Looking Back at 2019: Hamdi Ulukaya's Anti-CEO Playbook

Jan. 5, 2020
In an April 2019 TED Talk, Chobani’s founder suggests putting people above profits.

The holidays and the new year are often a time of introspection, thankfulness and resolution to do better in the new year. The below speech occurred eight months ago, and we covered it the day it was delivered, but the full text of it and its lessons seem perfect for this time of year. 

Hamdi Ulukaya grew up on a dairy farm in eastern Turkey, where his family made cheese and a little yogurt. After coming to the U.S., he bought a Kraft plant in South Edmeston, N.Y., that was in the process of closing; it became the birthplace of Chobani yogurt. Despite his success, he never forgot his humble beginnings, his immigrant background nor the help he received in building his company. So he was a natural to speak at last spring’s meeting of TED, an intellectual and business-oriented forum of inspirational speakers from very different backgrounds.

The current “corporate playbook,” Ulukaya says, is about profits, shareholders and outrageous CEO paychecks. The new playbook, which he calls the “Anti-CEO Playbook,” is about taking care of employees, taking care of communities, being responsible – including being politically active – and being accountable, not to boards of directors but to consumers. We sensed that inspiration when we made Chobani our 2012 Processor of the Year. Below are excerpts from that talk, which you can see and hear for yourself in our original reporting

“A cold January day of 2005, I took one of my most important drives of my life. I was on this road in upstate New York, trying to find this old factory. I passed a road sign that said ‘Dead End.’ Then soon after, there it was, the factory. The walls were thick, paint was peeling. There were cracks everywhere. The factory was so old, the owners thought it was worthless. As I entered, I could see the people. There were 55 of them, just quiet. Their only job was to break the plant apart and close it forever.”

He said the old factory was like a time machine, where people built lives, left for wars and bragged to each other about home runs and report cards. “But now, it was closing. And the company wasn’t just giving up on yogurt, it was giving up on them.

“I was so angry that the CEO was far away in a tower somewhere looking at spreadsheets and closing the factory. Spreadsheets don’t tell you about people, they don’t tell you about communities but, unfortunately, this is how too many business decisions are made. I was never the same person after what I saw.”

Eventually, he got a loan to buy the plant, and the first thing he did was to hire four of the original 55 people: “Maria, the office manager; Frank, the wastewater guy; Mike, the maintenance guy; and Rich, the production guy. At our first ‘board’ meeting, Mike says, ‘Hamdi, what are we going to do now?’ They looked at me as if I have the magic answer. I said, ‘Mike, we’re going to Ace Hardware and we’re going to get some paint. And we’re going to paint the walls outside.’ Mike looked at me and said, ‘Hamdi, that’s fine, but tell me you have more ideas than that?’ I said, ‘I do. We’ll paint the walls white.’ Honest to God, that was the only idea I had.

“But we painted those walls that summer. I sometimes wonder what they would have said to me if I told them, ‘In two years, we’re going to launch a yogurt here that Americans have never seen and never tasted before. It will be delicious. It will be natural. And we’re going to call it Chobani. It means shepherd in Turkish.’ And if I said, ‘We are going to hire back most of the 55 employees, and then 100 more after, and then 100 more after, and then 1,000 more after that.

“ ‘You see that town over there? Every person we hire, 10 more local jobs will be created. The town will come back to life. The trucks will be all over the roads. And the first money we make, we’re going to build one of the best Little League baseball fields for our children. And five years after that, we’re going to be the No. 1 Greek yogurt brand in the country.’ Would they have believed me? Of course not, but that’s exactly what happened.”

Ulukaya said that in painting the walls, they got to know each other, they believed in each other and they figured it out together. For five years, he and those first hires never left the factory. They worked day and night, through the holidays, to fix the plant. “The best part of Chobani for me is this: The same exact people who were given up on were the ones who built it back 100 times better than before and they all have a financial stake in the company today.”

In April of 2016, Ulukaya surprised employees by awarding them stock in the company. He reportedly gave away about 10 percent of the company from his own holdings. With the company conservatively valued at $3 billion then, the average employee got about $150,000 in value. Longtime employees may have gotten $1 million or more.

