Tye Darland | Executive Profile | ATLANTA TREND
The Value of Work
By Robert Green
“I truly believe in the value of work and I learned it at an early age,” says Tye Darland, General Counsel of Georgia-Pacific. “I remember helping my mother do inventory at her clothing store every New Year’s Day. She couldn’t afford to be closed on a regular work day but it helped me to see that in business, as in life, there are often things that you just have to do.”
Tye Darland was born in Omaha, Nebraska, and grew up in Charles City, Iowa, a small town of 10,000 in the northeast corner of the state. “It was a small, safe town and everybody knew each other. This was sometimes annoying as a kid, but it was a great upbringing,” he says. Darland’s father worked as a civil engineer while his mother ran the clothing store. He credits working with his mother with teaching him the most about business. “There is nothing like working in a small business to help a young person learn how free enterprise works – every aspect of big business is in reach. You can’t help but get a personal primer on sales, marketing, accounting, customer service, and everything else required by business in general.” Darland’s father was also involved in his early business education. “I had contracted to remove snow for all the stores on Main Street, but this meant getting up early to shovel. My father got up every winter morning at 4:00 a.m. to take me into town so that I could work. He sat in the car and never got out to help me even once. Now, there were plenty of times when it probably would have been more convenient for him if the snow was removed faster, but he didn’t budge – the job was my responsibility and I had to do it.”
It wasn’t all work for Darland as he took time for the wrestling team in junior high school and on the debate team all four years at Charles City High School. “Debate transformed me,” he says. “It really taught me to think on my feet. We also had an excellent team and finished 2nd and 3rd in the entire state over consecutive years. Considering that we were the smallest school in the state with a debate team, this was pretty good.” Darland also worked as the manager of the local Dairy Queen while in high school, responsible for all aspects of the concern. “I got fired once for a foolish prank, but was hired back because the owner knew that I was totally trustworthy not just in managing the store, but also in faithfully depositing every nickel that we made.”
After high school, Darland went to the University of Iowa and married his high school classmate while an undergraduate. He majored in accounting and sat for the CPA exam, but ultimately decided to go to law school, also at Iowa. “Law school was scary,” he said. “A lot of smart people didn’t make it, but I did well, fortunately. The main criticism that I received from my professors was that I should speak up more in class.” Darland indeed did well, serving as Managing Editor of The Journal of Corporation Law and making Order of the Coif, which is reserved for those graduating in the top ten percent of their class. Then came the recruiting process, of which Darland says he didn’t have a clue. “I decided to concentrate on Minneapolis and St. Louis and had 17 or 18 interviews, but at the time I simply had no context for dealing with ‘big city’ people, so I was a little intimidated,” he says.
Ultimately, Darland decided to work for Morrison Hecker in Kansas City because 40% of their partners were from Iowa – he felt that he would feel more at home there. In four years at the firm, he worked on a number of important cases but says the most exciting work he did was to help figure out exactly what went on in Charles Keating’s failed Lincoln Savings & Loan. “I spent a lot of time in Phoenix,” he says, “and kept analyzing the documents until I could see the patterns of fraud in their many transactions.” His other work included a number of merger deals and real estate work. He felt that he was lucky to learn a lot from several mentor attorneys and enjoyed working as a corporate attorney.
In early 1993, Darland received a call to come and interview for a legal position at Koch Industries. Deciding to take the interview, the first question that he was asked was “why do you want to be a litigator?” Being a corporate attorney, Darland naturally said that he didn’t want to be a litigator. The interview went forward anyway, with a discussion focused mainly on values and beliefs. Surprisingly to Darland, he was called the next day and asked to join the company. “I was shocked, but they said that they saw me as a good fit for character and values. They asked me to do litigation work for three or four months and said that they would later move me to corporate. I accepted.” The interview process was the beginning of Darland understanding the Koch culture where people with the right values, skills and capabilities are hired, retained and developed – a culture that has served the company well. Today, Koch Industries is one of the largest private companies in the U.S. with annual revenues of over $115 billion.
Darland joined Koch and was put on their capital projects team after three months. After three years, he was placed in charge of a team working primarily on merger deals, many of which were valued in the range of $300 to 400 million. “I worked hard and traveled a lot,” he says, “and went to New York City for the first time on one deal. I was still an awestruck mid-western boy and remember calling my father to say ‘guess what – I’m in New York City!’” His movement up the ranks of the company was governed by three main factors. “Always work hard, always tell the truth and never turn down a project no matter how bad or how hard it is,” he says. Darland became co-General Counsel of all of Koch Industries in 2003 at which time the company started looking at the acquisition of a large company in Atlanta called Georgia-Pacific.
Because he led the deal team for the purchase of Georgia-Pacific, Darland became very familiar with the company and in December of 2005, right after closing, became the General Counsel of Georgia-Pacific. He was 41 years old.
