Simon Mainwaring

We First provides consulting and training to help companies tell the story of their good work in ways that build their business

September 10, 2018

How Chobani Builds A Purposeful Culture Around Social Impact

Written By Simon Mainwaring

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Neoclassical economist Milton Friedman would argue that to maximize profit, companies should strive to get the cheapest labor required to manufacture a market-ready product. Indeed, many corporations outsource work to sweatshops in developing countries where labor is cheap and laws are lenient. In practice, however, strong teams build strong businesses. Recent research from Deloitte show that, contrary to Friedman’s beliefs, businesses that craft purpose-driven teams improve efficiency, reduce turnover and increase profitability.

Chobani, America’s leading Greek yogurt brand

A prime example of a business that sees attractive returns from its investments in purposeful corporate culture. The $1.5 billion brand not only pays workers in its upstate New York factory over twice the minimum wage, it also has an equity sharing program in which employees collectively own 10% of the business.

Founder Hamdi Ulukaya says that once he implemented the profit sharing model, he saw a change in his people. People take pride and ownership in the brand and their work when they have equity stake. This type of corporate structure fosters internal motivation and yields top quality performance.

Ulukaya doesn’t stop at a living wage and profit sharing — he weaves social impact throughout his culture to push the “future of food forwards.” Chobani showcases its impact via the Chobani Foundation and the Chobani Incubator. Through these outlets, the yogurt brand funds other startups in the health and wellness space and encourages its own employees to volunteer. Ulukaya also actively hires refugees and created the Tent Foundation, which is building a coalition with over 80 companies that hire and support refugees.“The minute that they got the job, that’s the minutes they stopped being refugees,” Ulukaya told Inc.Magazine.

We can learn from Chobani that regardless of the nature of your business, cultivating a sense of belonging, ownership and purpose in your employees is a sure way to strengthen corporate culture.

Here are key lessons from Chobani on how to strengthen corporate culture:

  • Shape culture around purpose: Purpose is a critical factor to building high performance teams. Once you articulate your purpose, you must ensure that your entire staff is also onboard. By empowering your team with the right language and protocols to contribute to your brand’s purpose, you can transform your employees into highly effective brand advocates. It’s essential that all employees have a clear understanding of the company’s reason for being and how they contribute to advancing it. But doing so unlocks value across the entire business as purpose-driven employees are also more engaged, happier and more productive. Chobani is a great example of building culture around purpose ensuring “better food for more people,” in its product designs, healthier communities in which it operates, and more productive employees and external partnerships.
  • Pursue purpose-focused collaborations: Inviting others to join your purpose-driven movement expands your impact and reach. Ulukaya expands the impact of Chobani’s health and wellness work, as well as refugee assistance, from internal culture to its external outreach. By making investments in social entrepreneurs via the Chobani Foundation and Incubator, Chobani is able to fund innovation on a small scale. By encouraging employees to get involved in social good, Chobani gives its internal team an opportunity to contribute to making an impact. Additionally, by inviting other organizations — such as Airbnb, Google, and Microsoft — to work towards refugee relief via the Tent Foundation, Ulukaya is able to make unlikely partnerships, which can also benefit Chobani. Ultimately, by aligning around a shared value that is bigger than your brand or industry, you can strengthen your team, expand your network, but also gain earned media and word of mouth advertising.
  • Encourage employee ownership: Today’s talent want more than a paycheck from their employers. Millennials particularly want to work for businesses that do good and offer growth opportunities. There are numerous ways to give your team members ownership. Some strategies include profit sharing, performance bonuses and a dynamic equity split.

Ownership vs. Equity

However, ownership doesn’t have to mean giving away equity in your brand. You can   also foster a sense of ownership by including employees in key decision-making, making space for creative freedom, or encouraging employees to drive social impact initiatives. The combination of financial and creative equity is a powerful way to build motivated and dedicated teams.

Companies that leverage their business for social good are rewarded with motivated teams and improved performance. What’s more, purpose offers excellent opportunities for collaborative partnerships and engaging storytelling. The secret to doing so is stakeholder buy-in and that’s best achieved by ensuring everyone knows how their work contributes to a higher purpose and creating the opportunity for them to experience the fulfillment from doing so.