Roskind often traveled to Wichita to provide updates on their business division to Charles Koch. These quarterly meetings were also attended by a small coterie of executives like Sterling Varner and Bernard Paulson. Roskind enjoyed being around Charles Koch—it was impressive to see this tremendously wealthy man eating in the company cafeteria with the rest of the employees.
Yet Roskind noticed that his traveling companion wasn’t enjoying himself nearly so much. Bill Koch resisted going to Wichita.
When Bill was at company headquarters, he was tense. And it was easy to spot the source of his irritation: there was something about Charles that put Bill Koch on edge. Just being in the same room with Charles seemed to darken his mood. Roskind didn’t understand why Charles Koch irritated his little brother so much. Charles wasn’t domineering. His demeanor was placid; his tone was always cordial. Charles Koch didn’t insult people and didn’t pound his fist on the desk. But even Charles’s smallest comments caused an oversized reaction in Bill.
“I didn’t fully understand what the tensions were,” Roskind said. “It never was over money, I don’t believe.”
* * *
After his successes in the chemical trading division, Bill Koch got a promotion. Or, because of how things worked at Koch Industries, it’s more appropriate to say that Bill Koch was promoted by his older brother, Charles.
Bill Koch was made vice president of a new division called Koch Carbon, which was typical of the kinds of businesses that Charles Koch and Sterling Varner liked to pursue: it pushed the company into new territory and new markets by building on what Koch already knew. Koch Carbon was branching out into the coal mining and processing industries, which built on Koch’s knowledge of the fossil fuel business. As head of the division, Bill Koch would have been encouraged to act like Bernard Paulson or Roger Williams: as an entrepreneur in charge of his own business.
Bill Koch did this, but in his own way. He built a staff in Wichita, many of them originally hired by Charles. One of Bill’s staffers was a young finance guy named Brad Hall, who was a prototypical Koch man, cut from the same mold as Lynn Markel. Brad Hall had been an athlete in college, played baseball at Wichita State University, and knew how to be part of a team. He had the kind of humility that was so deeply baked into his character that he didn’t even know he was humble. He was one of those middle-class kids from Wichita who intuitively knew that the world didn’t owe them a thing. Hall was also startlingly intelligent—he had the neural processing ability of a skilled engineer and a methodical approach to problem solving. He was a natural acolyte of Charles Koch’s, in other words. But shortly after he was hired, Hall was informed he would not be working for Charles. He would report directly to Bill and would help him build up the carbon division.
Bill Koch became enamored of the kind of data-driven analysis that Bernard Paulson relied on to run the Pine Bend refinery. But Bill’s version of data analysis borrowed more from the erudite traditions of MIT and the Ivy League than it did from the oil fields of the Midwest. Shortly after they started working together, Bill Koch sent Brad Hall an article that he’d read in the Harvard Business Review. The article outlined a computer technique that ran a probability analysis on the internal rate of return for potential deals. The model used something called a Monte Carlo simulation to figure out what the rate of return might be in light of a number of variable factors, like different overhead costs. Bill Koch asked Hall to do a Monte Carlo simulation on a major coal industry deal they were exploring.
Brad Hall’s task was overwhelming. He borrowed time on the mainframe computer that took up a large room in the basement of Koch Industries headquarters. The computer used punch cards that had to be individually tailored to each specific model run in each simulation. Initially, Koch’s computer engineers punched the cards, but the simulation required so many cards that they just let Hall start punching the cards himself. His small office became overcrowded with punch cards. Hall pushed himself hard to meet Bill Koch’s deadline, running simulation after simulation. He came into the office one Sunday morning, skipping church and leaving his family at home so he could work away at the punch cards. Hall knew it wasn’t unusual