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Charles Koch
Chairman and Co-CEO, Koch, Inc. (formerly Koch Industries, Inc.)

Becoming a Principle-Driven Leader | Charles Koch & Chase Koch with Askia Ahmad — Wichita, KS

📅 Jul 09, 2026 Becoming a Principle-Driven Leader 76 MIN 62 VIEWS 126 SEGMENTS · 3 SPEAKERS
Becoming a Principle-Driven Leader came home. Charles Koch and Chase Koch joined a moderated conversation at Wichita State University's W. Frank Barton School of Business—in the city where these principles have been lived and tested for decades. Thank you to Askia Ahmad for leading the conversation, and to everyone who came out. Get the book: https://www.principledrivenleader.com/ Explore the Principle Companion: https://chat.principledrivenleader.co...

What Charles Koch said

Written from the verified transcript and checked against it. Every figure links to the moment it was said.

Charles Koch discussed the origins of his new book, explaining that Koch's principle-based framework has driven success since the early 1960s, but the company experienced deterioration in 2017, prompting a re-articulation of principles. He described failures from leaders not focused on creating customer value and from hiring based on credentials rather than values, citing the Purina acquisition as a costly mistake. Koch highlighted Molex's transformation, noting it now earns more than 10 times what it did when acquired in 2013. He emphasized the importance of comparative advantage, referencing his son Chase firing himself from running Koch Fertilizer. Koch discussed Stand Together, founded in 2003, and his commitment to principles of equal rights and mutual benefit, citing Frederick Douglass as a hero. He stated he will keep working until he no longer contributes, saying he'll 'ride my bicycle till I fall off.'

Key takeaways

  1. Koch's worst failures came from hiring on credentials rather than values, citing the Purina acquisition as a costly mistake.
  2. Molex now earns more than 10 times what it did when Koch acquired it in 2013 after applying principle-based management.
  3. Koch founded Stand Together in 2003 to address social problems through bottom-up solutions and social entrepreneurs.
  4. Koch's principle-based framework has driven success since the early 1960s, but the company experienced deterioration in 2017.

Numbers and commitments

FigureWhat it refers toTypeAt
2013 Year Koch acquired Molex timeline 29:31
10 times Molex earnings increase since acquisition metric 29:31
2003 Year Koch founded Stand Together timeline 51:30
130,000 Number of Koch employees metric 12:48
41 Number of principles in the book metric 12:48

Chapters

  1. 0:00Why write the book
  2. 14:53Failures that shaped principles
  3. 22:54Talent model and hiring
  4. 29:31Molex success story
  5. 36:01Comparative advantage
  6. 44:41AI and principles
  7. 51:28Stand Together and social change
  8. 1:10:41Succession and retirement

