For Chobani’s CEO, leadership means putting your people first

Founded in 2005 in an abandoned Kraft yogurt factory, Chobani pretty much created the Greek yogurt category in America. But Ulukaya didn’t just start a trend. He also created a new way to run a company—one focused on community, customers, and an involved workforce.

On this week’s episode of Coins2Day‘s Leadership Next podcast, co-hosts Alan Murray and Ellen McGirt talk to Ulukaya about the incredible growth of Chobani, the employees he credits with building the company, the many reasons he supports putting refugees to work in America, what he has focused on throughout the pandemic, and much more. Listen to the episode or read the full transcript below.

Alan Murray (00:02): Leadership Next is powered by the folks at Deloitte, who, like me, are super focused on how CEOs can lead in the context of disruption and evolving societal expectations. Welcome to Leadership Next, the podcast about the changing rules of business leadership. I’m Alan Murray, and I’m here with my unbelievably fantastic co-host, Ellen McGirt.

Ellen McGirt (00:27): Thank you for that, Alan. It makes my week every time I hear you introduce me. And hello, everyone.

Murray (00:32): Makes the podcast a little longer each time. But it’s worth it. It’s all worth it.

McGirt (00:39): Yes, and you’re modeling such a loving way to be a leader and a colleague, so I appreciate that, too. Speaking of loving ways to take care of other people: Today’s guest has me hungry and has been feeding my family for a long time, as you can see. You can’t see, our listeners—I’m holding up some delicious yogurt.

Murray (00:57): Yeah, our guest is Hamdi Ulukaya. He’s the founder and CEO of Chobani. The company has expanded into other products beyond yogurt. I’ve had their oat milk—I had oat nog over the holidays—but it’s best known for Greek yogurt. Chobani really popularized Greek yogurt for many American consumers.

McGirt (01:17): He sure did, and I think it’s worth just quickly recapping Hamdi’s story, because it’s really an exceptional one. He immigrated to the states from Turkey and found a spot in upstate New York that really felt like home to him. And I’m fast-forwarding here, but he ended up purchasing an old yogurt factory that had been abandoned by Kraft in 2005. And by 2007 had yogurt on the shelves. It quickly became the top-selling Greek yogurt, as you mentioned, in the country, but it’s really about his principles and action, reclaiming jobs for communities and now thinking about how we welcome other immigrants and refugees to the United States, finding them jobs and helping them become part of society. It’s an incredibly beautiful story.

Murray (02:04): It is a beautiful story, a very people-centered story, a great example of stakeholder capitalism at its best. I mean, he runs a very successful business, but he does it with a very clear view about people he wants to help.

McGirt (02:18): He really does. And the other thing our listeners may have seen about Chobani recently is that the company has filed to go public via an IPO on NASDAQ. SEC rules say Hamdi can’t really talk to us about that, but we’re still glad he’s here. Hamdi, welcome to Leadership Next.

Hamdi Ulukaya (02:33): Thanks for having me. I hope everybody’s okay. We’ve gone through so much challenges.

McGirt (02:39): We have. But, Hamdi, you know, maybe we could go back to those early days of the pandemic and just how things unfolded for you and your employees, and your customers, and the community that we know that you care so much about.

Ulukaya (02:50): I look back and I mean, we would never think something like this would happen. We never thought that we would go through something like this, and then there are a couple of dimensions that you go through. Fear, worry, you know, everything that comes with it. And then how? What do we do now? You know, how do we get through this? How do we operate? How do we work? And then you think about okay, what’s my responsibility? Forget about surviving, how am I going to be participating? Or making sure that not only me personally or family wise or company, but as a society, we pass through this.

And I remember the early days, I remember having the conversation with my team members. We realize that all along at Chobani, we always talked about this. Is the factory workers, the truck drivers, the frontline workers, we talk about it, you know, we talk about it all along, realize that this is going to be on the shoulder of those people, those simple people that work so hard. The second part of this is we make food. Food is going to be essential. People are going to need food, people are going to have to have food and how do we get food to people are going to be extremely important. And then we’re facing these challenges of people get sick and may be hospitalized and sometimes die. And these worries that they’re going to carry into their families. How do we make sure that the safety of the people that they’re going to be so much needed is going to be in the center of this whole thing?

