Read The Science of Success: How Market-Based Management Built the World's Largest Private Company by Charles G. Koch Online

the-science-of-success-how-market-based-management-built-the-world-s-largest-private-company

Praise for THE SCIENCE OF SUCCESS "Evaluating the success of an individual or company is a lot like judging a trapper by his pelts. Charles Koch has a lot of pelts. He has built Koch Industries into the world's largest privately held company, and this book is an insider's guide to how he did it. Koch has studied how markets work for decades, and his commitment to pass thatPraise for THE SCIENCE OF SUCCESS "Evaluating the success of an individual or company is a lot like judging a trapper by his pelts. Charles Koch has a lot of pelts. He has built Koch Industries into the world's largest privately held company, and this book is an insider's guide to how he did it. Koch has studied how markets work for decades, and his commitment to pass that knowledge on will inspire entrepreneurs for generations to come." --T. Boone Pickens"A must-read for entrepreneurs and corporate executives that is also applicable to the wider world. MBM is an invaluable tool for engendering excellence for all groups, from families to nonprofit entities. Government leaders could avoid policy failures by heeding the science of human behavior." --Richard L. Sharp, Chairman, CarMax"My father, Sam Walton, stressed the importance of fundamental principles--such as humility, integrity, respect, and creating value--that are the foundation for success. No one makes a better case for these principles than Charles Koch." --Rob Walton, Chairman, Wal-Mart"What accounts for Koch Industries' spectacular success? Charles Koch calls it Market-Based Management: a vision that nurtures personal qualities of humility and integrity that build trust and the confidence to enhance future success through learning from failure, and a culture of thinking in terms of opportunity cost and comparative advantage for all employees." --Vernon Smith, 2002 Nobel laureate in economics"In a very thoughtful, creative, and understandable way, Charles Koch explains how he has used the science of human behavior to create a culture that has produced one of the world's largest and most successful private companies. A must-read for anyone interested in creating value." --William B. Harrison Jr., Former Chairman and CEO, JPMorgan Chase & Co."The same exacting thought, rooted in the realities of human nature, that the framers of the U.S. Constitution put into building a nation of entrepreneurs, Charles Koch has framed to build an enduring company of entrepreneurs--a company larger than Microsoft, Dell, HP, and other giants. Every entrepreneur should study this book." --Verne Harnish, founder, Young Entrepreneurs' Organization, author of Mastering the Rockefeller Habits, CEO, Gazelles Inc....

Title : The Science of Success: How Market-Based Management Built the World's Largest Private Company
Author :
Rating :
ISBN : 9780470139882
Format Type : Hardcover
Number of Pages : 208 Pages
Status : Available For Download
Last checked : 21 Minutes ago!

The Science of Success: How Market-Based Management Built the World's Largest Private Company Reviews

  • John
    2018-12-07 12:10

    Disclosure: I have done business with Koch Industries for over 30 years. The copy of this book was given to me by a Koch employee. It is the only publication by Cnarles Koch I have ever read.Forget all the vituperative broadsides against the Koch brothers, the accusations of their funding the Tea Party, the cover story on Bloomberg Markets, Charles Koch is a genius when it comes to business. He had to have something going for him to plough through undergraduate and post-graduate courses at MIT and to build the Company bequeathed to him into the largest privately held concern in the world. What is most refreshing about this book is its candid admission of his own mistakes, missteps and lessons learned. Too many business bios adapt the Donald Trump style swagger, the Here's How I Triumphed in the face of incredible odds and became a titan. What Charles Koch does in this book is chronicle his business career, how he built his company, who he trusted, how he motivated his employees. In the back section of the book, he provides an appendix of the businesses that Koch is involved in but an even longer summary of the businesses that Koch has exited. He continually harkens back to examples which highlight the simple principles of integrity, honesty and fairness. While many out there today may not care for Charles Koch's politics and convictions, he deserves the right to vote his conscience and expound his philosophy alongside other philanthropists from across the aisle like George Soros. But again, read this book only if you are willing to ignore politics and can focus on business and personal advice.

