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What Every Business Can Learn From A Crisis

Tales of overcoming adversity at Chipotle, GM, and GoPro contain wisdom for us all.

What Every Business Can Learn From A Crisis

Holy guacamole: After a tumultuous year, Chipotle is fighting to win back the hearts and minds of its customers.

[Photo: Todd McLellan]

When a Chipotle first opened up near our offices in lower Manhattan, the place was overrun. Lines would start forming outside even before the doors were unlocked, and they’d continue into the evening, snaking through the restaurant and spilling out onto the sidewalk. It was such a scene, some tourists would ask if a celebrity was waiting inside. The only star was an $8 burrito.

The scene has changed over the past year. Plenty of customers still move through the place, but the frenzy is gone. It has been replaced with skepticism. After a series of health scares last year at a handful of Chipotle restaurants, including an E. coli outbreak in the Pacific Northwest, consumers began to question just how safe it was to eat at the burrito chain. Defined by a mission of "Food With Integrity"—which was put forth by founder Steve Ells—the company has been facing a crisis of trust.

I first met Ells several years ago, after reaching out to him for a cover story I was writing about the competitive advantages and challenges of putting purpose and mission at the core of a commercial enterprise. Ells was both thoughtful and passionate in talking about the subject. He acknowledged that sometimes trade-offs were required. For example, if not enough responsibly raised meat was available in a particular market, he would revert to the less pure variety rather than pull menu items; the company disclosed the shift at any affected restaurant, and customers kept buying.

Many fewer are buying today. Sales at Chipotle are down by double-digit percentages, the company’s market value has sunk $10 billion from its peak, and activist investor Bill Ackman has bought up a sizable stake of shares, likely portending a push for bigger changes ahead. The saga of how Chipotle got to this point, and how it has dealt with the crisis of the past year, is a tale rich with intrigue, drama, and lessons for any business. Senior writer Austin Carr spent seven months investigating what went wrong; how the company reacted; the role of regulators and the media; how hyperbole and hypocrisy accelerated the panic and its aftermath; and what still stands in the way of a full recovery.

Carr’s special report, "Chipotle Eats Itself," is Fast Company’s most extensive article in eight years, informed by hundreds of hours of interviews from inside and around the company, thousands of pages of documents that were leaked to us, on-site reporting from farms to industrial kitchens, and revealing discussions with Ells, his co-CEO Monty Moran, and other top Chipotle leaders. It is an eye-opening, entertaining, and unvarnished look at a company and team that seemingly could do no wrong—until suddenly they could do no right. What this piece illuminates is the fragility of success in the modern economy and just how vigilant companies need to be, even if their heart is in the right place and their business model is enviably efficient.

Two other features in this issue also delve into the topic of overcoming crisis: our cover story about Mary Barra’s efforts at General Motors (see "The Accelerators") and GoPro founder Nick Woodman’s attempt to turn the action-camera maker into a mini Apple (see "Can GoPro Rise Again?"). Taken together, these three articles offer a master class in the promise and peril of breaking the mold, and the resilience required in a world of rapid change and heightened uncertainty.

I still visit our local Chipotle—I had a burrito for lunch at my desk earlier this week—and I haven’t gotten ill. It may seem unfair to some, the way Chipotle has been hammered by investors and consumers. But when you play in the big leagues, the stakes are high. We each have to find our own way to rise above.

A version of this article appeared in the November 2016 issue of Fast Company magazine.

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