Questions asked in this interview

11
  1. 0:15So this book, why write this book?
  2. 9:28What would you hope that they would go take away when they read this book?
  3. 28:39Where have we seen applying these principles change the trajectory of a business or business unit?
  4. 34:22Maybe start with you, Charles. Where do they go wrong?
  5. 53:25Chase I mean what have you seen or experienced?
  6. 53:32What principle like really enables that?
  7. 1:02:18Uh Justin Healey, are you in?
  8. 1:08:28I mean, let me the things that he's doing, right?
  9. 1:10:58Are we looking at the next CEO of of Coke, Inc.?
  10. 1:13:10Now, I mean, if I had those skills and if I was the right person at some given time, then okay, maybe a candidate, the board would decide that, right?
  11. 1:14:43um you know so any any any parting parting words that that you all would have for this audience as uh as they as they leave out?
Host 0:00 ↗
I'm super excited and humbled and privileged to be here and connecting up with you all. So, let's dive into the book. Let's get into it. Charles, you've written a couple books.
Charles Koch 0:12 ↗
Five books. Come on.
Host 0:15 ↗
My bad. I don't want to shortchange him. Five books, including New York Times bestseller. So this book, why write this book?
Charles Koch 0:28 ↗
Well, it goes back to the fact that our principle-based framework has been responsible for KO's success going back to the early 60s. And looking around the room, I think some of you were young back then. Did I get that right? But that sounds like we had it all figured out and it was a hockey stick straight up. No, hardly. It was one set of failures after another, and then figuring out how to recover from them and what principles we need to learn. So it's been a constant learning journey of failure, applying principles, screwing up again, being a victim of entropy. You know what entropy is? It's considered by scientists one of the most important facts of nature, one of the most fundamental. In a closed system, everything deteriorates over time, waste and uselessness. So what we have found is unless we apply energy and knowledge to a problem, we have that deterioration. So that's one of our principles that we have to keep relearning.
So anyway, we've been through that, and then our most recent, I wouldn't say failure but deterioration in our performance was in 2017. And so we got together in leadership and said, 'Okay, what do we do about this? It's obvious our principles and the way we articulate them have gotten stale, and people are taking it rote, so they're not internalizing it and really applying it. So we've got to recharge it.' So the first thing we did, and I'm talking for the book, there were a lot of other things we did personally, but the first thing we did is go back and identify what are all the principles that have made us successful over this period, and then to articulate them, communicate them in a way that people would think about them differently and realize the power of. And then we realized that wasn't enough. We needed to go into or work with each of our business groups and help them tell their story on how they were failing, how they were struggling, and then what principles they found that transformed them to really be successful and contribute over time.
And then as we did that, we found that worked. I was amazed, and our people got recharged, and the whole company greatly improved at that point. So we said, 'Wow, I think we may have the material for an employee manual that we can use.' And so I checked with Stand Together and said, 'This is what we have. Will this be helpful to you?' And they said, 'Oh my god, that'd be terrific for what we're trying to do at Stand Together.' But to really get the value out of this, we need to get Chase involved because he's helping us so much at Stand Together in getting more and more people interested across the whole spectrum of all kinds of different people from all different walks of life, and he can bring technology into the book which will improve the readership. So Chase, you want to maybe give your perspective?
Chase Koch 4:59 ↗
I would just add to what Pop's saying. What a cool experience for me to get invited into this. I'd never written a book before. He said he wrote two, he actually wrote five, he corrected you on that. But this is my first one. So it was a really remarkable opportunity and project for me. But just reacting to some of the things that Pop was saying on why we wrote the book. And just being on the leadership team over the last six or seven years and seeing some of that story play out. One of the key inflection points to put a fine point on that is when Brad Rzook identified the need to change the name. Brad out there? Yeah, these back. So Brad identified that if we, why are we calling it market-based management? We could call it principle-based management. And it seems like a subtle name change, but when you have 130,000 employees and you change what is the articulation of our core competitive advantage and what drives our culture around principles, just to see how people wanted to understand why we changed it and then what did we change and why, what does that mean to me, what does that mean to my business? I don't want to gloss over that point because that was a ripple effect into a lot of transformation just beyond that. So I think for all the business leaders and organizational leaders in the room, you change your value system, you keep that fresh and updated, you're going to keep your whole team and organization like, 'Okay, leadership is actually driving transformation of our own articulation of our value system.' And that's a really big deal for anyone trying to set a culture in any organization.