“Corporate America says it’s about profits, mainstream business says it’s about money, the CEO playbook says it’s about shareholders. And so much is sacrificed for it: factories, communities, jobs – but not by the CEOs. CEOs have their employees suffer for them, but the CEO’s pay goes up and up and up and so many people are left behind.

“No more. It’s not right. It’s never been right. It’s time to admit that the playbook that guided businesses and CEOs for the past 40 years is broken. 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 ‘antiheroes.’ I think we need the same idea in business. We need anti-CEOs, and we need an anti-CEO playbook.

“The anti-CEO playbook is about gratitude. Today’s business book says business exists to maximize profit for the shareholders. That’s the dumbest idea I’ve ever heard. In reality, business should take care of their employees first. When we announced we were giving shares to all our 2,000 employees, some people said it’s PR, some said it’s a gift. I said, it’s not a gift. They earned it with their talent and with their hard work, and I don’t see any other way. In the new way of business, it’s your employees you take care of first, not the profits.

“The new anti-CEO playbook is about community. Today, the businesses that already have it all ask communities, ‘What kind of tax breaks and incentives you can give me?’ The reality is, businesses should go to the struggling communities and ask, ‘How can I help you?’ When we wanted to build our second yogurt plant, Idaho was on nobody’s radar screen. It was too rural, too far away, didn’t have much incentives. So I went there. I met with the local people, I met with the farmers. We shook hands, we broke bread. I said, ‘I want to build it right here. I don’t need to see financial studies.’ And the result, the community is thriving. There are new schools that open every year, new food companies are coming up every year.

“And they told me, ‘You’re not going to find any trained workers here.’ I said, ‘It’s okay, we’ll teach them.’ We partnered with the local community college, and while we were building the plant, we trained hundreds and hundreds of people for advanced manufacturing. And today, our factory is one of the largest yogurt plants in the world. In the new way of business, go search for communities that you can be part of. Ask for permission and be with them, open the walls and succeed together.

“The anti-CEO playbook is about responsibility. Today’s playbook says businesses should stay out of politics. The reality is businesses, as citizens, must pick a side. When we were growing in New York and looking for more people to hire, I remembered that an hour away there were refugees from Southeast Asia and Africa who were looking for a place to work. ‘They don’t speak English,’ someone told me. I said, ‘I don’t really, either. Let’s get translators.’ ‘They don’t have transportation.’ I said, ‘Let’s get buses.’ Today, in one of America’s rural areas, 30% of Chobani’s workforce are immigrants and refugees. It changed us for the better.

“In the new way of business, it’s business, not government, that is in the best position to make a change in today’s world – in gun violence, in climate change, in income inequality, in refugees, in race. It’s business that must take a side.

“And lastly, the anti-CEO playbook is about accountability. Today’s playbook says, the CEO reports to the boards, corporate boards. In my opinion, the CEO reports to consumers. In the first few years of Chobani, the 1-800 number that was in the cup was my personal number. When somebody called or wrote, I responded personally. Sometimes I made changes based on what I heard. That’s the reason the business exists.

“It’s you, every single one of you is empowered to make changes today. If you don’t like the brand and what the companies are doing with their business, you can throw them into the garbage can. And if you see the ones that are doing it right, you can reward them. In the end, this is all in our responsibility. In the new way of business, it’s consumers we report to, not to the corporate boards.

“If you are right with your people, if you are right with your community, if you are right with your product, you will be more profitable. You will be more innovative. You will have more passionate people working for you and a community that supports you. And that’s what the anti-CEO playbook is all about. The treasure that I found in that factory – dignity of work, strength of character, human spirit – is what we need to unleash across the world.”

He concluded by saying there are people and places all around the world that have been left behind, but have a strong spirit. They want and deserve a chance not just to build it back but to build it better than before.

“And this is the difference between return on investment and return on kindness. This is the difference between profit and true wealth. If it can happen in small towns in upstate New York and Idaho, it can happen in every city and town and village across the world. This is not the time to build walls, this is a time to start painting the walls. I leave the colors up to you.”

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