Change comes hard to any organization but some people – and companies – do it better than others. The legal team at Georgia-Pacific had 50 attorneys when Darland became General Counsel in 2005. “I could sense the team was concerned that the legal department would be cut so the first thing I told them was that, if anything, the team would grow.” He has 60 lawyers on staff today and 9 of the first ten hires were female attorneys. Next, Darland moved his office from the “executive palace,” as he calls it, on the 50th floor and into an office on the same floor with the rest of the attorneys. These moves seemed normal to Darland but were also part of the Koch way of doing things. “I just naturally fit into the MarketBased Management® philosophy of Koch – we are all part of a team and you live and work with integrity,” he says.
Darland and his family moved permanently to Atlanta along with the families of 6 or 7 other Koch employees, which helped make the transition easier. “We love Atlanta,” he says, “and quickly came to understand that Atlanta is a city where people just naturally immerse themselves in the community. While I love that aspect of the city, time can sometimes be a challenge.” Obviously, work comes first and there were a number of challenges to meet in transitioning Georgia-Pacific to a Koch-owned company.
Darland recalls, “On the day we closed the purchase of Georgia-Pacific, Charles Koch asked me what I thought our number one issue would be. Without hesitation, I told him that it was culture, that Georgia-Pacific had a command and control culture instead of a team culture. So, we did a couple of things right away to change that.” On day one of Koch management, the necessity of men having to wear coats and ties in order to meet with management on the top floor was eliminated. Also on that first day, they closed the dining room exclusively used by senior executives. “In Wichita, Charles Koch goes through a line just like everybody else and pays for his own meals. We can certainly pay for our own meals,” Darland says. These moves signaled big changes - and not everyone wanted change. Some people left almost immediately and Darland felt that most who left did so for one of three reasons; first, Georgia-Pacific was now part of a private company and some people wanted to work for a public company; second, the sense of urgency and responsibility that would now be placed on each employee was frightening to some; and third, incentive-based pay was hard for some people to grapple with.
“The alignment of incentives to value produced was a shock, at first,” he says. “Many people were used to pay based on the position or title held but, under Koch’s management philosophy, you are paid by the value you bring to the firm. That’s quite a change for people who have been used to step and level increases. Our goal is always to incent people to be productive and engaged.”
The Market Based Management® philosophy of Koch Industries, into which Darland fit so naturally, is applied through these dimensions: 1) Vision: determining where and how the organization can create the greatest long-term value. 2) Virtue and Talents: helping ensure that people with the right values, skills and capabilities are hired, retained and developed. 3) Knowledge Processes: creating, acquiring, sharing and applying relevant knowledge, and measuring and tracking profitability. 4) Decision Rights: ensuring the right people are in the right roles with the right authority to make decisions and holding them accountable. 5) Incentives: rewarding people according to the value they create for the organization.
The success that Koch Industries has enjoyed over decades by using this philosophy speaks for itself – and Georgia-Pacific has certainly benefited. Today’s Georgia-Pacific is financially stronger and healthier than ever. Koch historically reinvests 90% of their earnings back into their businesses and this has certainly been true of Georgia-Pacific. Since the beginning of 2006, nearly $11 billion has been invested across Georgia-Pacific businesses for acquisition, organic growth, innovation, cost reduction and to improve environmental, health and safety performance.
And the culture has changed. “In Georgia-Pacific today, it’s ok to challenge a leader, to say ‘I think you’re wrong, and here’s why,’ but that wasn’t the case previously at Georgia-Pacific,” says Darland, “and it’s also ok to not know the right answer – to say, ‘I don’t know.’” Employees are encouraged to engage in a practice called “seeking the best knowledge,” which usually yields the best response to a problem and has the added benefit of fostering cooperation. “What we want most of all is transparency and a free flow of information,” he says, “so that we can make decisions for the long term.”
Darland is happy that he found a home so many years ago in a company that values hard work. “It’s been rewarding to say the least.”
Darland is serious about showing his gratitude for success by giving back. He and his wife fund a full scholarship to the University of Iowa for a graduate of Charles City High School, where they first met. When he attended the announcement ceremony at the school he says that “it was the best feeling I ever had.”
He served on the Judicial Nominating Committee for Governor Sonny Perdue and currently serves on the Board of Directors of Zoo Atlanta and the Atlanta Police Foundation Board. Darland recently even gave a commencement speech to graduates of the Atlanta police academy. He is a member of the Georgia State, College of Law Board of Visitors.
Happily married, Darland and his wife will celebrate a 30-year anniversary this August. His eldest son works in Strategy and Development for Koch Industries in Wichita, Kansas, while another son is in college at the University of Mississippi. His daughter is a high school junior at Pace Academy.
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