“I thought, My God, I go back, he won’t let me do anything, and he’ll smother me,” Charles Koch recalled decades later in an interview with the Wichita Eagle.
When Fred Koch was unable to persuade his son to return home, he resorted to guilt. He told his son that unless Charles returned to run the firm, Fred would sell it. The patriarch knew that his health wouldn’t last forever, and if Charles didn’t want the company, then someone else would.
Out of a sense of guilt, or obligation, or simple duty, Charles Koch finally relented. In 1961, he came back home to join his father’s company. Over the years, Fred Koch gave Charles increasing authority. Charles had originally been hired within the Koch Engineering division, and eventually Fred Koch gave up his job as president of that division and handed over the title to Charles. In 1966, Fred Koch did the same thing with the much larger division of Rock Island Oil and Refining Co., which was the main pillar of the family’s fortune, making Charles president. But Fred kept his authority over Charles by remaining chairman of the board.
On Monday, November 20, 1967, Charles Koch attended his father’s funeral. The services were held at the Downing East Mortuary, and Fred’s remains were cremated. When prominent members of the Wichita business community dropped by to pay their respects, they tried to console the large family that Fred Koch had left behind. Most prominent in the crowd, of course, was Fred Koch’s elegant widow, Mary Koch, a poised and beautiful woman who was known throughout Wichita as an energetic supporter of the arts.
And then there were the couple’s children, the four boys. As they stood shoulder to shoulder, the Koch boys were an impressive sight. They were very tall, all of them, standing well above six feet. The Koch boys lived their lives looking downward during most conversations. And they were handsome on top of it, with slender, muscular frames and square jaws inherited from their father. It might have seemed natural that Frederick Koch, the firstborn, would be heir apparent to his father’s company. But Frederick, or Freddie, as everybody knew him, never had a strong interest in the family business—or any commercial business, for that matter. He was interested in art, and he studied drama in college rather than engineering. Freddie drew himself away from the orbit of the family company very early on in his life. When Fred Koch died, Freddie was teaching acting classes and producing plays in New York City.
After Freddie came Charles, who adopted the role of surrogate firstborn.
Then there were the youngest Koch boys, a set of fraternal twins named David and William. Both twins, like their dad and Charles, attended MIT. When their father died, David had graduated and was working as a chemical engineer in New York. He was not just tall, but also possessed the muscular physique of a star athlete. He’d played basketball at MIT and was captain of the team. During his tenure on the team, Koch averaged twenty-one points and twelve rebounds per game, allowing him to graduate as the school’s top-scoring player. He set the record for most points scored during a single game, at forty-one, a record that wouldn’t be broken for forty-six years. His twin, Bill, was also on the team, but he didn’t have David’s talents. Bill, who was slightly shorter, spent more time on the bench. When their father died, Bill was still studying at MIT, working on his PhD.
Charles was the only son working at his father’s company at that time. As he stood there, at Fred Koch’s funeral, he was standing alone in a very significant way. Their father’s business empire—everything that Fred Koch had built during his life—all of it was suddenly left to Charles to manage. He was thirty-two years old.
* * *
It’s a truism of family business. The second generation of a successful family company is destined to ruin everything. Charles Koch was painfully aware of this stigma and wanted to prove that he was a builder. When he was left alone to run the company, he arrived early every day at the office, stayed late, and worked over the weekends. It was not uncommon for Koch to call employees on a Sunday afternoon, asking them to come down to the office for a meeting.
And he didn’t just work hard. He worked with an intense purpose. Even in early 1968, just a few months after his father died, it was clear that Charles Koch had a stunningly ambitious vision for the company he and his brothers just inherited. He also had a strategy for how to get there. He wasted no time in carrying out a plan of his own, a plan that would fundamentally reshape everything that Fred Koch had built during his lifetime.
The first pillar of the plan to fall into place was organizational. Almost immediately, Charles Koch set about restructuring the interlocking group of companies that Fred Koch had left behind. The confusing amalgam of corporate entities—the engineering company, the oil gathering business, the pipelines, the ranches—would soon be welded into a single entity.
The second pillar of Charles Koch’s plan was physical: the company would be based in a new office complex. Before Fred Koch died, the company had offices in a downtown building that was named after him. But by a stroke of coincidence, that building was scheduled to be demolished just when Fred died, torn down in order to make way for an urban renewal project. In its place, Charles Koch oversaw the construction of new headquarters, this one on the far-northeast corner of town. The new complex included an office building and a midsize factory floor where the company would make oil refinery equipment and other products. This is where Charles Koch would start to build a new company. Over the next forty years, the office complex would expand. Parking lots would be made where the prairie grass stood in 1967, a corporate tower would be added alongside the low-slung office complex just north of the factory. The complex, located on a remote stretch of Thirty-Seventh Street, was the blank slate on which Charles Koch would draw his plans and execute his vision.
The third pillar was personal. Charles Koch surrounded himself with the smartest people in the company that his father left behind, and the people that Charles Koch could trust. The most important of these people was a man named Sterling Varner.
Varner was a tall man, like Fred Koch, and, also like Fred Koch, he had the giant personality to match his imposing physical presence. When Varner walked through the hallways of the new Koch offices, he was known to stop and talk with employees of every rank. He was a backslapper and a shoulder squeezer. He remembered everyone’s name and always took a moment to ask how he or she was doing. He was the kind of boss who made an employee feel important, no matter their rank. “Some people get sought out—you just want to be with them and be around them. And that’s just the way Sterling was,” recalled Roger Williams, who worked alongside Varner at Koch for many years.
Varner was born into a poor family, and famously told stories of life growing up in the Texas and Oklahoma oil patches, working as a roughneck on the drilling rigs and sleeping in tents. A Koch employee named Doyle Barnett recalled one moment when Varner was driving through rural Oklahoma and saw a vagrant by the side of the road. Varner declared, “But for the grace of God, there goes I.”
Charles Koch relied on Sterling Varner from the very beginning of his time at the head of the company, and not just for counsel. Varner provided a measure of warmth and personal charisma that Charles Koch simply lacked. Charles Koch was not imperious—he didn’t demean the people who worked for him. But he didn’t have the common touch. Charles Koch was quiet, almost awkward. But he seemed to recognize this shortcoming, and he kept Varner close.