I made it very simple three things. One is make sure that everybody’s safe. The second part is we have to continue to make yogurt goods and products that we make so we can get to the people and run the operation, run the factories. The third thing is, not in order of importance, is we have to be part of our community. We have to make sure that we participate in community for reason of they will need enormous amount of food. The second part is the more like an emotional, symbolic way is that brands and companies and CEOs have to lead during the pandemic type of times to make sure that people see that these times will pass if we get together and do things right for society. And we got to work and I have to tell you, look back after maybe a year, year and a half, there has never been a proudest time that I have been how company people have performed during this time.

Murray (05:10): That’s a great opening statement, Hamdi, of how you approach your business. You know, we live in a moment when a lot of CEOs are talking about their commitment to their employees, their commitment to health, their commitment to customers, their commitment to the community. But I think it’s important for people to understand you were doing this before there was a pandemic. You had a very different view of your responsibility as the CEO. And I wonder if you could talk about what that was. Why did you say the CEO playbook is broken and where did that come from for you?

Ulukaya (05:42): That comes from my background. I’m a farmer’s boy. I grew up in a very rural part of Turkey. And I have seen the ugly part of responsibility of business growing up. And maybe I saw it in a more dramatic way than I had seen it here when I settled in upstate New York but it’s a similar behavior, right? So you have rich you have successful and they kind of think that they are chosen ones. And then their ordinary people pay a price for it. And this distance, especially on the leadership to the people in the community or working class is a big crack, big deep crack, and you’re either going to be okay with it, or you grow with anger and join the rebellions and whatever it is in some part of the worlds. But the problem is the problem.

And the second part of this is you look for the political solutions or, you know, different areas the solution you’re trying to find, but the solution is in the hands of CEOs and the boards and the businesses, and if they behave tiny bit better, their life gets better. And if they behave a little bit better and a bit more better, you know, the people’s life immediately get affected by it. So I’ve never seen myself, Alan, as being part of this world when I was in my early 20s or maybe when I was in high school. And I thought it was a dirty field and I would never get involved with it, that you have to be a certain part of person, but you take it from the ordinary and that’s how you get well off or rich, you know in a simple term. I saw a different picture when I arrived to us and settled in upstate New York. And then I did not have an experience of going to business school or I’ve never had this close proximity to business.

But I thought what if that I don’t have to be different than when I was growing up, the boy that I was growing up and thinking that business should be more responsible. But yet, I could make yogurt that people love and create something that I would be proud of. And without having that proximity to any knowledge and I worked in that factory for seven years never left, and what I saw in that factory that I bought, that a large corporation left and left behind people that worked in that factory for 70 years, so many generations, left a junk plant and left an environment that was damaged for years and there was no one from the high tower to say goodbye to these people.

And when I went back and grabbed few of those people and say what if we can turn this around and make this completely different? And I never knew that one day I would be in this camera and the microphone and talking to you guys about it. It was just what if, and put on the white coat and you know, and and go on the line and work with the people and side by side. And yes we don’t have money. No, we don’t have experiences. No, we don’t know how we’re going to make this happen. Yes, we know that these mountains are so big and there’s massive big corporations and companies enormous amount of resources and maybe our chance of surviving is very very slim. But I bet on people and those people have made impossible possible.

Murray (08:57): Yeah, no, it’s amazing that the story is so amazing. I mean, here we are. Sixteen, 17 years later, you’re making a billion and a half dollars a year in revenue. You yourself are a billionaire as a result and you’re about to do an IPO. It’s an incredible story that I would imagine you couldn’t have imagined back in 2005.

Ulukaya (09:19): Absolutely not and those people wouldn’t but, you know, we are talking about a sector that it’s almost impossible and I’m not saying impossible, but almost impossible in a large food-making environment that you could start something and 10 years 12 years later lead the category that you started going against, you know companies multinational companies. In technology in some of the sectors is really possible, but this in this one, it’s a very capital heavy and the rule of business in food making that value exists at a large scale. I’m not talking about specialty but in the large scale. It is probably one of the hardest thing to crack it and it’s in the shoulder of people. And I have to say and people give me credit and I will take some of it, is the factory workers, is the truck drivers, is the people who drove the milk trucks from the farms. It’s the line workers. It’s really that simple. It’s that simple, that those people needed a reason to believe and fight for it. And it became more valuable than experience, it became more valuable than money or resources.

