Harry A. Koch
An Interview with Scott Hill, President and Megan Thom, VP of Human Resources of Harry A. Koch
by Zach Braun Candace Prescher, Creighton University MBA students
What is your background Mr. Hill? Where were you raised?
Scott Hill was born and raised in Omaha, Nebraska. He was raised with a strong sense of work ethic. Throughout his early life and through school he would work at his dad’s gas station whenever he had free time. In 19895 he obtained a degree in accounting from Creighton University and followed up with obtaining his CPA. His career started out at First National Bank auditing rural banks and insurance operations when he was then offered a position in insurance. Scott grew up with this company to now oversee Harry KochFirst Insurance Group’s 17 agencies in 4 states with 200 employees as President.
What do you like most about your work? Least?
Scott loves his people and the positive culture they have cultivated. He values celebrating success and professionalism - “leave the drama out of the workplace.” Scott doesn’t like unnecessary strife or internal competition, he actually referred to it as one of his biggest pet peeves. He likes to think of his employees as family and they should only be working together against outside competitors. With this sense of family culture, Scott strives for personal and professional growth for every one of his employees.
Can you define ethics and tell us what ethics means to you?
Scott defines ethics as right and wrong, acting with integrity, and having good moral character. Acting with good moral character is determined by “what you do when nobody is watching.”
Ethical behavior is very important to Scott. Acting ethically and having unity in behavior between home, work, and church is important to him. A united, ethical culture is very important to Scott and he believes that begins at the top of an organization. Scott believes that he should lead by example and expects others to do the same. He emphasized “consistency” - consistency in words and action.
Is there a formal ethics program at your firm?
While there is no formal ethics program at The Harry A. Koch Co. there is a set of expectations laid out in the employee handbook’s code of conduct. Scott was gracious enough to offer a copy of the entire handbook, and we were able to see the values of trust, integrity, entrepreneurial spirit, knowledge, courage, discipline and communication clearly stated in the beginning. These guidelines and values are then set into action by management and are promoted throughout the company. Part of an employee’s performance review is based on their compliance, integrity and honesty, and demonstration of living the values of Harry A. Koch.
Talk about the ethical culture at your organization.
In the past Harry A. Koch suffered from a weaker culture which Scott and his team have worked hard on improving. He asked his employees, “Do you want to go on a journey with me? Do you think the culture should change?” and that’s when the employees were engaged to make a positive change to the company’s culture. Scott clearly defined the company’s ethical boundaries and gave employees the freedom to act within those boundaries. Everyone at Harry A. Koch is expected to act with integrity and honesty. Profits are made by the premiums they provide to customers. If they find a lower premium for customers they still present that option evenif it means losing out on profits because it’s important to have integrity and get the customer the best deal.
Describe an ethical situation in business you have faced that was relatively easy to handle.
Earlier that day Scott the businesstheyhad to let an employee go. While it’s never truly easy letting someone go, Scott said it was an easy decision because this employee was not acting in accordance with Harry A. Koch Co. values. Scott believes inthat everyone makingmakes mistakes,andgetting counsel,but he does not believe in dishonesty and one not owning up to their mistakes. This[MT1] employee was found deleting emails and falsifying documents to cover up mistakes which were made. To Scott this was an easy decision although not so easynot a difficult decision. She intentionally overstepped the ethical boundaries of what is acceptable at Harry A. Koch.
Describe an ethical situation in business you have faced that was hard to handle.
It was a very hard decision to let the “most liked individual” in the company go. She was not meeting performance goals and that was overlooked for years because she was so well liked. Management looked the other way and “kicked the can” down the road for another day. While it was a hard decision to let her go, it was necessary. A woman who worked for the company for 20 years was well liked but often didn’t meet performance goals. They let human nature play a role in their decision for a long time, but ultimately they had to make the right decision for the business and that was to let her go.
Another example of a hard ethical dilemma played out on the golf course. A foursome was coming back from a company trip and they decided to stop at the golf course. It was Scott and another senior manager against two lower ranked employees. Money was on the table and everyone was responsible for keeping their own score. It turned out that the other senior manager was cheating and got caught, not only by Scott but by the lower employees as well. Scott gave him an earful and he was silent the rest of the trip. This was the perfect example of letting ethics guide you within your personal life as well as professional life. Scott was disappointed in the senior manager on a personal level as well as professionally. That senior manager was ultimately let go for lying on another matter. To Scott this was an example of living your ethics and this particular individual was not portraying the best ethical behavior.
How does it feel talking with us about ethical quandaries you faced? Or talking about them in the firm? That is, is ethics talked about or just assumed?
Scott and Megan were very comfortable discussing ethics with us. We could have talked for another couple hours about personal and professional ethics. To them ethical behavior is expected so anything butless is easy to address. When a company culture supports positive ethics the bad seeds get weeded out early. Management sets the boundaries and acting outside those boundaries is cause for termination. The tone at the top definitely resonates throughout the company and resonated in our discussion.
Are there unethical behaviors that give other companies and/or business people a competitive advantage?
According to Scott the insurance industry has a lot of shortcuts but it takes a true champion to bypass these short term gains for the long term win. For example, there was a competitor that often lied about employee mileage to the office and always came in under the budget for premiums but it wasn’t realistic. Scott would quote mileage at what was realistic. Ultimately companies would figure it out with higher premiums in the end due to these ethical oversights. Scott remains firm that he maintains his integrity and expects employees to do the same for the firm. He made it clear that he is not perfect, but then again who is? What’s important is that Harry A. Koch values ethical integrity and the employees live these values.
Have you had any ethical mentors?
Scott’s ethical mentor is definitely his father, he expressed that enthusiastically and with such confidence. His father had a great work ethic and owning a gas station on the East side of Omaha he didn’t care about any discrimination that was in the air. Everyone at Scott’s dad’s gas station would help any customer no matter race or creed. And as a car technician he would only do the work that was necessary on customer’s cars, no overselling. Scott even told us a story about how his dad would help fix another’s car even knowing that they couldn’t pay and he ultimately had to write it off. It was Scott’s father’s “lead by example” behavior that taught Scott his ethical courage and is where he learned to lead from the top.
As you move up in the organization, how have ethics played a role in decision-making?
According to Scott the ethical challenges will get more difficult and complex as you move up in leadership, as your decisions affect more people. “The higher up the totem pole you get the greater the ethical situations you will find yourself in”. Scott offered us advice to not let our pursuit of a career compromise our ethics and to not put someone in a position where people need to “sacrifice their ethical DNA.” Remaining consistent in your personal and professional values will ensure happiness.
What responsibility, if any, do you believe Harry A. Koch Co. has to the community?
Scott believes that as an organization he owes his employees an opportunity to grow their careers and have a great time doing it. At Harry A. Koch Co. they offer 15 hours of volunteer time to employees no matter what the cause. They also have jeans days for a small fee that goes towards community causes. Ultimately, Scott values ethical behavior, encourages that in his employees, and believes that they should conduct themselves in an ethical manner within the community as citizens, by giving back when they are able to do so.