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 2,000-fold growth since 1967, with today having 80,000 employees in 60 countries and with $90 billion in revenues in 2006. 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. Since then, the company has been transformed into a dynamic and diverse group of companies engaged in refining and chemicals; process equipment and technologies; fibers and polymers; commodity and financial trading; and forest and consumer products. Familiar Koch company brands include STAINMASTER® carpet, LYCRA® spandex, Quilted Northern® tissue, and Dixie® cups.

With $90 billion in revenues, about 80,000 employees and a presence in nearly 60 countries, 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. Mr. Koch is further developing the theories and expanding the practice of the MBM philosophy, as well as other applications of the science of human action, not only throughout Koch Industries, but with scholars, non-profit leaders, government officials and other business leaders.

Koch has continuously supported academic and public policy research (including numerous Nobel Prize winners) for more than 40 years, with a special focus on developing voluntary, market-based solutions to social problems. He has helped build or found a number of market-based 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.

A native of Wichita, Kansas, Koch received a bachelor’s degree in general engineering and two master’s degrees in mechanical and chemical engineering, from the Massachusetts Institute of Technology.

He and his wife of 34 years, Liz, have two children.