Jim Koch Quotes

Remember that most of us came into this world as screaming, messy blobs of bad plumbing, but with a little love and attention and faith in our future, we managed to grow into fully functioning

Don’t hire until employees will pay for themselves, either in more sales or cost savings, on day one.

It kept him on edge, and this was the key to thriving in the private equity economy. The heavy debt required ever-better performance and leaner operations. The pressure to achieve this never stopped. It was transmitted from Charles Koch, to Jim Hannan, to the cadre of executives who worked around him. Then, perhaps most importantly, it was transmitted down the chains of command to the ground level of Georgia-Pacific.

To acquire Georgia-Pacific, we took it deep into debt—to the point where unless performance improved, Georgia-Pacific would be in violation of its loan covenants,” Charles Koch later wrote. Now debt became a virtue rather than a burden, a force that established motivation and self-sacrifice among those who carried it. Koch Industries announced its plan to take Georgia-Pacific private in mid-November of 2005. The deal made Koch the largest privately held company in the nation.III Koch would be adding fifty-five thousand new employees to its workforce of thirty-three thousand, more than doubling the company in size once again. Jim Hannan was quickly informed that his services were no longer needed at Invista. He would move to Atlanta and help Koch absorb the largest acquisition in its history.

I learned an important lesson—that the value of the stock is not the same as the underlying value of the company. The stock goes up and down according to the whims and wiles of Wall Street. The value of the company depends on elements that contribute to the creation of real value—things like providing superior products at fair prices. You need to be learning and innovating, giving your people interesting, motivating work and compensating them fairly, creating value for your community, and doing it all in a way that yields a good profit. That’s not what much of Wall Street values, but it’s what creates long-term value for investors.

Ken Grossman, Beyond the Pale: The Story of Sierra Nevada Brewing Co. Sierra Nevada Brewing Co.’s cofounder talks about home brewing, scrounging for equipment, scaling up his brewery, and growing his business for thirty-five years.

Tom Hopkins, Selling for Dummies. Selling is applied communication and vastly underrated in business education. If you want to know how viable your business is, go try to sell your product to some potential customers. This book is a solid primer on basic selling skills. You won’t need much more.

The organization ends up fully committed to doing things that most people in the organization know are ineffective or wasteful but that those same people pretend are not stupid and all keep doing. Meanwhile, observers on the outside laugh at these poor souls who are trapped in foolishness that they themselves realize is foolish. Companies do this kind of thing all the time. And the creator of Dilbert, Scott Adams, has

If you like the thought of being your own boss, don’t stress out about finding the “perfect” company to start. Listen—and listen some more. When you happen upon the right channel, you’ll know

Some people see sales as morally dubious because they think it’s about merely pushing a product. Not true. Done right, selling is about helping customers.

In 1984, the creator of Sam Adams beer, Jim Koch, was staring long and hard across the chasm. It was spring. It was the beginning of the baseball season in Boston, and it was about to be “morning in America.” Ronald Reagan was preparing for what would be a landslide reelection to the presidency, the economy had finally turned around after years in recession, the US Olympic team was about to run away from the competition at the Summer Games in Los Angeles, and Jim was in the middle of his sixth year as a management consultant for Boston Consulting Group (BCG), already earning $250,000 per year (that’s more than $600K in 2020 dollars) before his thirty-fifth birthday. By all accounts, Jim Koch had it made. His feet were planted securely on the terra firma of the business consulting world. “We flew first-class. You consulted with CEOs. Everyone treated you really well,” Jim recalled. These were interesting, heady times at BCG. The company had just become fully employee owned, complete with an employee stock ownership plan (ESOP) that forged a real path to truly significant wealth for consultants like Jim. At the same time, he had already worked alongside a quartet of future luminaries:

It was a great job for a while,” Jim said with trademark understatement. For a while? At Jim’s salary, with the stock options still ahead of him, he was closing in on “pay off your parents’ mortgage and start a foundation” territory. What more could one person possibly want from a job? Well, for Jim Koch, it wasn’t about more; it was about different. In the beginning at BCG, Jim was being paid to learn about business strategy, product categories, organizational issues, and business problems. But once he entered management, his job became . . . well . . . boring. He was selling BCG’s services rather than diving into problems and finding solutions. “The learning stopped,” he said. “And then I had this epiphany. I asked myself, ‘Do I want to do this the rest of my life?’ And the answer came back: ‘No.’ And the corollary to that was, ‘Well, if I don’t want to do it for the rest of my life, I probably don’t want to do it tomorrow.

This principle of only hiring people who are better than the ones we currently have means we don’t make desperation hires to fill an open position. And the raise-the-average rule makes hiring decisions surprisingly easy. It’s easy to visualize in your mind the average person in your sales force or on your brewery floor or even in senior management and it’s easy for your intuition to evaluate whether a candidate is better than the average person. Your gut will tell you. If you’re used to traditional hiring, you might feel uncomfortable turning to intuition. Aren’t we taking too big a risk by relying on our gut feelings about somebody rather than rationally assessing facts such as past experience or education? I would counter that we’re fooling ourselves by not relying primarily on intuition. As recent neuroscience has shown, our brains don’t work rationally. If you hook a functional MRI machine to a chess grandmaster, you find that the best of them are not rationally calculating their next moves; they’re imagining what will happen, unconsciously bringing to bear the hundreds of thousands of moves they’ve already seen. They’re arriving at a feeling that guides their actions. They are using the nonrational part of their brain. The quantitatively logical part of your brain is pretty paltry. Just try counting by prime numbers while you’re multiplying other numbers by seventeen. Impossible. But reading emotions by looking at someone’s facial expressions while you’re navigating a crowded sidewalk is easy for your brain.