  • Scott Fabel
    2018-12-08 09:17

    A few weeks ago, I had the opportunity to do some consulting for one of the Koch Industries companies, Invista. I taught a course at its Wilmington, DE facility and then again at its headquarters in Wichita, KS. I was struck by the incredible ways in which the employees treated me--and each other! While in Wichita, I learned a lot more about Koch Industries and its business philosophy. I happened to visit the company story while in Wichita, and I saw that the CEO had written this book. I knew that I had to read it to learn more about how he built the company and how he inspires his employees. What I read was nothing short of astounding. Koch Industries should be a role model for other companies.This book starts by providing a bit of history about how Koch Industries has become the largest privately held company in the United States in terms of revenue. It's no surprise that this was achieved through the implementation of the company's Market-Based Management (MBM) philosophy. The book goes on to describe MBM in great detail. Personally, I had been exposed to only one aspect of MBM during my time at Invista: the Guiding Principles. There are ten Guiding Principles in MBM, and I was introduced to them because they are printed on all of the coffee cups in the corporate office in Wichita--what a great idea! The ten Guiding Principles are 1) Integrity, 2) Compliance, 3) Value Creation, 4) Principled Entrepreneurship, 5) Customer Focus, 6) Knowledge, 7) Change, 8) Humility (a personal favorite), 9) Respect, and 10) Fulfillment. These Guiding Principles are described in the book, yet they make up only one part of the overall MBM philosophy. The other aspects of MBM include Vision, Virtue and Talents, Knowledge Processes, Decision Rights, and Incentives. Each aspect of MBM is described in this book, and examples are provided throughout. While I wouldn't say that this book is prescriptive (i.e., it doesn't tell you how to run a business), I would say that it provides a very valuable set of tools that can be used to improve any business. If you like business books, then this book needs to be read--and frequently referenced. You will really enjoy it!

  • Cliff
    2018-11-16 09:57

    This book was interesting and clearly had good ideas. But like most business books, I found it maddeningly vague. Maybe it's the lawyer in me that wants careful definitions of everything, even when they are unwise or impossible. But I still feel like I am missing something when I read most business type books. This is no exception. That said, his holistic approach to business largely makes sense and has clearly worked well.

  • Jasonlylescampbell
    2018-11-15 12:03

    I borrowed this book from a friend because I have been looking into many private companies. Koch Industries is the largest private company in the world.First of all, I really enjoy books that seem to be working with general wisdom, applicable to any sector of society or society at large. I have enjoyed the Jim Collins books for that reason but I really liked Koch’s idea of studying history, economics, philosophy and more to develop his ideas of building a strong company. Actually Michael Polanyi, the philosopher/chemist he mentions a number of times, is an thinker that I have encountered a number of times in reading theology and missialogy as well as some of the Chicago economics. The basic solution of maximizing long-term profitability by creating real value in society, what he calls principled entrepreneurship, is the kind of sound thinking of any great company. He went on to talk about foundational societal building blocks that are more and more difficult to find and ensure like virtue, trust, humility, openness to challenge, etc. While these are what in the long-term carry individuals and corporations through to real value, they do not always bring immediate success. I thought the most interesting chapters and the ones I think CD Group has really gone a long way to try and build were on Decision Rights (Roles, Responsibilities & Expectations) and the Knowledge Process. The idea of really building ownership into the employees, so they always see that within their role there is set responsibilities and expectations, true ownership where they can achieve real progress and contribute. He says that R,R&E within the company should be like property rights within society. Throughout the book he tried to make the point that all parties bring unique abilities that can contribute to overall profit if they are willing to work together in humility in the free markets creative destruction. The idea of seeing the company as responsible for piecing together a giant jigsaw puzzle, all working together in a decentralized way within site of one another was very interesting as well.That said, the book was so simple and matter of fact that it was hard to believe that Koch Industries has achieved this among their 80,000 employees. It made me want to read articles about them to see how they fare on putting all this to work throughout the organization.