And within five years, they took that plant, six years, they took that plan to create a billion dollar business with it, without even raising capital. So the motion I didn’t do it for that reason. I wanted to do something that I’m proud of that I would be comfortably in it that I don’t have to go against myself and I realized that if you are centered in those dimensions, this is really good for the business, you could do impossibles. That’s where that anti CEO feeling came from after those 12 years of experience and saying if you’re centered with people in communities, if you’re centered with all the stakeholders like you guys have been so passionate about, and if you are centered with consumers that you’re making products, and if you are centered in societal issues, these are not against business. These are additional engine to your business. That will be most powerful than anything else that you have.

[Music]

Murray (11:30): I’m here with Joe Ucuzoglu, who is the CEO of Deloitte US, and had the good sense to sponsor this podcast.

Joe Ucuzoglu (11:37): Thanks, Alan, and it’s a pleasure to be here.

Murray (11:38): Something big seems to be going on in the world of business. There’s a shift from a focus on shareholders to a focus on stakeholders. I’m hearing this everywhere. Why is it happening?

Ucuzoglu (11:49): This is a realization that if you effectively serve a broad cross section of stakeholders, that’s actually conducive to generating a premium return for shareholders. This is not an either or. Maybe in the short term, one could prioritize profits at the expense of other constituents. But in the long term, you have to align those interests to deliver premium shareholder returns consistently.

Murray (12:14): A lot of people I talked to want to know is this real? Or is this just a public relations exercise?

Ucuzoglu (12:20): This has been built into the core of leading companies strategies, and you’re seeing the landscape shift drastically. Cues from leading investors around the way in which this is driving capital allocation decisions. Very tangible climate commitments for many large organizations, and a very significant interest from our employee base around their desire to make certain that the organization they work for aligns with their values.

Murray (12:50): Joe, thanks for being with us.

Ucuzoglu (12:52): Alan. It’s a real pleasure.

[Music]

McGirt (12:58): I want to recommend for our listeners, a short documentary about you that was created by Vice called Moving Humanity Forward, which tells in greater detail the origin story of Chobani that you touched on just now. But I want to build on one moment in there. You’d found the abandoned yogurt factory. You had resettled to this part of New York State that felt like home, you felt welcome.

All of the nascent things that you care about are starting to come forward, your concern and care about refugees and workers and communities and family and making family with the people around you, all of that stuff. And you get the financing and you get the yogurt factory and you’re there with the I think first four or five employees, and they ask you what’s your plan and you say I didn’t want to tell them I didn’t have one. Everyone got paint and decided we’re going to paint the walls white. And while you were doing that, you started to get to know each other.

And I mentioned that because it’s a great story, but also I’m curious looking back now that you’re so successful and poised to grow even more, if you can identify some key elements of leadership that would help people better able to empower the folks around them or give them a chance to make decisions because it seems like you were very good early on at sharing power effectively. Does that seem like a fair assessment?

Ulukaya (14:24): Absolutely. And I I appreciate that. You bring it up and it’s not too, you know, distanced history. It’s still you know, I’m more gray now, but it’s only been 10 15 years, like Alan said, and those people are still in the plant. They’ve seen all this magic happen in front of their own eyes. And they know that they’ve been part of it. I think the difference between the people who left the place and fortunately me, they left without seeing people. I started because I saw the people and that’s really the key thing.

The second part is I’m a foreigner, I came to this country in my early 20s. And sometimes when you come from that distance place, you see things that sometimes people in that place don’t see. I have a very famous poet Rumi, who lived in Turkey, is Persian. And he says when you see ruins often where there is ruins, there is treasure. And I saw treasure in that old factory. I saw a community that I loved and I saw people that was hardworking that you could trust and you could be could be shoulder to shoulder even though I had a broken, you know, English and I saw an opportunity in the marketplace. Let’s not forget, the company who left was making yogurt but making a lousy one and I thought I could make a better one, and with these people I could do it. If I can bring to the one attribute the whole thing was, I made decisions, I made decisions always with people that I work with, always. So it was never dictated, it was collectively we made decisions and it became a tradition at Chobani.

