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Principles in Brief

Requirements for Human Action


For Koch to succeed long term we must enable employees to understand what we are trying to achieve and empower them to achieve it in a principled manner. Bringing about this beneficial result requires an understanding of what causes people to act.

In his book, “Human Action,” noted economist and philosopher Ludwig von Mises provides that understanding. He posits that three requirements must be met for individuals to take action:

1)  unease or dissatisfaction with the present state of affairs,

2)  a vision of a better state, and

3)  a belief that they can reach the better state.

For example, we mow our lawns only when we are dissatisfied with their present condition, believe they will look better and know how to mow them. Customers switch to Koch when they become dissatisfied with their current supplier, believe we will serve them better and are able to switch.

Organizations that fail to meet these three requirements develop a culture that stifles progress.  In contrast, successful organizations: 1) create dissatisfaction with the status quo, 2) provide a vision of long-term success and fulfillment, and 3) empower employees to contribute by building a culture of Principled Entrepreneurship™.

We strive to create dissatisfaction with the current state by helping employees recognize that no matter how well they and the company are doing, unless they continually improve and transform themselves, creative destruction will ultimately cause us to become obsolete.

We help employees develop a vision of a better state, first by understanding their organization’s and Koch’s vision and our principle-based framework, then by demonstrating that they will be better off if they more fully apply this framework to advance these visions.

The most difficult requirement is helping employees believe they have a path to a better state. For many companies, satisfying this requirement becomes impossible because they have developed a bureaucracy-based framework and culture that stifles employees’ ability to fully contribute.

We learned of one such situation directly from an officer at a major company. He said it was hopeless. They were stymied by bureaucracy, red tape and resistance to change. When asked what he was doing about it, he responded: “After a while you just paint your ass white and run with the antelope!” He and most others had given up. This happens when once-successful companies rest on their laurels and become complacent, self-protective and stagnant. When they do, employees have no path to a better state and decline sets in.

To overcome this tendency, our principle-based framework empowers our employees to reach a better state by motivating them to maximize their contribution to their organization’s and Koch’s long-term success. This entails ensuring they have meaningful work that fits their talents and passions, have appropriate control over their activities, are able to develop and grow, have the opportunity to be creative and receive meaningful rewards.