The Science of Success: How Market-Based Management Built the World’s Largest Private Company
by Charles G. Koch
CEO, Koch Industries, Inc.
Koch Industries has grown 2,200 fold over the past 40 years and is the world’s largest privately held firm. The NAM-member company produces some of the world’s most recognizable products, including STAINMASTER carpet, Dixie cups and Quilted Northern tissues, among its many product lines. Those distinctions alone would earn Charles G. Koch’s book, The Science of Success, a prominent spot on the recommended reading list for executives.
But what makes The Science of Success so compelling is that Koch introduces the reader to a remarkable business philosophy, Market-Based Management ®, or MBM, that engages Koch employees in “a passionate pursuit of innovation toward an unknown future of ever-greater value generation.”
MBM, as a business philosophy, embraces those timeless principles that allow a free-market society to achieve prosperity and societal progress, and applies them within the context of an organization and its mission. Though Koch focuses on how MBM has been applied within his company, he is quick to point out that it is equally applicable at institutions ranging from non-profit organizations to government agencies.
By relentlessly applying MBM, Koch Industries avoids the natural tendency toward complacency that can accompany financial success. “MBM teaches that we must continually drive constructive change in every aspect of our company or we will fail. As a result, we continually pursue innovations and opportunities through internal and external development and acquisition.”
This book is not a self-congratulatory memoir. The author candidly describes instances in which the company did not apply MBM effectively. He lists not only the firm’s major business groups, but also the many businesses Koch has exited because it found higher-valued alternatives for its resources, be they raw materials, corporate assets or human talent.
While MBM is a weighty topic, the The Science of Success reads quickly and easily, with great insight for the reader. We recommend the book highly.