Chipotle: Model of scalability

When I think about making an enterprise flexible at scale, I often think of Chipotle. (No, not because it makes me hungry!). Chipotle's menu is a nearly perfect example of how a company can achieve both flexibility and scalability by how they've structured their offering.

Take a guess as to how many distinct entrees you can order at a Chipotle restaurant. Go ahead, I'll wait.

When I've asked in workshops, most people guess about 100 or so. A few will say around 4000-5000. One person guessed 100,000. That's what we might commonly guess but almost no one anticipates that Chipotle is able to make 12,582,912 distinct entrees! This is incredible flexibility for the Mexican food chain, making it possible to deliver a bespoke meal to its customers from a standard menu. What's more, the cost of delivering a bespoke product doesn't differ that much from distinct choice to distinct choice.

This is how we ought to think about our organization capabiltiies - not just products. This is counter-intuitive though as we're accustomed to believing that something that is bespoke is also extremely expensive. Chipotle demonstrates that having something flexible enough to be bespoke doesn't have to be expensive.

Chipotle is able to make 12,582,912 distinct entrees

By examining how Chipotle structures its offering, we can learn how to build this flexibility in our own organizations. The key for Chipotle is understanding where there needs to be rigidity versus where there is flexibility.

Chipotle forces customers to follow a standard process. When you begin, you can't start with the protein, you first have to tell them which entree type - burrito, burrito bowl, taco, etc. - that you want first. You don't get to skip ahead to the toppings, next will come the rice, followed by beans. Chipotle knows that at the end, the goal is for the customer to get the entree they want but by standardizing the process, they're able to dictate a workflow that is more efficient for them to deliver rather than to have the customer dictate the workflow.

This is critical because I've found that many businesses eschew standardization because lines of business are silo'd and believe that what they do is distinct. This absence of standardization often drives up costs and slows down process, often to the detriment of the enterprise but also to lines of business, especially if they're trying to shift how they do business.

Entree Type	Rice	Beans	Protein	Toppings
Burrito	White Rice	Black	Brisket	Guacamole
Burrito Bowl	Brown Rice	Pinto	Chicken	Mild Salsa
Quesadilla			Steak	Corn Salsa
Salad			Barbacoa	Medium Salsa
Crispy Taco			Carnitas	Hot Salsa
Soft Taco			Sofritas	Sour Cream
			Veggies	Fajita Veggies
				Cheese
				Lettuce
				Queso

When I worked in media, I had production units insist that their daily news program was very different from their documentary series to justify avoiding standardization. From my perspective, however, they pretty much did the same thing - produce a media product - just at different pace. Standardizing process, however, ultimately allowed us to automate the process and increase the speed - something that was important to both daily news programs and documentary series.

This requires a step back from the day-to-day to truly understand, what processes or capabilities are common? Where they are different, do they need to be? Could a processes be delivered that would work for everyone in a basic way?

Answering this question then enables us to see, where does a process or system need to be flexible? Where do we need to add options to ensure delivery of the unique requirements of a particular business? Even better, are there opportunities to extend some of those capabilities to other business units that might be able to take advantage?

This is where the options that Chipotle lays out at each stage of their process come in: six entree types, two types of rice, two types of beans, seven proteins, and ten toppings. What's great is that everyone gets to take advantage of all of these options whereas in an enterprise that is silo'd, only some businesses would have capabilities while others do not.

Building out enterprise services with a model like this affords enormous flexibility without having to deliver all options all at once. You could imagine a situation - maybe an earlier version of Chipotle - offering only limited choices or even one choice per stage of the process. It also affords them the opportunity to add new choices or take some away (based on data) without having to make significant changes to their operation.

That's how you achieve flexibility at scale - standardizing the core of what is being done and determining where to add options that individual businesses need. Now I feel hungry!