The second part is we created trust. Really we sit down and we said how can we create a place where people can trust each other. And I think one of the biggest thing that we had in Chobani is we trust each other and I’m not without any fault I made mistakes. You know we are all human beings and we do but for the most part and the major things that we can at least trust each other.

The other one I mention, I think, this is the one of the most important things is it is an upstate New York little town. I am from Turkey. There was Frank [last name hard to hear], who was traveling through the 22 years before I came there, and he saw that there was no pizzeria and he opened the pizza and married the local girl. He was the only guy foreigner that they had seen until I showed up. Where do you trust that you could bring refugees settled legally in Utica, they could come to that factory from all kinds of backgrounds from Africa, Southeast Asia and South America. That where do you trust that there will be no social clash?

McGirt (17:05): Yeah, right. Right. I try.

Ulukaya (17:08): I trusted that because early days I said anyone, anyone, I don’t care if they are seven generations local here or they come from some other places. If I can create a place where everybody can be themselves, with positives and negatives, so called, if anyone can be home and God if I can make that happen when we have so much time not to waste but so much time that we can focus on our business instead of pretending to be somebody

Murray (17:39): But we’ve got to talk about that a little bit more how many because that of course is one of the most remarkable things about your career as CEO. You had this commitment to refugees. I assume it came from your own background as a Kurd in Turkey. But you reached out to Syrian refugees, Somalian refugees, Haitian refugees, Afghan refugees. It is not a natural act in small town United States of America to say, hey, we’re going to bring Syrians and Somalians and Afghans and Haitians here to work with you. In a town where, as you say, you and the pizza guy were the only two foreigners in the community. How did you make that work? That had to have met some resistance.

Ulukaya (18:20): So I trusted, I trusted my people. I lived in town in Utica, and it’s in that documentary Ellen, that you talked about. And when we hired everybody back, we expanded and expanded in this town in Utica where I used to live. And I heard that people in this community settled in this place and they were having a hard time to work, find jobs.

And I went to the center and I said what is the problem? And simply she said, this amazing leader who was leading the place, they don’t speak the language. They don’t have transportation to go to work. They don’t have the trainings that people need and the other point is, you know, the reality is people don’t want to touch it.

And I said, Wow, that’s just that’s it. That’s okay. If you rent some cars until they get their own. If we get some buses, they can go there. If I can get some translators to translate in the workplace so they can understand and then be trained. And then the last part is I trusted my people that they will welcome them as they welcome me. And it was not refugee work, it was a community work. These are the people in the community.

They needed to work, we were hiring, and I was going to do tiny little bit of extra work for them to be not caught an HR conditions, but they will pass through that. When I saw after they came in and they became the discussion in 2016 and this stigma around refugees, that really, you don’t stop being a refugee when you come to a safe place when a country opens their doors for you. It really ends when you start working. When you get a job. That’s the moment you stop being a refugee. That’s the moment you stand on your feet. That’s the moment that you bring to your families and provide to your community.

And that idea that when I saw in the Chobani’s floor I thought, wow, if businesses can get involved, and in this simple act of hiring and removing those obstacles, people’s life can change dramatically. And if we can make the argument, which is true, we did a lot of scientific studies, that if you bring these talented, passionate, survived people, who are anxious to get back to work, get back to life and provide to their families. The enormous amount of benefit that you get for your business and to society and community is enormous. [Hard to hear] And in the last example of Afghans coming to this country, we had about 65 large companies immediately came up and says we are committed to hire, it became a really a good side journey.

