Chobani – Yogurt with a deeper Purpose
Published on 01-11-2018
What makes a company’s culture successful? On the search for an answer, we will explore different successful cultural approaches and strategies of companies across the world on a monthly basis. This month’s case study: Chobani and the American yogurt brand’s use of purpose. So, let’s dive into our first successful corporate culture.
In 2005, Hamdi Ulukaya purchased an old yogurt plant, and started to produce delicious, nutritious, and natural Greek yogurt together with a small group of passionate individuals. The company Chobani, Turkish for “shepherd”, was born. Less than five years after Chobani first hit the shelves, it became the leading seller of Greek yogurt in America with over $1 billion annual sales. But Chobani is about more than yogurt. The company is building a culture around the purpose creating “better food for more people”. From the very beginning, Hamdi put a strong emphasis on creating a community that feeds off innovation and creativity. This approach has payed off: For the last two years, Chobani has been certified as a Great Place to Work as well as one of the top 10 most innovative companies in the world.
Just about anyone can make a good product, but it’s the people that count. In the end, it’s the employees who will take it from a kitchen-table idea to the next level. There are a lot of important things in business, but the people portion comes first. – Hamdi Ulukaya
Chobani’s recipe: Purpose, Environment & Community
The core of Chobani is its flourishing company culture. And this has been the way since Hamid founded the company:
From the beginning, my goal at Chobani was not to build just a product -but to build a culture. To build tomorrow’s company.
But what makes the company’s culture so special?
Chobani’s culture revolves around the company’s guiding mission of better food for more people, which extends far beyond their product. They not only put an emphasis on an environmental friendly and responsible manufacturing practices, including a safe and humane treatment of their dairy cows, but also actively participate in their work communities (the Chenango and Otsego counties region). Based on the company’s core value: To give back. Last year, for instance, Chobani donated over 3 million cups of yogurt to local food banks and food pantries.
Other key parts of Chobani’s culture is creating a diverse and inclusive workforce:
At Chobani today, 30 percent of our employees are immigrants or refugees. More than 20 languages are spoken at our plants. This was not about politics; this wasn’t my refugee work. This was about hiring from our community. Refugees are dying to provide for their community. I always said that the minute they got the job, that’s the minute they stopped being refugees. It’s been proved to me that this was a plus to the culture. – Hamid Ulukaya
On top of that, in early 2017, Chobani implemented a new paid parental leave policy for mothers and fathers of newly born, adopted, or fostered children, offering 100% paid parental leave for six weeks for all full-time hourly and salaried employees.
At Chobani, their purpose and the cultural fit between the company and new hires plays an essential role. After all, they want their employees to feel as welcome and happy as possible. Hamid emphasises this element:
We believe that when you’re comfortable being yourself and truly love what you do, amazing things can happen. – Hamdi Ulukaya
We couldn’t agree more!
Cheap Labour versus Employee Ownership
In order to maximize profit, companies should strive to get the cheapest labor required to manufacture a market-ready product. At least that is what Neoclassical economist Milton Friedman would argue. However, Chobani is an excellent example for how models that revolves around social impact and purpose can be way more successful.
If you want to build a company that truly welcomes people–including refugees–one thing you have to do is throw out this notion of “cheap labor.” That’s really awful. They’re not a different group of people, they’re not Africans or Asians or Nepalis. They’re each just another team member. Let people be themselves, and if you have a cultural environment that welcomes everyone for who they are, it just works. – Hamdi Ulukaya
Besides offering an industry-leading salary, Chobani introduced a employee ownership programme into their corporate culture, called Chobani Shares. This profit-sharing program enabled every full-time member of the company to share in the growth of Chobani over time. Today, 10% of the business belongs to its employees.
Founder Hamdi explained the change he saw in people, once Chobani introduced the employee ownership programme:
I had 2,000 employees in 2016 when I announced that we were going to give them shares in the company. It was a beautiful day. And the company is different because of it. The staff was always proud, but this ownership piece was missing. This is probably one of the smartest, most tactical things you can do for a company. You’re faster, you’re more passionate. Your people are happier. – Hamdi Ulukaya
Integrating employee ownership into your company culture is a great way of fostering internal motivation, employee engagement and, in the end, the quality and performance of your employees. However, giving away equity isn’t the only way of establishing a sense of ownership. Here are other strategies of creating a sense of ownership:
- Include employees in key decision-making
- Provide employees with creative freedom
- Encourage employees to drive social impact initiatives
By integrating a combination of financial and creative peaks, you can build a powerful corporate culture that has its foundation in motivated and dedicated teams.
Chobani’s Culture: The Key Lessons
Looking at the corporate culture of Chobani, we can take away three major lessons:
- A strong purpose is only the beginning!
Defining your purpose is only the first critical step. After that, you need to walk the talk! Empower your team with the right language and tools that illustrate your brand’s purpose. Looking at Chobani, we see that all the hard work will pay off: Purpose-driven teams are more engaged, happier and more productive.
- Think outside the box with purpose-focused collaborations!
Together we can do more. Inviting people to join your purpose-driven movement will not only extent your external reach but also strengthen your culture from within. Chobani, for example, makes investments in social entrepreneurs via the Chobani Foundation, encourage employees to get socially involved and invites other companies – such as AirBNB, Google & Microsoft – to work towards refugee relief via the Tent Foundation. This way Chobani can extend their network, external reach, and increase employee engagement, all while staying true to their brand’s purpose.
- Employee ownership is far less scary than you think!
Millennials want more than just a paycheck from their employers. They want to work for companies that do good and provide personal development opportunities. Integrating employees into the company – quite literally – will not only increase their engagement and motivation but also decrease the risk of turnover. However, you don’t need to follow Chobani’s example and give away business shares right away! There are many different employee ownership strategies. For instance profit sharing, performance bonuses or a dynamic equity split. Actively involving employees in decision-making processes, valuing their opinion and avoiding micromanaging are great first steps. You won’t regret it!
Companies like Chobani are driven by a greater social good and in return are rewarded with highly motivated and dedicated team. On top of that, a strong purpose is an amazing base for creative storytelling and collaborative partnerships. In a nutshell, Chobani taught us that creating a sense of belonging, ownership and purpose is the way to go when establishing a successful and strong corporate culture.