But the other thing I would say is that Pop mentioned in the kind intro what I focus on for the organization is around origination and partnerships. And I was doing that all the way back in 2017 when I started KO Disruptive Technologies. Now I'm focused more broadly with origination and partnerships across all of KO. But as I was, it's a very market-facing role and I'm in market a lot, and customers, suppliers, potential acquisitions, founders that we would invest in, all of them consistently ask, 'What is so different about KO? How do you do it? Tell me about these principles. What is this principle-based management culture that you have?' And they wanted to learn what enabled KO to grow 9,000x going back to the 60s because they want to do the same.
And so just hearing that and understanding that look, every business goes through the rocky road that Pop talked about. Everyone goes through failures, everyone goes through the upsides and downsides. And if you look at right now, what we're going through, I think everyone would agree that we're in unprecedented uncertainty, whether it's being concerned about how fast AI is moving and what that means to their employees, to their job, to their strategies, what they need to do differently. Divisiveness in our country, economic uncertainty, these are all things that I think every leader, every person worries about. So back to your question of why we wrote the book, I think very simply, what we hope this book is is a framework and a guide to help navigate that unprecedented uncertainty. And what I think we found is that principles give you courage.
Principles give you something that you can say, 'Okay, this is going to guide me. They're consistent. I can apply them to anything and everything.' As opposed to floating with the wind and chasing the next trend that unfortunately you see so many people do in society. So if you have a core framework and a core system that enables you to really navigate this tremendous uncertainty that we're all faced with.
Host 9:28 ↗
Yeah. So I assume as we look at business leaders and organization leaders throughout in this audience, what would you say is a key takeaway after reading this book? What would you hope that they would go take away when they read this book?
Charles Koch 9:49 ↗
Well, I think just what Chase said, that we're in a time of turmoil, hatred, tribalism, and it's very scary. And I think the only way out is to focus on working for a society of equal rights and mutual benefit where everybody has the opportunity to realize their potential by creating value for others and have a life of meaning. And so to me, that means helping our country more fully live up to the promise in the Declaration of Independence. And I always go back to what Chase talked about, courage. What my hero Frederick Douglass said: 'Stand by these principles, be true to them in all occasions and all places against all foes at whatever cost.' And you look what he was up against, the death threats, the brutality he faced, and that's where he came out. It brings tears to my eyes because that's what we all need to do if we want the country to move in the direction he hoped it would. And so that's what I've dedicated my life to as best I can. You can see that's another one of my failures, so you can mark that strike against me as well.
Chase Koch 11:52 ↗
That is tough to follow. But what I would say is to break it down into what each of us can do, because it took me a long time to learn what he was talking about. He tried to pound this into my head since I was 8 years old. I'm a slow learner. My mom has confirmed that as well. And a late bloomer.
Charles Koch 12:17 ↗
He learned but he was sleep through all my lectures.
Chase Koch 12:20 ↗
Yeah.
Charles Koch 12:20 ↗
And he got this by osmosis.
Chase Koch 12:23 ↗
Then one day he woke up and, 'Oh yeah.'
Charles Koch 12:27 ↗
Now I
Chase Koch 12:28 ↗
This is obvious. I figured it out when I started really failing badly on things. Then you internalize principles and what he was trying to teach me for a long time. But back to why we wrote the book and what outcomes we're hoping from this, at the end of the day, we just hope this helps people.
Charles Koch 12:48 ↗
Yeah. And these are the stories of failure and transformation that we've learned within a company of now over 130,000 employees, but also what we're doing in social change with Stand Together outlines the failures there, the things we screwed up, but what we're learning and how we're seeing stories of people that are transforming their lives with these principles. And so we just want to get this out there to as many people as possible so that they can take even a few principles to transform their life. It's daunting when you hear 41 principles, like 'Oh my gosh, this is the way we used to teach market-based management, principle-based management, there's five dimensions, there's 100 mental models, you've got to learn it all.' And I'm still learning and I've been around this since I was a little kid. I learn every day with these principles. But if you just take a couple of these, two or three, and back to what we hope the outcome is, you take one like, 'That is something that if I apply that principle in my business or my organization, my nonprofit, my sports team, it applies to everything.' And if I just take a couple of these, I think everyone in this room, everyone that's going to listen to this will say, 'I actually see an immediate change. This isn't just high-level armchair principles that I want to go back to my day. This stuff can help me today.' So that's what we really hope for.
