TED2019 | April 2019
Hamdi Ulukaya:The anti-CEO playbook
Profit, money, shareholders: these are the priorities of most companies today. But at what cost? In an appeal to corporate leaders worldwide, Chobani founder Hamdi Ulukaya calls for an end to the business playbook of the past -- and shares his vision for a new, "anti-CEO playbook" that prioritizes people over profits. "This is the difference between profit and true wealth," he says.
ABOUT THE SPEAKER
Hamdi Ulukaya · Yogurt maker, humanitarian
Hamdi Ulukaya is a pioneer of the natural food movement and the founder of Chobani, one of the fastest-growing food companies of the last decade.
Transcript:
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. The day before, I received a flyer in the mail that said, "Fully equipped yogurt plant for sale." I threw it in the garbage can. And 20 minutes later, I picked it up and called the number. The plant was 85 years old, and it was closing. So I decided to go see it.
At this time, I wasn't sure where this road or my life was going. I owned a small cheese shop but really hated business. But the hills and the roads and the smells are all familiar. I grew up in Turkey, in a similar environment, near the Kurdish mountains. My family made cheese and yogurt; I grew up listening to shepherd's stories. We didn't have much, but we had the moon and the stars, simple food, each other. Eventually, I came to America. I didn't even know New York had farms. I made it to upstate, and I never left. Now I'm lost.
I passed the road sign that said "Dead end." Then soon after, there it was: the factory. The smell hit me first. It was a like a milk container left out in the sun. The walls were so thick, paints were peeling, there were cracks everywhere. The factory was so old, they almost thought it was worthless. I thought they left a zero off, I couldn't believe the price. As I entered in, I stopped noticing things. All I could see were the people. There were 55 of them. Just quiet. Their only job was to break the plant apart and close it forever.
I was met with a guy named Rich, the production manager. He offered to take me around, show me around. He didn't say much, but around every corner, he would point out some stories. Rich worked there for 20 years. His father made yogurt before him, and his grandfather made cream cheese before that. You could tell that Rich felt guilty that this factory was closing on his watch.
What hit me the hardest at that time was that this wasn't just an old factory. This was a time machine. This is where people built lives, they left for wars, they bragged 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. As if they were not good enough. And I was shocked how these people were behaving. There was no anger, there were no tears. Just silence. With grace, they were closing this factory. I was so angry that the CEO was far away, in a tower or somewhere, looking at the spreadsheets 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.
I was never the same person after what I saw. On my way back home, I called Mario, my lawyer. I called Mario, I said, "Mario, I want to buy this place." Mario said, "Hamdi, one of the largest food companies in the world is closing this place, and they're getting out of the yogurt business. Who the hell are you to make it work?" I said, "You're right." But the next day, I called him again, and I said, "Mario, really, I really want to buy this place." He said, "Hamdi, you have no money.
You haven't even paid me in six months."
Which was true.
But I got a loan, another loan. By August 2005, I had the keys for this factory. The first thing I did was to hire four of the original 55 people. I had Maria, the office manager. I had Frank, the wastewater guy. I had Mike, the maintenance guy. And Rich, who showed me the plant, the production guy. And we had our first board meeting. Mike says, "Hamdi, what are we going to do now?" They look at me as if I have the magic answer. So I said, "Mike, we're going to go to Ace Hardware store, and we're going to get some paints. And we're going to paint the walls outside." Mike wasn't impressed. He looked at me. He said, "Hamdi, that's fine, we’ll do that, 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, "See these walls we're painting? 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 all of the 55 employees back, or most of them back. And then 100 more after, and then 100 more after, and then 1,000 more after that." Of if I told them, "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 number one Greek yogurt brand in the country." Would they have believed me? Of course not. But that's exactly what happened.
In painting those walls, we got to know each other. We believed in each other. And we figured it out together. Five years, me and all my colleagues, we never left the factory. We worked day and night, through the holidays, to fix that 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.
And all this time, I kept wondering -- you see, I'm not a businessman, I don't come from that tradition -- I just kept wondering: What is this all about? 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 -- it's factories, communities, jobs. But not by CEOs. CEOs have their employees suffer for them. But yet, the CEOs's pay goes up and up and up. And so many people are left behind.
I'm here to tell you: 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 last 40 years is broken.
It tells you everything about business except how to be a noble leader. We need a new playbook. 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.
So let me tell you about what this anti-CEO playbook is all about. An anti-CEO playbook is about gratitude. Today's business book says: business exists to maximize profit for the shareholders. I think that's the dumbest idea I've ever heard in my life.
In reality, business should take care of their employees first.
You know, a few years ago, when we announced that we are 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. I watched it, I've been part of it. They earned it with their talent and with their hard work, and I don't see any other way. 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 have it all ask communities, "What kind of tax breaks and incentives can you 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 -- its community is thriving. There's 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 OK, we'll teach them." We partnered with the local community college, and while we were building the plant, we trained hundreds of hundreds of people for advanced manufacturing. And today, our factory is one of the largest yogurt plants in the world.
The new way of business -- communities. 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, the businesses should stay out of politics. The reality is businesses, as citizens, must take a side. When we were growing in New York and looking for more people to hire, I remembered that in Utica, 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, it's not a rocket science." Today, in one of America's rural areas, 30 percent of the Chobani workforce are immigrants and refugees.
And it changed us for better.
The new way of business -- it's business, not government, 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, an anti-CEO playbook is about accountability. Today's playbook says, the CEO reports to the corporate boards. In my opinion, CEO reports to consumer. In the first few years of Chobani, the 1-800 number on the cup was my personal number.
When somebody called and wrote, I responded personally. Sometimes I made changes based on what I heard, because consumer is in power. That's the reason the business exists. It's you -- every single one of you is in power to make changes today. If you don't like the brand and the companies, what they 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.
The new way of business -- it's the consumer we report to, not to the corporate boards. You see, 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 all across the world.
Brothers and sisters, there are people and places all around the world left out and left behind. But their spirit is still strong. They just want another chance, they want someone to give them a chance again, not to just build it back, but 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. And if it can happen in a small town 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 all up to you. Thank you so much.
Source:www.ted.com
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