As third-generation owners of a real estate company founded by their grandfather, brothers Paul and Roger Koch know the benefits and drawbacks of keeping business in the family. The Kochs are co-chairmen of the board of St. Louis-based Koch Development Co., which owns, manages, and develops retail, office, and entertainment properties in five states.
“In any family business, you go through periods of stress and relative calm,” says Roger, BSBA ’64, MBA ’66. “It’s important to find ways to work through that.”
Adds Paul, BSBA ’61, JD ’64, MBA ’68, “Very few family businesses survive beyond the third generation, and that is a waste of resources for our economy.”
In order to provide family businesses with the necessary leadership and knowledge to extend their legacies into the future, Roger and his wife, Fran, and Paul and his wife, Elke, made a $1.09 million commitment to launch a family business initiative at Olin Business School. The gift also establishes the Koch Family Business Scholarship for MBA students planning to pursue careers with family businesses.
In addition to scholarships, the initiative will offer a family business internship program; practicums that pair faculty-led student teams with family businesses seeking solutions to issues they face; and educational and networking opportunities for students and the family business community, including an annual symposium.
The impetus to create the family business initiative stemmed from the Kochs’ personal experience. After 50 years of guiding Koch Properties, and through their interactions with other family business leaders over the years, Roger and Paul were familiar with the unique challenges facing these enterprises, such as how to manage succession planning, governance, and intergenerational conflict.
“The problems are fairly consistent across family businesses,” Paul says. “So is the emotional component within families that makes these issues even more complex.”
Another challenge is attracting and preparing young people—those who have ties to family businesses and those who do not—to take on leadership roles in these organizations. “Like any business, we need talented people,” Roger says. “It’s important to educate students about the opportunities available in family businesses and how rewarding these careers can be.”
The Kochs were confident Washington University could help family businesses throughout the region address their needs. “The university is on the leading edge of just about everything,” Paul says. “It’s in an ideal position to provide expertise.”
The Kochs’ investment in family business at Olin builds on the family’s long history of philanthropy at Washington University. They have provided significant support for the Alvin J. Siteman Cancer Center and for scholarships and facilities at Olin Business School, where both Roger and Paul earned undergraduate and graduate degrees. Paul and Elke also support the School of Law, where Paul earned his law degree.
Roger and Paul received Distinguished Alumni Awards from Olin in 2012. They attribute much of their professional success to their education at Washington University. “Throughout our careers, that base has helped us develop our business,” Roger says. “It’s been a wonderful resource.”
Adds Paul, “Every day I am thankful for Washington University. I think in both of our lives, we look back and say that the decision to attend the university was a really good one.”