Entrepreneurship is the innovative, experimental act of identifying and pursuing an opportunity. It can take any number of forms, such as creating a new business, product, service, process, method or type of organization. It involves risk because the future is always changing in unpredictable ways.
Principled Entrepreneurship™ is the discipline of always practicing entrepreneurship in a principled manner. Our Vision is to create good profit long term by providing products and services customers value more than their alternatives, while consuming fewer resources and always acting lawfully and with integrity. Good profit is earned by making a contribution in society – not from corporate welfare or other ways of profiting by taking advantage of people.
Since creative destruction is a driving force in a market system, we continually strive to improve the value we create for customers and society faster than our most effective competitors. This entails not only a better understanding of what customers want now, but what they will want in the future. It is especially difficult because very few customers are aware of what they would prefer until they are shown a better alternative. Identifying and satisfying these unmet needs is essential to successful entrepreneurship.
We depend on the entrepreneurial contributions of our employees. If it is easier or more beneficial for employees to practice entrepreneurship elsewhere, we will inevitably fall behind. This is why we are dedicated to empowering employees to become principled entrepreneurs.
Independent entrepreneurs seek to create new and better products or services and ways of doing things. But they rarely have the necessary resources, requiring them to develop their ideas well enough to access capital. The same is true inside Koch. To be a principled entrepreneur, you cannot let the need for approval stifle your initiative. Our principled entrepreneurs develop their ideas by seeking the knowledge and challenge leading to proposals that will earn approval.
A top-down, bureaucratic approach crushes entrepreneurship. We strive to create a bottom-up environment of empowerment that unleashes the entrepreneurial spirit and initiative of contribution-motivated employees. Such employees continually identify and close the gaps between what they are and what they could be accomplishing.
Supervisors at every level are responsible for building an environment that encourages and supports Principled Entrepreneurship. This includes: establishing a clear understanding of what Principled Entrepreneurship looks like; enhancing the pursuit of knowledge through experimental discovery and knowledge sharing; eliminating waste and bureaucracy; and establishing an appropriate risk tolerance for trying something new. We expect supervisors to fight the complacency and inertia that develop over time – particularly when we have been successful; build a commitment to stewardship and compliance; and align the interests of employees with the company’s.