A Q&A with Robert Koch of Koch Enterprises
Founded in 1873, Koch Enterprises started out in the tin horn and metal furniture business and later changed to paint finishing systems. Over the years, subsidiaries were added ranging from aluminum recycling to HVAC equipment distribution.
Today, Koch Enterprises employs more than 2,600 people across 13 states and four countries. The fifth-generation family company encompasses eight businesses, including Audubon Metals, Gibbs, Koch Air, Koch Finishing Systems, South Western Communications, Brake Supply, Amprod and Promenade.
Robert Koch, chairman of Koch Enterprises, Inc., spoke with Inside INdiana Business about the company’s core values and how those principles play an important role in its resilience.
Take me back to September 1873. How did Koch Enterprises get started?
George Koch was about five years old when he came over from Germany with his father, mother and a couple of siblings, and they ended up settling in Evansville. When George grew up, he worked for a forging company and then started off on his own making metal items for homes. He’d get on a boat and sell them down the Ohio River and Mississippi River.
On one of his trips, the Civil War broke out, and they closed the rivers. He couldn’t get back home, and he had to stay in Vicksburg, Mississippi. Then he got drafted and fought for the South while his brothers were fighting for the North.
After the war, he stayed in Vicksburg, got married and built a little sheet metal shop. They were doing really well for a couple of years, and then it all burned down one night. He communicated with his family back home, and they said, “Come on home, and we’ll help you finance and get started with a sheet metal shop in Evansville.” That was in September 1873 when he opened his shop in Evansville. It was called the George Koch Tin Shop.
George continued to make metal items. He made buckets and wash tubs for homes and a variety of metal items for mostly residential use. Then he passed away in 1903 from the flu, and three of his sons, George, Albert and Louis, incorporated the business as George Koch Sons. They named the business in honor of their father … and the business continued to grow.
After many acquisitions, we decided that rather than call it George Koch Sons, we should probably have a holding company that’s in charge of all the operating companies. So we started Koch Enterprises in 2001.
The company has changed a lot over the years. What’s stayed the same?
Our core values: customer focus, integrity, community service, continuous innovation. Those core values have been our guiding beacon for all those years. Respect for people. We try to give people the opportunity to develop and grow and do the best they can possibly do and enjoy doing it. Those are the kinds of things that have helped us and have been constant.
This business has been in your family for five generations. How does that feel?
It’s pretty unusual. Not very many companies make it that far. Not only family companies don’t make it, but regular companies don’t make it. We’ve been fortunate and lucky and blessed with good results and family members who were interested in the company.
A lot of times family members are not interested in the company. In fact, a number of our acquisitions have been in small, family companies where they’re going for a couple of generations, and then the next generation has no interest in the company. We like to help grow them. We think they’re good businesses and have some good futures.
Why do you think Koch Enterprises has been successful over the years?
It has to do with those core values: treating people with respect, continuous innovation, a lot of community service. Our team members probably give almost 30,000 hours of volunteer service. And we have people that are on maybe 150 boards and help out in all sorts of ways.
We have a foundation, too, that makes contributions to help the quality of life in areas where we have operations. We like to give back to the community because the community has generally been pretty nice and pretty good to us.
How did the COVID-19 pandemic affected the company?
Our company got an exception to keep operating during that time because some of the things we do were critical for industry. But one of the things we do is make parts for cars, and cars didn’t sell. That was a tough time. We tried to keep people on as long as we possibly could, but it went on so long that we had to do some layoffs. I hate to do that. That’s really horrible. But you have to keep the organization going.
All those people are back now. In fact, we’re looking for probably a couple of hundred extra people right now.
What are the challenges facing the company today?
There are lots of challenges. We have this one company that we bought that repairs heavy-duty off-road vehicles. Before we bought them, they sold brakes that had brake linings that had some asbestos in them. It was when asbestos was thought to be a good product. Since then, they found it causes mesothelioma and asbestosis, so now we’re facing some lawsuits…That consumes an awful lot of time and energy from a company to prove we’re innocent.
Of course, we’re also looking for good employees. We’re short employees. We’re asking people to work overtime and do other things to help make up for the shortage of people. Finding good people is a challenge right now.
What does it mean to you for Koch Enterprises to reach this milestone?
It’s pretty remarkable. There are other companies that have reached 150 years, even in this area. Old National Bank, of course, is older than that. I think Fifth Third is older than that. But they’re not still in the same family, there aren’t very many families. So it’s a great celebration for us.
What does the future look like for the company?
It looks great. It looks good, really positive. We have some in the sixth generation now that are interested in continuing the business, so we’re good for at least one more generation. I don’t know if we’ll make 150 years more, but we’ll go at least 50 years more.
What advice do you have for companies that aspire to this type of longevity?
First of all, you need to have some really strong core values. That’s a key part of it. And then not only have them but put them into practice. Act on them, don’t just set them on the shelf. Make sure they’re part of your daily thinking and regular practicing.
And then keep looking. You have to keep innovating. If we were still making those metal buckets, we’d be out of business. And even if we were still making those tin horns, we’d be out of business. You have to keep changing and innovating and improving and looking for new opportunities and new ideas.
Anything else you’d like to add?
We’ve been fortunate to have a lot of really dedicated and capable and engaged people helping with our company. In fact, we’d like for everybody to be totally engaged, and we’re getting closer to that. But it’s still always a challenge to give everybody the opportunity to fully develop themselves and rise to their full potential in the organization. That’s our goal.
I’m most proud of seeing all the people who have really just flourished and really developed in our organizations and just done a fantastic job.
Chairman of Koch Enterprises, Inc