Host 14:26 ↗
Well, then let's dive in. Let's take a deeper dive into some of these principles. One thing I like about the book is that it's framed through the lens of failures, not just successes. Charles, maybe you could kick us off with what are some of the failures that shaped the 41 principles that you write about.
Charles Koch 14:53 ↗
Yeah. I'll start with back mainly what I saw in the early days. I'll put it in two buckets. The first bucket is we had leaders who weren't focused on creating value for our customers and or pursuing opportunities where we didn't have the capability to create value, sometimes both. So there were some real train wrecks in that. And the second bucket was, and a lot of those were the same leaders, but many would rather than empowering their employees by being a bottom-up leader, they would try to control them. So our employees weren't contribution motivated, didn't practice teamwork, and didn't innovate. So finally, relatively early on, we said we need to take the principles that we use to deal with these different types of failures and package it in one. And I called that creating virtuous cycles of mutual benefit. That starts with striving to only pursue those opportunities for which we have the capability to create superior value for customers, and then to continually improve and add to those capabilities, which then opens new opportunities which in turn call for additional capabilities. So when we do it right, as opposed to the many times we do it wrong, this leads to never-ending cycles of improvement, opportunity, and success, with a lot of failures sprinkled in along the way to keep us back on track.
Host 17:18 ↗
Yeah, for sure. What about you, Chase? What failures or patterns of failures?
Chase Koch 17:22 ↗
Oh my gosh. There's so many that I've been a part of. I could tell a lot of different stories. But one that before I came back to KO, I started at KO when I was 15. I had a lot of different summer jobs. But I remember the late 90s was a really difficult time for KO. In the book we talk about two different periods of time: the early 70s during the energy crisis, that was before I was born, but then in the late 90s, I was in college and just from afar seeing what was going on. In those two periods, there were risks of part of bankruptcy, back to Pop's discussion around the volatility that KO had. It wasn't an up and to the right story. And I remember just from afar hearing the story of what we were doing in agriculture in the late 90s. I learned a lot from it because then I went into the fertilizer business in 2006. The learnings and the stories of the late 90s, the quick story is back to what Pop was saying in terms of wrong leaders in the wrong role with the wrong mindset. I think there was a lot of that, but also one of the principles we have is capabilities. One of the things that has built KO over time, we've learned a lot through failure, is focusing on where you have capability and where you don't. The story of the fertilizer business in the late 90s is basically getting way over our skis and expanding into way too many things where we did not have capability. So we had a strategy called the gas to bread spread.
And basically, I'm triggering him. I'm triggering him a headache. And yeah, I mean, it hit me viscerally and I wasn't even at KO at the time, just seeing what was going on. And hearing from him at the dinner table on this. But basically what the gas to bread spread was is pulling natural gas out of the ground, converting that into nitrogen, then distributing that to farmers, the farmers using nitrogen to grow wheat and corn, then ultimately turn that into food and then package it and put it in grocery stores. Gas to bread, pizza crust even. So we got in that entire value chain and thought we could do a good job on everything. So it seems crazy now, but that's what was going on. There was one example where we bought Purina, most of you didn't know Purina like dog food, and Purina large animal food business without doing much diligence at all on it, only to wake up after we closed the business to be several hundred million dollars underwater because we had out of the money hog contracts that we had just acquired. Wow. So it was bankrupt like day one.
So when you don't, and this is another principle, the scientific method where you go in and you want to do an acquisition or get into a new area, the principle is disprove your hypothesis as much as you prove it or more. So always ask why not and go through that challenge process. And so we violated so many principles just within that story around talent, leadership, capabilities, scientific method. It could go on and on. Later when I was running the fertilizer business, I didn't even though I knew that story, I almost made an identical mistake. So I didn't learn from that lesson. When we were trying to expand internationally, I was running that business and we wanted to distribute all the nitrogen products, phosphate, potash. We were expanding into all these different markets and we wanted to get into all the import markets: Brazil, Mexico, UK, France, Australia, we were in New Zealand. We were in all these small markets and we did all that in about two or three years. So way over our skis, growing for the sake of growth. And it was in a time where it was a boom market where margins were really high and just assume that these margins would go on forever. Stupid stuff. So talk about scars and thinking about the mess that we created. And then thankfully we had leaders that came in and we started applying the principles and we shut down the stuff that didn't make sense and went back to our core capabilities. And you look at what the team has done with the fertilizer business, it's one of our most promising long-term businesses that we have. But we went through two massive failures because we ignored these principles within that.
