The only thing standing in Chase Koch’s way was the fact that he was miserable.
* * *
Being Koch Fertilizer’s president wasn’t what most people might think it would be. The job was an exhausting, never-ending cycle of meetings. Chase Koch often arrived at Koch headquarters around five or five thirty in the morning, well before dawn, and was at his desk at an hour when many fathers had breakfast with their kids. Chase got there early to prepare for the meetings, which started around six thirty and proceeded—“wall to wall”—until six or seven at night. The meetings didn’t leave time for Chase to develop much of a strategic vision for Koch Fertilizer. He was too busy on the treadmill of supervising a sprawling, complex, and dangerous industrial system.
Chase wasn’t willing to let details slide. He knew that small oversights could cascade into a catastrophe. He didn’t let decision-making slip into other people’s hands. And this turned out to be a strategic mistake.
“I let it overwhelm me,” he said. He began taking his misery and stress home with him. His family life suffered.
Chase paid a visit to David Robertson, a longtime Koch executive who became president of the company in 2005. Robertson was a taciturn executive who spoke forcefully with carefully chosen words. He was a strict adherent of Market-Based Management. He was also seen as a potential future CEO of Koch Industries. If he got the job, Robertson would be the first CEO without the last name Koch. This made him a competitor, in some people’s eyes, to Chase Koch. No one knew which way the future might break.
If Chase Koch and David Robertson were both vying for the CEO position, they didn’t act like adversaries. Chase turned to Robertson for help when he needed it the most, and Robertson offered him wise advice.
“I walked into Dave’s office. I was like, ‘I need help. I’m really struggling in this,’ ” Chase recalled.
Robertson asked Chase to walk him through a typical day. Chase talked about the meetings, the bottomless needs of the organization. The strain it was taking on him. Robertson told Chase that he had fallen prey to a classic mistake of leadership. He was carrying too much on his shoulders.
Robertson said, “You control your calendar. You’re the only one that can say ‘No’ to things. . . . Take accountability for your own role and actually work on things where you can add value,” Chase recalled.
Chase tried to learn how to delegate. He made sure he had the right people working for him and trusted them to do their jobs. But still, it didn’t feel right. Chase realized he was much happier before he’d been promoted, when he ran Koch Agronomic Services. He loved the innovation of the job, meeting with investors and inventors. Chase recalled a piece of advice that David Robertson had given him. Robertson said the most important thing a leader can do is develop a vision. Now Chase had a clear vision. It just wasn’t the vision that everyone else in Wichita seemed to have for him.
Chase Koch called a meeting with Steve Packebush and told him the news.
“Steve, I’m not the right guy for this role,” Chase said. He wanted to quit.
Packebush tried to talk Chase out of it. “He said, ‘Just give it some time. This takes time to really learn the stuff,’ ” Chase recalled.
Chase wouldn’t bend. He wanted Packebush to spin Koch Agronomic Services into an independent company, and Chase wanted to run it. The job was less prestigious, and it would look like a step backward, if not a permanent step away from the path to becoming CEO. But this is exactly what Chase Koch insisted that he do.
“I was like, ‘I need to be over here. This is where my passion is,’ ” Chase said.
In late 2015, Chase Koch demoted himself. He stepped away from the straight, upward path to succeed his father. His reasoning was simple: “Life’s too short.”
When asked, years later, about his most important strategic decision as head of Koch Fertilizer, Chase Koch thought for a while. Then he mentioned his decision to quit.
“That was a big strategic decision, I think, for the overall business and for me personally,” he said. The education of Chase Koch taught him that it was more important to follow his own path, regardless of the expectations of others. It does not appear that he ever regretted it.
* * *
Chase Koch’s decision disrupted what appeared to Koch employees as a clearly laid plan of succession. When Chase stepped aside, an unspoken competition began among senior Koch executives to become the first CEO after Charles Koch left the company. This wasn’t the only source of uncertainty for Charles Koch in 2015. Even for someone who embraced volatility, the events of 2015 and 2016 were unsettling.
The American public, it seemed, wanted to go its own way, regardless of the consequences. There were murmurs of rebellion everywhere, which culminated in a crisis of American governance that threatened to upend the political project that Charles Koch had labored over for forty years.
There were rebellions and problems within the company as well. A stubborn, deadly set of problems emerged inside Georgia-Pacific, one of Koch’s largest and most important divisions. Perhaps most frustratingly, these problems refused to be tamed by the tenets of Market-Based Management. People were dying, and the best efforts of management didn’t seem to be working.
The anger among American workers was bubbling up, burning particularly hot in Georgia-Pacific’s warehouse operations in Portland, Oregon. That’s where Steve Hammond was about to make his final stand as an official with the IBU labor union.
* * *
I. During Hawley’s career at Wichita Collegiate, his players won fifty state titles by 2018 and he was inducted into the National High School Tennis Coaches Association Hall of Fame.
II. UAN stands for urea-ammonium nitrate.
CHAPTER 23
* * *
Make the IBU Great Again
(2015–2017)
Steve Hammond volunteered to become a union official because he wanted to make things better. He wanted to improve life at the Georgia-Pacific warehouse. He wanted to curb the power of the Labor Management System and win pay raises for the employees. He wanted to restore the Inlandboatmen’s Union to its former greatness. Instead, he spent a remarkably large portion of his time tangled up in long, complicated disputes with Koch Industries.
The IBU had hundreds of members in Portland, who worked for several companies. But Hammond estimated that he spent 75 percent of his time handling complaints from the hundred or so employees at the Georgia-Pacific warehouse. The Labor Management System was grinding them down. They were forced to work overtime, and were disciplined or fired for small infractions and absences. The employees came into Hammond’s office constantly with their complaints, demanding that he help them and file grievances. They begged him to win a better labor contract when negotiations reopened. Every day, when he went into the office, Hammond walked past the big stone plaque outside the union hall with the motto “An injury to one is an injury to all.” The motto felt like an open challenge to Hammond. It was an open question whether the motto, and the solidarity that it expressed, was a museum piece, or whether it was an animating force that might be employed for the benefit of workers.