Charles Koch Talks Environment, Politics, Business and More

What does one of the world’s most influential entrepreneurs really think about the current state of politics, the economy, the future of business, and the environment?

Charles Koch, chairman and CEO of Koch Industries, sat down with best-selling author and entrepreneur Tim Ferriss, host of The Tim Ferriss Show podcast, to discuss these issues and more, including some of his most significant learnings in life and business.

“I mean, it blows me away constantly, the power of these ideas. They’ll say, ‘Oh, well, you're so smart.’ I am not,” Koch told Ferriss. “Believe me, everywhere I’ve ever worked ... there are a lot of people who are smarter than I am. It’s just that I was dedicated to understanding and living by these principles and that’s what's made the difference in life. That transformed my life.”

Listen to their full conversation here.

CHARLES KOCH: ENVIRONMENTAL POLICIES SHOULD WORK, MAKE PEOPLE’S LIVES BETTER

When it comes to the environment and concerns over impact, Charles Koch says meaningful solutions start with innovation.

During his conversation on The Tim Ferriss Show podcast, Koch responded to several listener questions voicing environmental concerns and how to address these issues.

"What we want them to do is to find policies that will actually work, actually do something about reducing CO2 emissions, manmade CO2 emissions, and at the same time not make people’s lives worse."

Charles Koch

What’s needed, Koch explains, are innovations that will scale across economies and nations that will help them reduce emissions in a way that is beneficial for all.

COLLABORATING ACROSS SOCIETY TO IMPROVE LIFE FOR ALL

There is great power when individuals and groups across society come together and share their expertise in order to solve problems such as addiction, poverty, and criminal justice, Charles Koch told Tim Ferriss.

Citing firsthand experience, Koch said it is essential to support those who will help advance ideas that will enable individuals realize their potential. With Stand Together, a network of organizations dedicated to helping advance those ideas, Koch said, the approach starts from the ground up.

"It starts with the recognition that everybody has the capability to realize their potential if they have the right mindset and support."

Charles Koch

CHARLES KOCH THINKS PEOPLE SHOULD BE PAYING MORE ATTENTION TO THESE ISSUES

For Charles Koch, free trade and immigration are essential for peace and prosperity — and policies should encourage more, not less, international cooperation.

"If goods don’t cross borders, soldiers will, he said, remarking of the quote often attributed to economist Frédéric Bastiat."

Charles Koch

Factor in the threat of nuclear weapons, he added, and the incentive is even greater to reduce conflict around the world.

WHY CHARLES KOCH BELIEVES THE BEST IDEAS START FROM THE GROUND UP

Businesses should only profit to the extent that they are improving people’s lives, Charles Koch said on The Tim Ferriss Show podcast.

Koch said that businesses should not profit from harming the environment and hurting people but rather from creating greater value for society. Pointing to the EPA’s ranking of Koch as one of the top two U.S. companies in pollution reduction initiatives, Koch ascribed that success to an individual-driven approach.

"If you're bottom up and you're looking at individuals and how to improve their lives, it changes your approach rather than some top-down statistical approach or control."

Charles Koch

To hear Koch talk more about “ground-up” successes and the peril of “top-down” control, listen now.

WHAT WOULD CHARLES KOCH BE WILLING TO RISK HIS PERSONAL FORTUNE FOR?

That was the big question one listener of Tim Ferriss’ podcast had for the Koch Industries chairman and CEO.

Koch had a simple answer: He’s already doing it with Stand Together, a network of groups across society dedicated to lifting people up and solving problems.

"Economists have a concept called ‘demonstrated preference’ that pays attention not to what people say, but what they do. And the progress we're making [at Stand Together] is one of the reasons I get up in the morning charged up every day."

Charles Koch

WHAT SETS KOCH APART FROM OTHER LARGE COMPANIES?

Koch Industries’ Market-Based Management® approach is based on what has enabled scientific and social progress throughout history, Charles Koch told Tim Ferriss in his podcast interview when asked how the company differed from companies of similar size.

With 130,000 employees worldwide, including 67,000 in the United States, comprising more than a dozen business groups, the difference comes through encouraging virtuous cycles of mutual benefit — win-win outcomes.

Simply being the best in the world at what you do isn’t good enough, Koch said. It’s about driving personal and organizational transformation — evaluating new and emerging opportunities.

"If we had just stayed with the crude oil gathering and making tower internals, we'd be out of business now. It's by applying the principles of human flourishing and creating beneficial cycles focused on how do I create value for all my constituencies, particularly those who will reward us for the value we create for them, that has enabled us to do what we've done."

Charles Koch

FOR CHARLES KOCH, THIS IS ONE OF BUSINESS’ BIGGEST PROBLEMS

Subsidies, tax incentives, and trade restrictions are all symptoms of a protectionist system that distort the role of business in society, Charles Koch said on The Tim Ferriss Show podcast.

"If business and individuals are getting wealthy, the only way society's going to permit that long-term is if they're contributing to helping people improve their lives, not making it worse. All the short-term [thinking] that's going on, we think is hurting people and undermining businesses' role in society."

Charles Koch

While acknowledging that the company does accept subsidies and other incentives where it would otherwise put it at a competitive disadvantage, Koch said the company would continue to oppose all that undermine the proper role of business in society. Recent examples include the border adjustment tax and steel tariffs.

Following up, Ferriss asked Koch which market distortions he wanted to end.

“All of them,” he replied.

What is the proper role of business in society? Listen to the full answer now.

BETTER KNOWLEDGE SHARING, BETTER BUSINESSES

Too often, companies operate in silos that restrict the flow of knowledge across the organization.

“We consider that the kiss of death,” Charles Koch told Tim Ferriss during the podcast interview. “We expect everybody to share, and we build mechanisms and incentives in the company to encourage this internal knowledge sharing.”

Through that sharing, Koch says, the company has built a republic of science in which employees can rely on one another to solve problems and develop new ideas and products.

"It’s what Newton said, 'If I see further, it's because I'm standing on the shoulders of giants.' But they don't need to be giants. Anybody who's working on a similar problem may have an idea that can help you. Collectively, we're all smarter than any of us are individually."

Charles Koch

WHAT IS CHARLES KOCH’S ADVICE FOR SUCCESSFUL ENTREPRENEURSHIP?

Charles Koch believes that self-actualization, or the realization and fulfillment of one’s talents and potentialities, is what drives the success (or failure) of a business. Koch discussed the importance of recognizing and unleashing that potential to create a better life and better business that benefits others on The Tim Ferriss Show podcast.

"What you can be, you're becoming. Not that any of us are ever perfect in that because it's a continual learning experience, which requires ongoing effort. That's what we try to apply here at Koch Industries, and that's what we're applying in our philanthropic efforts, to enable everybody to have the opportunity to realize their potential."

Charles Koch

Hear more about Charles Koch’s personal journey — successes, failures, and everything in between — during his conversation with Tim Ferriss in its entirety on The Tim Ferriss Show podcast here.