Charles Koch On ‘Good Profit’ (And The Kansas City Royals)
Businessman and philanthropist Charles G. Koch has a new book out called Good Profit, and I had a chance to ask him a few questions about it:
MKL: To kick this off, your new book is titled Good Profit. Is there bad profit? If so, what’s the difference?”
CGK: Good profit is earned by helping people improve their lives through voluntary and cooperative transactions that benefit everyone involved. These types of transactions are win-win. Bad profit is the opposite of that because it diminishes someone else’s well-being. For example, in Washington – and really at all levels of government – we’re seeing politicians rig the system to benefit a select few.
MKL: Does this win-win philosophy apply to competitors and employees?
CGK: You bet. In writing this book, I’ve been asked, “Why would you want another individual or business or organization to improve?” The answer is because all of us benefit when others profit in a principled way. When a business succeeds this way and provides a new technology or way of doing things that replaces an old, people in society are ultimately better off. And it’s why Koch employees are incentivized to understand customers’ unmet needs and find ways to satisfy them better than existing and potential competitors. Our goal is to motivate all employees to maximize their contribution, regardless of their role, and reward them for doing so. At Koch, anyone can earn more than his or her boss by creating more value.
MKL: Do you see any parallels in this win-win philosophy to political compromise?
CGK: It could certainly apply to politics. Sure. But there seems to be a lack of willingness for politicians who hold different points of view on most things to come together on some things for the good of everyone. I share the view of Frederick Douglas who said, “I’ll work with anyone to do good and no one to do harm.” It’s that view which has led to our work with the Obama Administration and the Coalition for Public Safety, among others, to reform the criminal justice system and address the issue of occupational licensing, both of which are obstacles to opportunity for the most disadvantaged in society.
MKL: Koch Industries is based in Kansas. Are you rooting for the Royals to win the World Series?
CGK: Finally, the important stuff! Did you see that comeback Monday night? I’m hoping for the best in Game Five this Wednesday. It’s a fun time of year to be a sports fan in Kansas. Keep an eye on my Wichita State Shockers this basketball season. Coach Gregg Marshall continues to do great things with those kids and that program. They’re fun to watch, not the least because he does things the right way – with integrity.
MKL: Thank you for taking the time to talk with us.
CGK: My pleasure.