Host 22:33 ↗
Yeah. Well, I mean, so as I listened, these principles aren't just some abstract thing. These are real. And to your point, if you shirk these type of principles, you'll eventually feel the consequence. It might be good in the short term, but over the long term, you'll end up feeling it.
Chase Koch 22:53 ↗
Yeah.
Host 22:54 ↗
No doubt.
Charles Koch 22:54 ↗
Let me build on that. Could I ski that? We talked about some of the problems and failures. The worst failures have come from violating our principle of hiring first on values, second on talent, and hardly at all on credentials. And then what is really bad, really cost us, is when we made somebody who didn't have good values, let's say was so far from being contribution motivated, they were destructively motivated. That is, they were motivated to get power and control over others, and in the process they would hide their failures and fabricate their successes. And so those were the most expensive things we have. This Purina thing, they knew this problem with the hogs, but they didn't tell us because they wanted to make the deal so badly. So that's what I'm talking about. The worst mistakes we made: 'Oh, these are really talented people, let's leave them in, give them another chance.' And that's when we've had the worst disasters.
Chase Koch 24:38 ↗
And let me give the other side of that coin, because we're telling doom and gloom stories here. There's some really amazing stories of learning from that and then applying it. So just to repeat what my father said because I think it's so important and it's one of the most useful things in the book that all of us can apply: our talent model first on values, second on skills, last on credentials. And again, most companies flip that on its head. Start with a fancy resume, hire the person that has the best network or the best sales figures or whatever. And that's to Pop's point, that's where we've gotten in the most trouble when we focus on that. So hire great raw material, great values. I call it hire the farm team, meaning kids that grew up with strong work ethic, not entitled, that want to come in and make a contribution, and they come in with fire in their belly. It doesn't mean they had to work on the farm like he made me do that when I was 15.
Charles Koch 25:49 ↗
Should have done it earlier.
Chase Koch 25:50 ↗
Yeah, I definitely should have. But let me give you one example of how that's practically applied within KO. I've told this story many times, but I think it's such a good example. Our CIO today, his name's Jared Benson. I don't know if he's in the audience or not today, but you've worked with him, Ski. You know him well. I know him well. He's CIO of KO today. One of the most important leadership positions that we have at the company. He started at KO. His first role, not as KO employee, but being around KO was striping the lines in the parking lot. And he just wanted to get access and figure out how can I get into KO, but he didn't go to college. He didn't have a college degree. He had really no credentials. But he demonstrated his work ethic and his desire to get in and prove himself. And he was really good with technology. And he came in and very quickly started running circles around our team. Someone got him in, got around the resume process and gave him a chance. And then he quickly proved himself and then saw this wave a decade ago on cyber security and how we needed to protect ourselves from cyber attacks. Saw that very early. Built a team, built a capability. He was our CISO, our lead on cyber security. And then from there continued to demonstrate himself to be the head of technology for KO. Amazing. No college degree. So that story, if we can apply that at scale, we will have a huge competitive advantage. And I would encourage everyone that's running a business, if you can think that way and think about hiring on raw material, hiring on grit, hiring on values and principles, you can teach people the skills. A lot of the stuff that comes in the resume is actually counterproductive. What you learn in college, some not Wichita State of course. Let me just be clear by the way. But we hire a lot from Wichita State by the way. But what we found in a lot of some of the things that, and by the way I've talked to the dean a lot about this on whether they're flipping the script in terms of what college education is relative to when you and I went to school, and doing it in a way that you come out of there going, 'Okay, I'm more prepared.'
Yeah. And so over the years we've had to help people unlearn what they learned in business school and take it back to values and principles. And so that's why the Jared Benson story is so powerful as a talent vision and a talent model.
Host 28:39 ↗
