Chobani Yoghurt: Introducing the Anti-CEO
Many year ago, Peter Drucker, a renowned American management consultant said, “show me a business that is going somewhere, and I will show you a man with a mission.”
Chobani, the Greek yogurt manufacturer, started life in 2005 with just five people, a true SME in every sense of the word. Today, the business’ revenues are approaching $2 billion and they employ over 2,000 people. It is global success story. However, the founder/owner, Hamdi Ulukaya, is anything but your traditional CEO. His views of business and value are markedly different from that taught in the business schools. He sees the role of the traditional CEO as outmoded, and advocates a new style of CEO, the Anti-CEO, whose values resonate more with the society of today. With the help of books and YouTube, this is his story. Hamdi is, without doubt, “a man with a mission!”
Hamdi Ulukaya is Turkish and was brought up in Turkey on a farm where his family made cheese and yogurt. He moved to upstate New York, where he was running a small cheese shop “and really hated business.”
One day, in January 2005, he received a flyer in the mail advertising the sale of a fully equipped yogurt factory nearby. He threw the flyer away, then thought better of it and called the number to arrange a visit. He set out to find the manufacturing plant, passed a road sign saying, ‘Dead End’, then found the factory. The smell hit him first; he said, “it was like a milk container left out in the sun.” The walls were cracked, the paint was peeling “it was so old the owners thought it worthless. I thought they had left a zero off the price, I couldn’t believe it,” Ulukaya explained.
Upon entering the building, he was met by the people, fifty-five of them preparing to break the plant apart and close down. For many of them, it was their life’s work. The production manager, Rich, showed him around. Rich had worked there for twenty years, his father before him had made yogurt there, and his grandfather had made cream cheese in the very same plant.
“You could tell that Rich felt guilty that this factory was closing on his watch, this wasn’t just an old factory, it was a time-machine. This was a place where people built lives, and the owners weren’t just giving up on the factory, they were giving up on the staff. I was so angry that the CEO faraway was looking at his spreadsheet and closing the factory. Spreadsheets are lazy. They don’t tell you about people, they don’t tell you about communities, but unfortunately this is how too many business decisions are made today,” he continued.
On his way back to his office, he called his lawyer and told him he intended to buy the plant. By August 2005, he had sorted the finances and had the keys for the factory.
The first thing he did was hire back four of the original fifty-five people, with the intent of re-hiring the remainder when trading would allow.
The first task the team undertook was to paint the outside of the factory. This took the first summer. In doing so, they got to know each other. As to what to do next, Hamdi modestly says, “we figured it out together.”
What they did was to prepare for the launch of a new style of Yogurt, Greek Yogurt. They called it Chobani (Shepherd in Turkish).
Five years later, Chobani was the market leading Greek Yogurt brand in America. Not only had Hamdi re-hired most of the original fifty-five people, he hired hundreds more.
“For the first five years it felt like we never left the factory,” commented Hamdi. “We worked day and night to fix that plant. The best part about it for me was that the exact same people who were given up on by their former employer were the ones who built it back 100 times better.”
He built a first class, Little League baseball pitch so their children would have somewhere to play sports.
All his employees today have a financial stake in the company. He has made it their company. They feel committed to its success and its future.
Hamdi’s inherent belief was that in growing a successful business you create a successful community. For every job created, he believed ten more jobs would result in the surrounding community.
“All this time I wondered what this was about?” questioned Hamdi. “I am not a businessman; I don’t come from that tradition. Corporate America says it’s about profits. Mainstream business says its about money. The CEO playbook says its about shareholders. And so much is sacrificed for it, its factories, communities, jobs. But not by CEOs. CEOs have their employees suffer for them. No more! It is time to admit that the CEO playbook that has guided CEOs for the last 40 years, is broken. It tells you everything about business except how to be a noble leader.
We need a new playbook that sees people again - that sees above and beyond profits. In the movies, they have a name for people who take a different path to do things right; they call them anti-heroes. We need the same idea in business. We need anti-CEOs, and we need the anti-CEO playbook.
Let me tell you about what the anti-CEO playbook is all about. Firstly, it is about gratitude. In the anti-CEO playbook, we aim to take care of the employees first, not the shareholders. I have given all our 2000 employees shares in the business. They have earned it. We have built this business through their talent and their hard work.
Secondly, it is about community. Today’s large corporates ask communities, ‘what kind of incentives and tax breaks can you give me?’. The reality is that these businesses should go to the struggling communities and ask, ‘How can I help you?’
When we were looking to build our 2nd manufacturing plant, I went to Idaho. There were no incentives, there was no pool of ready skilled manufacturing labor force, but there were farmers. We built our 2nd plant there, and while it was under construction we partnered with the local colleges and trained hundreds and hundreds of people in advanced manufacturing. This plant is now one of the world’s largest yogurt manufacturing plants. The community is now thriving, new schools are opening every year, more food companies are moving there. Community is the new way of business, go search for communities that you can be part of, ask for permission, be with them, open the walls and succeed together.
Lastly the anti-CEO playbook is about accountability. The traditional CEO playbook says the CEO reports to the Board. In the anti-CEO playbook, the CEO reports to the consumer. In the first 3 years of Chobani, the 1=800 number printed on the packaging was my personal number. I wanted feedback, and where it made sense, I made changes, because the consumer is in power. It is for the consumer that the business exists."
This is the difference between a return on investment and a return on kindness. This is the difference between profit and true wealth.
Hamdi Ulukaya is undoubtedly an extraordinary man with an extraordinary vision, and he has made his startup business a global success in just fifteen years.
His business practices challenge conventional thinking and put people and communities first and foremost.
He believes that profit is something that will follow if you do things right and work with the right things.
There is plenty more to read about his extraordinary journey and vision in the bookshops and YouTube.
In these Covid-ridden times, where we are seeing twenty-five years of change happening in a few months, having a new playbook might be just what we need. He literally is Peter Drucker’s man with a mission.
Andy Makeham has enjoyed a lifetime in software business development, as a programmer, implementor and entrepreneur. He has grown, bought and sold many business software companies and floated one on the public markets. He has worked with private and private equity owners. Today Andy acts as a business development advisor to the software sector. In that capacity he is working with SOS Inventory.