Dave: What an honor to be here. Thank you for hosting us, Forbes. And welcome. This will be put out as the all-in interview. So, I'm really excited to share this conversation with everyone on the world on the internet and to get some time with Charles Ko, Chase Ko. Chase and I have known each other since 2013. When we overlapped in the agriculture industry, got to know each other. We've been business partners. And Charles and I have gotten to know each other a few times over the years. But I'm really excited for this conversation tonight. So, Charles, thank you for being here.

Charles Koch: Thanks for having us.

Dave: In Silicon Valley, entrepreneurs and even mature company CEOs always like to learn about the story of other businesses and the success of those businesses. And I've always felt like Coke Industries was that untold story. Uh probably the most profitable private family-owned business in the world. And just for some statistics, if CO were publicly traded, the revenue would put it easily in the top 25 of the Fortune 500. It's a family-owned business based out of Witchah. Founded in 1940 by Fred Ko with businesses ranging from energy, agriculture, chemicals, building products, consumer products, even cloud computing and a very active minority investment portfolio with 120,000 plus employees across 60 countries. So Charles if you could give us a sense of the scale of the business, what are the business lines that you operate today?

Charles Koch: I can go back through some of the history and the failures and successes, but uh I I'll go through what we've grown since the early 1960s. And then we had uh 300 employees. Now we have more than 130,000 in 60 countries and uh we have uh increased in value 9,000 times over that period.

Dave: When did you join the business?

Charles Koch: In 1961 full-time. Well, my father uh we lived on a farm and and he told me at age six he didn't want me to be a country club bum. So made me work in all my spare time which I hated and and so I was always in trouble and and so he was kind of tough on me rightfully so. Years later I I asked him, "Pop, why were you so much tougher on me than you were on my younger brothers?" And he said, "Son, you plumb me out."

Dave: When you came into the business. What was the scope of the business? What was the business operating?

Charles Koch: We we had two main businesses. One was uh to uh uh design and make uh fractionating trays. And then the our largest business was a crude oil gathering system in in Oklahoma. And so my father uh and I had finished just a few years earlier finished MIT and I was uh working for Arthur D. Little then a leading consulting firm and and I was at age 25 doing management consulting. So my father called me and he said son uh I want you to come back and join the business and as tough as he had been on me I declined. So he called me a few weeks later and he said, "Son, either you come back to run the company or I'm going to have to sell it because my health is bad and the companies aren't doing well and uh and I don't have long to live." Uh so I agreed because the first one is uh I got three degrees at MIT and engineering and I sucked as an engineer. So, I figured out pretty quickly that I wasn't going to make it as an engineer. So I need to be an entrepreneur and uh and because I was good at principles and that's why we led. So I was always looking for principles that would help me uh contribute and and succeed and and and that's what uh that's what transformed our our company.

Charles Koch: The first one was uh making fractionating trays. Uh we had a president then who was top down and obsessed with controlling everybody. So they were frustrated. And so I changed the the management and changed the philosophy. Okay, the first thing we're going to focus on is creating value for our customers. And then the second thing we're going to empower our employees so they want to to to do this. And we started growing.

Charles Koch: Well, it was life or death. And my father said, "You can run this business any way you want. The only thing you need my approval on is to sell." That's how he talked me into coming back.

Charles Koch: I was learning all these different principles and what I saw we were doing is we were building capabilities that is I looked at it we need to be capability bounded not industry bounded. Everybody was saying you need to be an integrated oil company. You need to be in everything. And I was applying divisional labor by comparative advantage. No, you need to be in the part of the value chain where you can create more value than others. Otherwise, you're going to fail. And so I started this created this principle called uh uh uh creating virtuous cycles of mutual benefit. If you're not failing at everything, you're not doing anything new.

Dave: What was the first major failure that you know? What was the first punch in the face?

Charles Koch: Like I said, okay, we're when we got into refining, we created petroleum coke. So I said, well, let's come up with a a way to to use that as base to make activated carbon. And that was a fair we spent a fair amount of money on that.

Charles Koch: 当我们意识到自己没有能力为客户创造超额价值，且无法获得相应的回报时，就是离场的时候。这就是为什么我们要从失败中学习。我们现在的业务非常多元化，包括工程项目、太阳能工厂、大宗商品贸易、肥料、精炼产品、化工、玻璃、消费品、四家投资公司、电子产品和管理软件系统。

蔡斯·科克: 我想深入说明一点。很多人问，科氏到底是什么？这种基于能力而非行业的思路是核心区别。如何从俄克拉荷马州的小型原油公司发展到这么多领域？我们鼓励所有管理者从这个角度思考：我已经证明了哪些能为客户创造价值的能力？然后将这些能力指向新行业进行实验。我们另一个原则是实验性探索（experimental discovery），不是试图征服世界，而是不断测试：客户是否认可我的产品？我们的核心能力从运营、物流、贸易开始，后来扩展到天然气、化工、肥料。当我们收购佐治亚太平洋（Georgia-Pacific）时，虽然看起来是木制品业务，但它背后的核心能力是一致的，后来我们也因此习得了品牌运营的新能力。

价值观优先于才华

查尔斯·科克: 我们最严重的失败往往是因为违反了这一原则：招聘时，价值观第一，才华第二。多年来我一直告诉员工：如果你非要招一个价值观有问题的人，那就招个又慢又笨的，这样我们能很快抓住他并让他滚蛋。如果招了价值观极差的人并让他们成为领导者，后果不堪设想。我们希望员工都是贡献驱动型（contribution motivated），通过创造价值来获得回报。但有些价值观有问题的人是破坏驱动型的，他们渴望的是权力和控制，会掩盖失败并伪造成功。

蔡斯·科克: 90 年代后期我们的农业业务有一个战略叫“从天然气到面包”（gas to bread spread）。我们想掌控从天然气开采、转化为肥料、种植作物到最终摆上货架变成面包的每一个环节。这完全违背了原则。我们甚至收购了一个做生猪饲料的业务，却没做任何尽职调查。收购几天后才发现我们背负了数亿美元的亏损合同。这对渴望扩张的创始人是一个警示：不计代价的增长心态会让你陷入大麻烦。

文化的底层逻辑

戴夫: 你如何驱动这种代表原则的文化？

查尔斯·科克: 最初我们尝试过大规模培训（sheep dipping），把所有人叫来开研讨会。但根据迈克尔·波兰尼（Michael Polanyi）的《个人知识》，你需要重构大脑才能形成新习惯。就像健身一样，你需要长期高强度的训练。所以我们决定先找那些面临困难、真正感兴趣的团队，对他们进行辅导。当他们取得成功，其他业务部门就会产生社会模仿（social mimicry），主动要求学习。

蔡斯·科克: 文化的本质是：能否让组织里的每一个人在没有被明确告知的情况下，都知道该做什么？大多数公司是自上而下的，有一个标志性的聪明领袖制定策略。我们要把它反转过来，实现基于原则的底层授权，利用每个人的集体智慧。

保持私人持有的优势

戴夫: 如果你不打算上市，如何在规模化的组织里让中层管理人员敢于冒险？他们通常倾向于最稳妥的路径以保住奖金。