Now I can attest because I was going to go there with Wichita State. We were just here with our son on a visit to Wichita State last week and I was sitting there thinking, my wife and I were thinking, they're doing a lot of applied learning here at Wichita State across it doesn't matter what department or discipline. So shout out to Wichita State. I saw it firsthand last week. All right. So let's maybe continue this thread around successes. So a lot of the book is framed around some failures and the principles that were learned through failure, but almost everybody in this room thinks of KO as a great success story. So maybe we can start with you, Charles, on success stories. Where have we seen applying these principles change the trajectory of a business or business unit?
Charles Koch 29:31 ↗
Well, I would say most of our businesses have gone through, but we don't have time to go through all the stories that are in the book. But I'll just pick one because it's so remarkable, and that's Molex, which makes electronic connectors of various kinds. We acquired them in 2013. And they had what I'd call a paternalistic paradigm. What I mean by that is if somebody was in a position, the wrong position or maybe shouldn't even be with the company, they wouldn't change that. If they were making products for a customer, they were afraid to discontinue those that were losing money. If they had plants that were unprofitable, they wouldn't close them or modify them because they didn't want to rock the boat. So we fooled around with word smithing. There was a lot of word smithing. 'Oh, yeah, we're doing all this, we're applying the principles,' and they weren't. So we changed the leadership, and the new leadership, which were Molex longtime Molex employees, dug in and now they are among our leaders in applying principle-based management. One of those was a principle we haven't talked about which is so important: marginal analysis. They call it de-averaging, a rose by any name. I don't give a damn what they call it, apply it, they get results. So what are we doing that's profitable and what is not? Not just products, plants, but every activity. And then they said, 'Okay, we don't have the right people in the right role.' So they totally reorganized and applied the division of labor by comparative advantage. And then they started applying creative destruction and principled entrepreneurship. And now they're growing like a hurricane. They are now earning more than 10 times what they did when we acquired.
Host 32:10 ↗
Wow. Yeah. Really?
Charles Koch 32:12 ↗
Yeah.
Chase Koch 32:12 ↗
So it just blows me away. I'll just add because with KO Disruptive Technologies over the last years I've gotten to work closely with Molex and I still work with them on partnerships and origination. Seeing, I think one key point in what Pop's saying here is that had we not made the changes he talked about both at the leadership level, the cultural level, change paradigms, that's one thing he did not say, that's a very key principle in the book. When we acquired them, they were topline thinking, grow revenue. Well, if you're growing revenue but your costs are still high and that's not falling to the bottom line and you're not creating bottom line value, the revenue is not the thing you should solely be focused on. So thinking about real long-term value creation took quite a bit of time to change that paradigm and it took leadership change to do that. But if you fast forward to today and think about Molex as one of the most exciting, fastest growing businesses at KO, had we not made those changes and all this AI boom has been huge for the business, we have a data solutions business where because of the expansion of data centers, you need more connectors, more cables at scale. So that business is growing the last couple years it's grown like 20x. So think about a large business growing at that speed and to have the ability, the talent models to go hire, they're in the process of hiring 10 to 15,000 more people over the next 8 to 12 months. That's hard to get your head around to keep up with this growth. But the point I want to make is that had we not made those changes, all this growth for AI and all that, it wouldn't have mattered. We would not have been able to capture it had we not driven those transformations the last two, three, four years.
So I think that's, for everyone that runs a business, you have that opportunity and the market's there or whatever, but if you're not set up to capture it, that opportunity will be gone.
Host 34:22 ↗
Yeah. So as I hear that, I'm sitting here in amazement. But if applying these principles gets those type of results, then why do leaders go wrong in applying any mix of these principles? Maybe start with you, Charles. Where do they go wrong?
Charles Koch 34:44 ↗
Well, that's what I said. It starts with somebody having the right values. If somebody doesn't have the values, if they don't want to succeed by, I'll put it this way, the way to succeed in our view is to help people find their gifts and their passions and show them how to succeed by helping others succeed and have a life of meaning. And this another one of my heroes, Victor Frankl, who survived four Nazi death camps by applying these principles that if you have meaning in your life, you can do anything. And there's a great book called Man's Search for Meaning. If you haven't read it, you need it, it's so inspiring. So it's similar to Frederick Douglass's story, but much later.
Chase Koch 36:01 ↗