Of my Chobani journey is one topic which is refugees being part of political landscape so unfairly and so painfully, where is filled with women and children and vulnerable people who have gone through so much pain through their life. Their business has been completely absent, not because they don’t want to maybe they don’t know how to and bring in them to their home and bring them to their workplaces and let them be part of their culture, it’s been anonymous for Chobani and a lot of stories now, because of the work that had been done by Tent and my conclusion is we get too driven by fear sometimes with sometimes we don’t know, once people get to know each other and spend time and to learn from each other and create friendship and relationship, magical things happen. And that’s what I saw in my experience in Idaho and upstate New York is these people from different backgrounds. And the people my brothers and sisters in that local community, they’ve been there for so long, with the interactions, their life dramatically got deeper. This changed. They got to know others and they get to appreciate but what they have. So these interactions is extremely beneficial for culture, of course for us, for all of us. And one person can make those decisions is the CEO. It’s the leadership. It’s just a simple once the direction is made and freedom is given for people to act upon it. I think most of the people will make those decisions really, really heavy heartedly.

McGirt (22:29): I just want to flag you were talking about your Tent Partnership for Refugees, which you started in 2016 and the more recent Tent Coalition for Afghan Refugees. And I’m looking through some of the lists of companies you know, Amazon, Facebook, Uber, Hilton, Gap, Pfizer, Tyson Foods. All of them are very different from each other. All had different company cultures. I’m curious how you’ve encouraged the leaders at all of these companies to share best practices and support each other because it seems like that’s going to be an important part of success there. What kind of cross-pollinations been going on?

Ulukaya (23:04): Tent not only gets the commitment, we stay organized, share best practices, mostly on the people side, HR side of the world. I’m very much involved, but I’m very proud of the team what they do. And this Afghan refugee situation, I have to tell you, Biden administration has done a really, really good job creating a central, I should say, I don’t know what they call it, a central command center where NGOs, the State Department and Homeland Security, and the business community and all of us you know being connected, we attend. Of course we have done this for so long. We do the outreach for companies and businesses I can sign up.

Now there’s a couple of reasons what has happened, I think on the Afghan refugee side. There’s enormous amount of support across the country, for the refugees that come from Afghanistan, and we saw it you know, people really cared because these are the people who helped our soldiers up there, you know, they put their lives in front of them and the veterans and soldiers in the families they were extremely supportive of this. The second part is the shortage of labor, right? Yes, this is reality. Everybody’s looking for labor. And this was a time that people realize that you know, the refugees are one of the hardest working people and we saw it in the frontline, you know, in the hospitals and nurses and factory workers and truck drivers and all all of those sectors, and they needed more work. And these are dedicated people who are eager to work.

So between favorability of the Afghans who were in danger of their life and the labor market, I think made it a lot easier. But a lot of hard work was done before. So some of those 65 companies were already part of Tent. And they were already hiring and training here in the U.S. And around the globe, some of them are multinationals. So I think a couple of things came together that we came to a place where companies immediately walked in and said we want to be part of this.

Murray (25:02): Hamdi, where does Chobani go from here? You filed to do an IPO this year. I assume that gives you some extra access to capital. Nobody would have predicted 15 years ago that you could build the yogurt empire that you have built. Now we’ll believe anything. So tell us what you’re going to do now. Where do you go next?

Ulukaya (25:20): I go in the same direction of I always said Alan, is I’ll make good food for all people. I didn’t like how business was conducted itself, especially on the manufacturing and food making. But the second part is, I didn’t like that you would go to Whole Foods in New York City or some specialty stores that you will find a couple of good yogurt or some other good foods. Maybe you will pay a little bit extra for it. But you go to a store in upstate New York and you couldn’t find anything that is good, that is accessible.

And I realized that this world is separated in two worlds. One is mass food manufacturers, which is in the hands of large few CPG companies maybe 10 12. We call it big food, and then there is specialties. And access into good food with an accessible price is a thing in this country. It still is and it was a lot worse 10 12 years ago. And I thought if I could make a simple good food that I could feed to my own children, and everyone who comes works at Chobani they can feed their own children proudly from the ingredients, from the instructions, from the taste. Wouldn’t it be amazing that instead of going to a specialty we go to mass, we go to places where 95% of the population shops.

And I started with yogurt but I never thought that that’s where I will end but it took me 10 years to be able to figure out how I’m going to build factories to supply to all across the country. Just before pandemic we launched oat milk, which I thought it would be a beautiful thing to do. We launch our creamers we launch our coffees. These are really super growing categories that we have launched. I’m a food maker. I’m a passionate food maker. We focus on food more than anything else, the product. So we have a lot of stuff that we’re working on.

