THE SCIENCE OF SUCCESS

By Charles G. Koch

This groundbreaking book includes the same material used by the leaders and employees of Koch companies to apply Market-Based Management® (MBM) to get results. In it, Charles Koch outlines the unique management methodology developed and implemented by Koch Industries. Koch credits MBM® for its 2,500-fold growth since 1960, with approximately $100 billion in revenues, a presence in nearly 60 countries and 70,000 employees. MBM is a scientific approach to management that integrates theory and practice, and provides a framework for dealing with the ongoing challenges of growth and change. There really is a science behind success, and it can be applied to any organization.

MBM is rooted in the Science of Human Action, and is defined by five dimensions:

• Vision — Determining where and how the organization can create the greatest long-term value.
• Virtue and Talents — Helping ensure that people with the right values, skills, and capabilities are hired, retained and developed.
• Knowledge Processes — Creating, acquiring, sharing, and applying relevant knowledge, and measuring and tracking profitability.
• Decision Rights — Ensuring the right people are in the right roles with the right authority to make decisions and holding them accountable.
• Incentives—Rewarding people according to the value that they create for the organization.

The Author

Charles G. Koch is chairman of the board and CEO of
Koch Industries, Inc., a position he has held since 1967. Under his leadership, Koch Industries has been transformed into a dynamic and diverse group of companies with about 70,000 employees and a presence in nearly 60 countries. Based in Wichita, Kan., Koch Industries is involved in refining and chemicals; process and pollution control equipment and technologies; minerals; fertilizers; polymers and fibers; commodity and financial trading and services; and forest and consumer products. Familiar Koch companies’ brands include STAINMASTER® carpet, LYCRA® fiber, Quilted Northern® tissue and Dixie® cups and tabletop products.

Much of Koch Industries' success can be traced to Mr. Koch's interest in and commitment to scientific and social progress, which led to the development and implementation of the Market-Based Management® business philosophy. The concepts and practice of MBM® are described in Mr. Koch’s book, “The Science of Success: How Market-Based Management Built the World’s Largest Private Company,” published in February 2007 by John Wiley & Sons, Inc. Mr. Koch is further developing the theories and expanding the practice of MBM as well as other applications of the science of human action, not only throughout Koch companies, but also with scholars, non-profit leaders, government officials and other business leaders.

He has continuously supported academic and public policy research (including a number of Nobel Prize winners) for more than 40 years, with a special focus on developing voluntary, market-based solutions to social problems. This interest led Mr. Koch to found or help build a number of organizations, including the Institute for Humane Studies, the Cato Institute, the Mercatus Center at George Mason University, the Bill of Rights Institute and the Market-Based Management Institute.

As a reflection of Mr. Koch’s business leadership and community involvement, he has received a number of honors and awards, including:

• Honorary Doctor of Science, from George Mason University
• Honorary Doctor of Laws, from Babson College
• Honorary Doctor of Commerce, from Washburn University
• 2004 President’s Medal, from Wichita State University
• The Entrepreneurial Leadership Award, from the National Foundation for Teaching Entrepreneurship
• The Adam Smith Award, from the American Legislative Exchange Council
• The Brotherhood/Sisterhood Award, from the National Conference of Christians and Jews
• Distinguished Citizen Award, from the Boy Scouts of America
• Spirit of Justice Award, from The Heritage Foundation
• Free Enterprise Award, from The Council for National Policy
• The Tax Foundation’s 2000 National Distinguished Service Award
• The 1999 Directors’ Award for Global Vision in Energy, from the New York Mercantile Exchange
• The Herman W. Lay Memorial Award, from The Association of Private Enterprise Education
• The 1999 Governor’s Arts Patrons Award, from the Kansas Arts Commission
• The Distinguished Service Citation, from the University of Kansas
• Honorary Life Member in the Washburn Law School Association
• Distinguished Citizen Award, from Kansas State University
• Induction into the Kansas Oil and Gas Hall of Fame
• Induction into the Wichita and Kansas Business Halls of Fame
• Spirit of Excellence Award, from The Urban League of Wichita
• Outstanding Humanitarian Award, from the Greater Wichita Chapter of the National Society of Fundraising Executives
• Wichita City Medallion
• Wichita State University Entrepreneur in Residence
• Wichita District Minority Small Business Advocate of the Year
• Individual Recognition Award, from the Wichita/Sedgwick County Arts and Humanities Council
• Uncommon Citizen Award, from the Wichita Chamber of Commerce
• Recognition Award, from Wichita State University Alumni Association

His employment has been as an engineer, Arthur D. Little, Inc. 1959-61; vice president, Koch Engineering Company, Inc. 1961-63, president, 1963-71; president, Koch Industries, Inc. 1966-74; chairman and chief executive officer, 1967- present.

He was born in Wichita, Kansas. Mr. Koch and his wife of 37 years, Liz, have two children.