Where I've seen it, Ski, is that only through my own failure on this, as a leader is not really understanding and applying the principle of comparative advantage. I would say we all have our top three or four principles that have meant the most to us, but that one for me is number one because I lived it and I failed in it. I misapplied it. Back to the fertilizer story, in 2014 I had the awesome opportunity to be president of KO Fertilizer only to realize nine months in that that really wasn't my comparative advantage to run and operate a large business. My heart and my skills were in building, not operating. And so I viscerally learned through, imagine being the boss's son and running the third largest business at KO only to go fire yourself from the role and walk down the halls of KO with all leadership and everyone knowing that happened. 'Well, the boss's son failed. He failed at that job.' But thank God that I did because it set me on a whole new path of origination and building new things, getting us into new technology, building KO Disruptive Technologies, and now doing what I'm doing now for the company that I'm much more skilled in. If I would have stayed in that role because I was Charles KO's son, there's no way the fertilizer business would be where it is today. And we got great people to come in and help clean up some of my messes, and now it's one of the most exciting businesses. So I go back to, I want to make this practical for everyone in the audience. Imagine if you had a business where everyone's role, and by the way your role as leader was optimized around your true gift and your gift relative to everyone else on the team, and you stop doing the things you're not good at relative to everyone else and you focus on the thing that is your power alley and you can just crush it. Then customize roles based on the team that you have. At KO scale, 130,000 employees, this would be a dream if you really had supervisors understanding how to apply comparative advantage and help people overcome the ego problems of title and how many people are reporting to me and all the BS that doesn't matter, and really think about where can I create the most value to play the best role and biggest role to advance this vision. If you can do that, you will win.
Host 39:09 ↗
Yeah.
Charles Koch 39:09 ↗
And um because so many other companies are worried about well you know John's been here for 25 years so he needs to stay president or whatever all this stuff that it doesn't matter. So I think comparative advantage is something that I'd recommend the audience is like really internalize think about that for yourself truly what is my comparative advantage but then it's like how do I help my team think about what theirs is?
Host 39:35 ↗
Yeah.
Charles Koch 39:35 ↗
And if you do that wow I mean that's that that's a big comparison. And this is this is so important. What Chase said is is that is that okay, you fired yourself because it didn't fit your comparative advantage and you you turn it over to somebody who's comparative and and now the fertilizer business is has taken off fantastically just like Molex. And then and that goes back to what to to to have this all work. It needs to be in the culture.
When you when you turn yourself in and don't uh pursue the shiny object and I want more people reporting or whatever, then you're you're contributing more. And if you want to succeed at Coke, you better do that because if you try to hang on to things you're not good at, you're going to fail and and and cause the company to fail. And and Dave Robertson did this. I talked to 2017 when he had that he had we had grown tremendously and he had he had 415 companies reporting to him. I'm a little hyperbole here, Dave, but it felt like it, right? And so, so Dave says, 'Well, we got to reorganize.' And I said, 'Well, okay, push some of these. No, no, we got to fundamentally reorganize so promoted people. And then we've done that again as we've grown to continually reoptimize because and and and uh uh and the visual by comparative advantage is is is not that simple to get because it's a compound meaning what it when you're when you're really applying your comparative advantage. It's when you're in a role uh where you can create the most value for the team and the company given what everybody else to can do. Or another way to put it, you're focused on what you can do better than anything else you can do and better than everybody else to do can do. And when everybody's focused on that, I mean, you go gang busters.
Host 42:09 ↗
Yeah.
Chase Koch 42:09 ↗
Yeah. And I think one just one more point on this, it's the show versus tell. So what he was talking about with with Dave and the leader the transformation and the restructure of the leadership team when you lead as a leader by just doing that making the changes you need to make at the top it gives everyone else in the organization permission to do it too.
Host 42:34 ↗
There we go.
Chase Koch 42:34 ↗
So like a lot of the things like Molex and fertilizer GP FHR they saw that there's all there's examples across all those businesses we're like well maybe we should restructure Are we applying comparative? So
Host 42:48 ↗
That don't underestimate whether it's a you have a business of 10 people, a hundred, 10,000, it doesn't matter,
Chase Koch 42:55 ↗
Right? If you do that, you show you show versus tell like that it it it gets into the culture. Yeah.
Host 43:03 ↗
That's that's how you drive transformation.
So So as I listen two things that stood out to me there, right, to your point, Chase, on modeling, like it's important for a leader to model, right? whether whether it's in business in in you know uh in the social sector you got to model the type of culture and I think you may