But I will tell you one thing is I think making good food and making accessible in this country is an enormous opportunity for any startup or any company to get involved. This is probably one of the hardest thing to crack it for the startups but for an opportunity perspective, I see a lot of opportunity there. I do have product type of you know plans where we’ll go from there. But for the most part, what I want to do is to keep this company the way it has been for the last 14 15 years, where we focus on people, community and society. And we focus on the food that we make and we focus on making this good food and healthy good ingredients and bring into people’s life.

But yet, I don’t want to be a large corporation. The state is small, when it comes to decision making,when it comes to environment. So that’s the biggest challenge that I face, not to opportunities, the product that I go into is how do I make this more impactful, but yet, keep it what it has been at the center. So that’s a fight. That’s a work. It’s not a given. And that’s probably one of the most important thing for me.

McGirt (28:26): You already answered one of our final questions of our lightning round which is a new feature to the podcast in 2022. We ask all our guests to give us a short answer maybe just a sentence or two about where they fall on some key issues and you hit one of them right there, was just perfect. But the first one would be what’s your biggest concern going forward about COVID?

Ulukaya (28:47): I don’t know what kind of [hard to understand] come nobody knows. But my concern after COVID Is the world goes back to what it was before COVID, that we don’t learn our lesson. And we have learned a lot during this time. We have learned that no one is separated. We are in the same place when it comes to health challenges. We have learned that in this country we face a lot of racial, gender, rural or you know different geographic type of challenges that people life is in the front it came to a surface and we saw it we cannot say we didn’t see it anymore. And we don’t do anything about it. I always said you know we don’t want crisis and challenges, but we don’t want to waste it either. Right?

So I went back to that factory in 2005 2006, and I said that fact that that close after seven years one of the worst thing has ever happened in that community. Five years later, people said that was one of the best thing ever happened because now it’s a lot better. It’s within our reach to look at our society pre-COVID. And then five years from now we look back and we say you know what? We’ve done so much good things in business and politics, in social life, in all the aspects we’re seeing, all those challenges. And we have made some moves that humanity move forward in a right way.

I do have enormous amount of concerns here in America and around the world that if we don’t make those changes, our children will face some hardship. Individually myself and for Chobani, look, I’m very protective of it. I think it’s a very special place. I will not make decisions for you know, various generations and all that kind of stuff. But Chobani is ready to move to a new dimension, is ready to make more products, reach to more people and have more impact on life in society. And I want to make that in timely ways and I spend a lot of time and worry about those things to be right decisions, so I trust the people around me to make the right decision. So between those two, I think I’ve learned a lot about myself and about the company during the COVID and I’m so glad that people saw a lot more about what we face in society when it comes to those challenges and the conversations about what business should be. And Alan I mean, you’ve, you’ve done it this many times. And you know, we talked about it, like you mentioned, what’s the role of business and most of these challenges can be led and solved by businesses and I hope that this movement goes in the right direction. I read your last piece about the book that coming out and you’ve said it perfectly there too, there is still a long way to go. But we have made some gain and I’m extremely hopeful.

Murray (29:04): Ellen, did you have another question you wanted to get in there?

McGirt (31:23): Well, I mean, no, that was just the perfect place to end. You’ve hit all the elements in your entire answer.

Murray (31:48): And Hamdi, let me say if the CEO playbook was broken, it is not anymore. You have fixed it. I hope people are paying attention to what you’re doing. We’re going to be cheering you on and we’ll test all your products. Just send them our way. We’re happy to be early adopters.

Ulukaya (32:05): Thank you so much. You’re very generous and so good to see you all. And see you soon.

Murray (32:11): Great to have you here. Thank you. Leadership Next is edited by Nicole Vergalla, written by me, Murray, along with my amazing colleagues, Ellen McGirt and Megan Arnold. Our theme is by Jason Snell. Executive producers are Mason Cohn and Megan Arnold. Leadership Next is a production of Coins2Day Media. Leadership Next episodes are produced by Coins2Day‘s editorial team.

The views and opinions expressed by podcast speakers and guests are solely their own and do not reflect the opinions of Deloitte or its personnel. Nor does Deloitte advocate or endorse any individuals or entities featured on the episodes.