Principles vs Politics

Instead of dwelling on what might happen in 2012 – as so many people are doing this time of year – it is essential for all of us to focus on something at least as important: our MBM® Guiding Principles.

Abiding by these principles should always be at the top of our to-do list, but especially in the heated political environment we’re seeing today.

We are now – as we have been for many months – under intense scrutiny. Our critics include many policymakers who seek to punish their opponents for purely political reasons.

In circumstances such as these, actions, not intentions, are what count.

No matter how well-intentioned we may be, if we are careless or make a mistake, we make ourselves an easy target for our critics.

This has been true for many years. But in today’s divisive environment, the consequences of any mistakes are likely to be amplified even more.

Getting started

Our goal as a company is to create real, long-term value for society, and to do so in a principled way. That’s why our list of principles begins with integrity, followed by compliance. Both of these are required for true value creation.

If we lack integrity or disregard laws and regulations, we not only won’t create long-term value, we won’t be in business for very long.

This is why, if you see a problem that needs to be corrected, or have a genuine concern about a possible compliance issue, you must call attention to those issues.

Lack of authority is no excuse for inaction when it comes to compliance.

As I wrote in my book: “There is no excuse for failing to take a critical action, even in areas of shared responsibility.”

Failure to take responsibility “can be devastating, as when a government report is filled out improperly because the business leader, operations supervisor and compliance specialist all assume someone else is responsible.”

If there are any gray areas involving compliance – things that might depend on interpretation or even opinion – we must be especially careful.

Cost of growth

Last year’s results confirmed we are doing many things the right way. In fact, several of our businesses enjoyed record results and significant growth. That kind of growth typically leads to job creation.

According to an independent study last year, we already support at least 203,000 jobs in the U.S. More jobs are on the way.

As of Jan. 1, 2012, we had more than 2,500 open positions (200 of them international) across all Koch companies. At least one-third of these are new positions.

The essential challenge for our Human Resources team is not just hiring enough people, but hiring the right people – namely, those who not only have the talents and knowledge we require, but who also share our values and vision.

The right combination of virtues and talents is essential for success. Having one without the other is not only insufficient, but potentially dangerous (especially if we hire talented people who lack virtue).

What to expect

Despite the value we create, the jobs we support, our many charitable contributions or the hundreds of awards we have won in recent years, we remain a target of orchestrated attacks.

Given the barrage of criticism and misinformation we were subjected to last year, it doesn’t take a gift of prophecy to know that such attacks will only intensify and increase this year.

In a perverse way, these attacks show that we are making progress, otherwise we wouldn’t be criticized so much.

You should know that we will remain steadfast in our support of economic freedom, and of the greatest possible prosperity for all Americans.

But our efforts to advance the cause of economic freedom will be diminished if we shoot ourselves in the foot by not paying attention to our principles.

To-do list

In addition to abiding by our Guiding Principles, there are two things all of us can do to improve our future.

The first is to elect leaders who understand the principles of economic freedom and will do their very best to implement those principles as policymakers.

The second is to keep pressure on them to remain true to these principles.

What I said in my October 2010 Perspective editorial is still true: “If you are concerned about creating jobs, growing our economy and enhancing our quality of life, then you need to be concerned about electing candidates that support economic freedom.” We must oppose those who promote runaway government spending, destructive overregulation and cronyism.

It is not too early to start doing your homework.

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