And then my my the winningest NCAA coach of all time was Jack Clark the coach of Cal Rugby and it's hard to believe my body shape is but I played rugby so I I got to know him and I said how did you do it you you won 30 national championships no one else has ever done that he said because I didn't give a damn about how talented they were or so on, but I taught we're you're going to only play if you're a leader. And what is a leader? A leader is someone who makes those around him better. Now, let that sink in. If you're not, I don't care whether you're the boss or if you're not making those around you better, you're not a leader.
Chase Koch 44:13 ↗
You're a destroyer. You're undermining the ability to everybody else to contribute the maximum.
Host 44:23 ↗
Yeah. No, great, great, great point. And to learn more about comparative advantage, it's in the book. One of the principles in the book. Um, so, so, so let me shift gears just a little bit and bring this to more kind of present day and and I'm thinking about AI.
Charles Koch 44:41 ↗
Don't be looking at me.
Host 44:43 ↗
You know what? I did I did look over but I mean you know quite a bit about AI. These are experts. But I mean, but but I'm thinking about like the application of these principles cuz somebody might look through this list and think like, oh, well, these are old time principles. They don't apply in this, you know, everchanging world driven by AI. So, uh, so Chase, I mean, what are your thoughts about these principles applying in this?
Chase Koch 45:07 ↗
No, I mean, it's a great question and, um, I think it goes back to kind of how where we started in terms of why we think these principles are so like valuable now. No, no one's seen anything move as fast the technology move as fast as AI and it's really scary for for everyone. Um but we feel like the principles are the answer to like deal with the change. So what does that mean? So take two principles. Um creative destruction, one that we haven't talked about yet. It's this idea of dis disrupting yourself from within before the market does. Right? Um that's one principle. The other one is having a learning mindset. I think both of these are hugely valuable in this pace of change with technology that we're we're dealing with right now. So if you have the mindset of creative destruction and you're you're open to it and like looking at technology as as an enabler, an enhancer as opposed to how do I protect myself from it? Um I think that's the starting point, right? Is just like having an open mind. It's like how can I transform my how do I drive creative destruction and maybe this has worked for me in the past but AI is about to disrupt that and I don't need that process anymore right so if you think about accounting processes or um legal analysis how you look at at doc you know AI looking at documents we're doing it so differently than the way we were doing it two years ago right and so that's creative destruction thinking about your systems processes, products, structure, all of that and saying I need to like continue to innovate every day. If I had a clean sheet of paper, how would I do it given what I know today and the technology that is available to me? So I think I think mindset around it is very important. Um and then also this like lifelong learning mindset and if you if you think about not as I think so many people the debate around um well uh AI is going to take all our jobs. I'm competing with AI for the job. Now, instead, flip that and say, um, I'm competing with a person that knows how to play apply AI better than me. And so, if you think about like I better figure out what my gift is, what my comparative advantage is, and how I can use these tools that are out there to to basically win and out compete someone else.
Host 47:38 ↗
Yeah.
Chase Koch 47:40 ↗
And so I think again both of those are like principles that help you uh with mindset. But um I give my son uh Charlie who's here um a lot of credit cuz he's teaching me about this. You know, I mean I'm stuck in old Excel spreadsheets because that's what I grew up in the last 20 years. I'm pretty proficient in Microsoft Excel. But he grabs my spreadsheets and says, "Let me put that in Claude for you." Like I had a u I've got this whole exercise treatment that I do and I had it all in spreadsheets and the reps and all the things I need to do and um he grabs it, puts it in Claude and builds an app that is that gives me goal driven weekly measures and a whole analysis of what I'm doing poorly or what I'm what I'm doing well.
Host 48:22 ↗
Yeah.
Chase Koch 48:22 ↗
And tells me how get up off your ass and do your exercises, you know. But Charlie built that in a couple hours.
Host 48:30 ↗
Wow.

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APA

Koch, C. (2026, July 9). Becoming a Principle-Driven Leader | Charles Koch & Chase Koch with Askia Ahmad — Wichita, KS [Interview transcript]. Becoming a Principle-Driven Leader. CEOInterviews.AI. https://ceointerviews.ai/interview/1093724/

MLA

Charles Koch. "Becoming a Principle-Driven Leader | Charles Koch & Chase Koch with Askia Ahmad — Wichita, KS." Becoming a Principle-Driven Leader, 9 Jul. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/1093724/.

BibTeX
@misc{koch2026_1093724,
  author       = {Charles Koch},
  title        = {Becoming a Principle-Driven Leader | Charles Koch \& Chase Koch with Askia Ahmad — Wichita, KS},
  howpublished = {Interview transcript, Becoming a Principle-Driven Leader. CEOInterviews.AI},
  year         = {2026},
  month        = {jul},
  url          = {https://ceointerviews.ai/interview/1093724/},
  note         = {Speaker-attributed transcript with timestamps}
}