump on board. Part of the new plan included a unique program, wherein managers were given meaningful incentives for producing additional sales and developing the skills of other employees. "We find the brightest and best at the crew level and exalt them," says Monty. "It's a culture that appeals to the highest performers."

In hiring managers only from within, Chipotle creates more clearly defined career paths for its employees, while reducing turnover among managers and crew. After one year, 60 percent of Chipotle's managers have come from the inside.

Another part of Chipotle's culture that excites Monty is the concept of "Food with Integrity." According to him, Food with Integrity is the philosophy of seeking better food, not only from a variety of fresh ingredients, but ingredients that are sustainable and naturally raised with respect for the animals, the land, and the farmers who produce the food. All of the pork Chipotle uses in its restaurants, as well as two thirds of the chicken and nearly half the beef is "naturally raised," meaning that the animals are fed a pure vegetarian diet, never given hormones or antibiotics, and raised in a humane way. In all, Chipotle serves more naturally raised meat than any other restaurant in the country.

This philosophy also applies to the vegetables and dairy products. More than 25 percent of their beans are organic, and that's an enormous amount of beans. Monty jokes that they buy as many organic beans as they can find. Next on the agenda is ensuring that their dairy products come from cows that are hormone-free, and one recent accomplishment is acquiring 100 percent of their sour cream from cows that are never given recombinant bovine growth hormone (rBGH).

When Chipotle opened its first store in 1993, the idea was simple: high-quality raw ingredients, classic cooking methods, and friendly people to take care of each customer. Fourteen years and over 600 stores later, the restaurant is still serving it up to long lines of customers. To top it off, the company went public in January 2006.

Monty's vision is one of empowerment, stemming from the idea that if you give someone more responsibility, they will usually rise to the challenge. With so many store managers coming from the crew, clearly employees are raising the bar. "At Chipotle, no ideas are out of bounds when it comes to making better tasting food, empowering our employees, providing better customer service, improving our restaurant operations, or running the business with greater efficiency," says Monty. "With this kind of culture, we can not only continue to improve the way people eat, but we can show that a company can do well by doing good."

In the way of advice for success, Monty told students to be curious, ask simple questions, care about people, find out what's great in a people, and always be sincere. In short, his recipe for success requires living and working with integrity.

Monty resides in Boulder, Colorado, with his wife Kathryn, two sons, and one daughter. The family enjoys activity, whether skiing, canoeing, playing soccer, or vacationing in New Hampshire.