So last Friday morning the Wichita Business Journal (the article is only unlocked for a week) in an effort to revamp their journal came out with a profile of Charles Koch. Koch is not known to give very many interviews. Although in the past few years he did one with Forbes and one with the Wichita Eagle. The story of how the interview came about is interesting (more on that later).
In the interview done in February 18, 2014. From the pictures Charles Koch looks very relaxed wearing an Oxford Polo Shirt (who would think a billionaire would wear Ralph Lauren-that isn't Ralph Lauren). Koch talked about a number of different things like why Koch Industries is still in Wichita (I was even surprised he quoted Hayek on that). On innovation when asked why Charles Koch who is 78 years old and still shows up up to work everyday. According to Koch "I may be old, but I'm not dead yet". Koch Industries is still trying to integrate Molex from their merger last year. I would imagine Molex employees are learning more about Market Based Management. Koch said that Molex has to "get an idea built and get it commercialized immediately". Molex makes connectors that go into computer and electrical products (wait I thought Koch Industries was an oil giant). What is really interesting was Koch discussing products that can learn themselves. He discussed about building a computer into a glass mirror that could learn to adjust the temperature or the amount of light to come through the mirror all with the press of a button. Koch Industries has also made some interesting investments like into American Greetings (a card company). Essentially, Koch provided capital to American Greetings in order to take the company back. Charles Koch points out that it is hard to give a loved one the same message from a digital card as a hand delivered card. Koch said he liked the new technology in the drilling business (however he doesn't want to get back into that industry).
Chase Koch is the son of Charles Koch and earned his BBA in Marketing from Texas A&M University and has been with the company since 2003. I talked about Chase Koch and possible estate planning here. Charles Koch even challenged if his son would be the best person for the job. I honestly believe that if Charles Koch didn't believe his son was ready he would not have him on board with the company. Koch Industries has a large bench to pool from in terms of talent in the future if needed.
When talking about his political views Koch is really trying to save the country by promoting limited government and free markets. He talks about cronyism and the barriers to entry (taxi medallions or required schooling for hairdressers). Koch does correctly point out that make it harder for poor people to advance "for disadvantaged people trying to get started, its unconscionable in my view". Honestly, it seems clear the Charles Koch does want to help poor people. Thomas Sowell once said that the difference between Democrats and Republicans is that Democrats want to give the poor money while they are poor and Republicans want to help poor people stop being poor. Koch talks about long-term interest instead of short-term interests. Since Koch is private they don't have to worry about analyst meetings or quarterly earnings. In this interview from 2007 Koch said "a public company has to cope with the extreme focus of the analysts and the equities market on quarterly earnings. Someone misses quarterly earnings projections by a penny, and their stock goes down 10 percent". Most people actually incorrectly believe that companies are just into the bottom line for the short term. However, if you constantly make bad decisions in the short run you won't be around for the long run. Koch points out that "people should only profit to the extent they make other peoples lives better. You should profit because you created a better restaurant and people enjoyed going to it. You didn't force them to go, you don't have a mandate that you have to go to my restaurant on Tuesdays or Wednesdays or you go to prison". Gee, for some reason I have this feeling if I don't purchase healthcare I get some time of penalty. When talking about political contributions and his interests it should be noted that Charles Koch, David Koch, and Koch Industries are subjected to death threats, cyberattacks (speaking of which a 24 year old Iowa man got busted for trying to launch a cyberattack on the Koch website). I saw someone from Young Turks explaining how it was nice that young people were realizing that Koch Industries was a bad an evil corporation and even liberals should feel a little proud when the company gets hacked.
It was interesting to see the Charles Koch Foundation is working with Michael Rowe from "Dirty Jobs" in order to explain to people they don't need to get a liberal arts degree and that some people who have certain talents can make very good money my satisfying needs and wants of people.
A nice feature of the article is when former Koch employees reflected on there time at Koch. Nearly all of them said it shaped how they thought and had a positive effect on who they become as business people. Former employee Patrick Ahern said that in one year he learned so much he would have paid to work at Koch Industries.
According to reports Koch Industries decided at the last minute not to allow video during the interview (probably for security reasons). It is pretty clear that Charles Koch and his brother David Koch unfortunately have to have armed guards 24/7 to protect them because people fundamentally don't agree with their ideology. The ironic thing is that these people who complain are most likely using a Koch Industries product. If they use the toilet they most likely used Georgia Pacific toilet paper. If they dried their hands they used a paper towel from Georgia Pacific. After the purchase of Molex, if anyone has a iPhone it was created partly by Koch Industries. The list goes on and on of products that Koch creates that every day people use (probably without even realizing it). What is even more interesting is that Koch to my knowledge doesn't explore for gas like actual companies (Chevron, ExxonMobil, and the rest).
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