Change at Chipotle Mexican Grill Puts Dual-CEO Model Under Fire

Chipotle Mexican Grill has become the latest company to decide that two heads probably aren’t better than one, following in the recently-tread footsteps of Whole Foods Market.

Then there was Swiss luxury goods company Richemont, which this year decided it would go one better and jettison both its CEOs without replacing either. Other companies that have ditched the dual-CEO model in recent years include Blackberry and Deutsche Bank.

“Even though Chipotle is based on a simple idea, operations have become over-complicated.

In Chipotle’s case, it was a matter of founder Steve Ells wanting to simplify the business. At least that’s the reason he gave for the departure of co-CEO Monty Moran.

“Chipotle is based on a very simple idea: we start with great ingredients, prepare them using classic cooking techniques, and serve them in a way that allows people to get exactly what they want,” Ells said in a statement. “Even though it’s a simple idea, operations have become over-complicated.”

Companies with two leaders always risk going astray should big egos collide. And more unconventional management structures are often the first thing to be targeted by investors if share prices aren’t rising—especially if, as in Chipotle’s case, having two CEOs means having two large pay packages.

Whole Foods is in the midst of a prolonged sales slump as competition heats up in the organic food market. Chipotle, meanwhile, is still struggling to recover from food contamination scares that spooked many customers.

The most notable company left carrying the co-CEO flame is Oracle, which has been run by Safra Catz and Mark Hurd since Larry Ellison stepped down in late 2014.

Oracle shares flourished over Ellison’s decades-long reign, but have more or less flat-lined since his departure, with the company recently missing analysts’ estimates with a 1.7% decline in first-quarter revenue. Nobody, however, appears to be publicly calling for any changes at the top just yet.

Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

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