Discovery Newsletter: Perspective, Steve Feilmeier

January 1, 2017

By Steve Feilmeier, Chief Financial Officer, Koch Industries, Inc

The 1904 World’s Fair in St. Louis, Missouri, was designed in part to demonstrate some of the world’s great new technologies, such as x-ray machines, baby incubators, electrical outlet plugs and even wireless telephony. More than 60 countries and 43 of the 45 American states maintained exhibition spaces at the fair, which was attended by nearly 20 million people. But one of the most popular innovations was actually conceived at the fair itself. Although ice cream had been served on dishes for years, it wasn’t until this World’s Fair that the ice cream cone was born. An ice cream stall at the fair was doing so well that they were quickly running out of plates while the neighboring Persian waffle stall was hardly selling anything. The two stall owners then had the idea of rolling up the waffles, plunking the ice cream on top and as a result — the ice cream cone was born.


OLD + OLD = NEW

Many definitions of innovation recognize the presence of old ideas, combined in new ways, such as the ice cream and the waffle. Joseph Schumpeter, for example, described innovation as producing “other things, or the same things by a different method, meaning to combine these materials and forces differently.” Thought of this way, our expectation of constantly seeking new ways to create value is not so daunting. We don’t need to be futurists, or scientists that discover new materials. Rather, we simply need to be curious and willing to explore analogous processes, techniques and methods in other industries to see how they might solve a problem in our own industry. For example, Ford Motor Company developed its ideas for mass production not by studying the techniques at General Motors or other carriage makers, but by bringing together existing technologies from granaries, breweries, foundries, bicycles, canning and the Chicago stockyards.


Studying the methods already known by your industry is important, but won’t lead to proprietary breakthroughs.

KOCH’S UNIQUE OPPORTUNITY

Given the diversity of the industries in which Koch operates, we enjoy a unique opportunity to learn from each other, then innovate in our own business or capability. Few other companies in the world are so well-positioned to do this. Molex and FHR are working with each other to develop new sensing systems; GP and INVISTA partnered to commercialize a new STAINMASTER™ carpet care line; GP and Koch Agronomic Services did the same with a nutrient called NITAMIN® fertilizer; Molex helped the Chemical Technology Group increase machine speeds; and INVISTA has helped Molex with nylon formulations. In our capability groups, we are learning from each other how to advance important new software capabilities that help us with sales, marketing, procurement, logistics and compliance, just to name a few. With our recent investments in software-based technology businesses such as Solera, EFT and Infor, we now have the opportunity to better integrate software into machine tools and processes we work with daily.


YOUR TO-DO LIST

As Charles Koch pointed out in the October 2016 issue of Discovery, “we want our companies to be more effective innovators. But just as important is getting every employee to become more innovative.” Fortunately, the possibilities for innovation at Koch are endless. Here are some things you can do to get started. First (and most important), be a lifelong learner. Constantly expose yourself to different ideas, methods and technologies that might be applied to improve your work. Sources can be other parts of Koch Industries, companies in your or other industries, or sources outside of your business altogether. Never forget that innovations primarily come from combining existing ideas in new ways. Charles has been talking about this concept for many years. More than 10 years ago, in his first book, “The Science of Success,” he used Southwest Airlines as an example. “When Southwest Airlines sought ways to decrease the time it took to refuel, disembark and board passengers, and unload and load baggage, it did not study other airlines. It studied NASCAR pit crews and drivers.” Very few jobs will look the same in another 10 years. Any person (or company) that settles for the status quo is actually falling backwards while others progress. Get excited about advancing the experiments in your business or capability and always be on the lookout for new ways to use ideas. There will always be better ways to do everything. Either we come up with them ourselves or others will.