  • Kent Say
    2018-11-23 14:07

    Interesting, obviously coming from a highly successful and thoughtful man. If you are looking for evidence of a crazy man that doesn't share the values of most Americans trying to subvert our form of government through a covert takeover of the republican party there are other books that cover that topic. Why can't he be both?Not enough meet here to be able to actually draw that many useful things from a management perspective.

  • Tony Hsieh
    2018-11-28 10:55

    fast read, not super well written, but the concepts presented in the book are great

  • Amy
    2018-11-25 12:57

    A fast read but a good one. It is easy to understand and filled with helpful principles. I'm looking forward to learning more about it. What they do at KII works and I have seen how Charles Koch's Market-Based Management transfers over to the non-profit. It really creates an exceptional environment to work in.

  • Nick
    2018-11-25 13:05

    I had the privilege of hearing Charles Koch speak at a conference and regardless what you think of his politics, he’s brilliant. I met his head of innovation on separate occasion and she told me about MBM and I wanted to learn more. Unfortunately this book is too high-level. Compared to Ray Dalio’s step-by-step “Principles”, this book falls short of being practical. I am grateful for reading it though as it introduced me to Michael Polanyi’s work.

  • Matthew Nguyen
    2018-12-06 13:54

    I find it a really good book. I actually read this book while taking an organization communication class and a lot of the theories and methods of communication is in this book. Koch actually takes these theories and innovates them to fit the need of his business. The best thing though about it is that it doesn't just apply to business, it can be also be applied to yourself. Definitely worth a read.

  • Gabriella Hoffman
    2018-11-15 13:00

    A great read into understanding why a market-based economy is the supreme economic system in the world. Some times it was dense and terse, but chalk full of great things to takeaway for any young entrepreneur.

  • Chris Ouyang
    2018-11-17 07:13

    Upon writing this review, Koch Industries is actually the US's second largest private company, behind Cargill. Like Cargill, most people have no idea what Charles G. Koch's Koch Industries does. However, Koch Industries is, perhaps, the world's most maligned private company; whether that's entirely justified or wholly not depends on who you ask. Regardless, it is living, breathing evidence of the successful business philosophy detailed within The Science of Success: How Market-Based Management Built the World's Largest Private Company (SOS).For full disclosure, I actually read this book before my internship with Koch Industries began; it was handed out for free during an intern welcome weekend, and my copy has been signed by Mr. Koch (within Koch, Charles Koch will always be referred to as Mr. Koch). Not only did I read this book thoroughly for the purpose of understanding the corporate culture that I would be joining that summer of 2013, I listened to Mr. Koch himself speak on SOS's topics candidly, without notes, in person.The book introduces the different dimensions of Market Based Management, which is Koch Industries' scientific method to running a successful business. I strongly remember certain themes: Have a vision for your firm, align the incentives of each and every employee, and know who has the right to make what decision. "Creative destruction" was also of interest.What Science of Success really introduces is the jargon of business. Gone are enthalpy constants, drill bit rates of penetration, and other engineering terms I grew to hate anyway. However, the same engineering-stereotype-problem-solving approach, characterized by Mr. Koch's MIT engineering education, permeates SOS, along with strong doses of learned humanities and economics. If college students are exceptional at name-dropping the places they studied abroad, Mr. Koch is borderline divine at quoting literary works, which showed during his speech and in SOS. Eventually, I learned the phrases, "create value" and other business lingo are not unique to Koch Industries, though mentioned a plethora of times in SOS. Every firm has their own company culture, but for a company with tens of thousands of employees, you'd be hard pressed to find a company culture as codified as Koch Industries; it is laid out, chapter by chapter, in SOS. Some parts of the book are challenging to synthesize. Also, it's doubtful, in my mind, that Mr. Koch was as deliberate in decision-making throughout the entire history of Koch Industries as SOS wishes he was. That being said, SOS is a synthesis of business philosophy, not necessarily a perfect account of business success. It reads as an informative text, too, with some story elements, and can be slow at times.All in all, this book is excellent for people who want to understand what drives a business, and at a more intrinsic level, what drives people. But, its academic approach and subject matter, and also the wary eye doubters keep on Mr. Koch and his capital-heavy ventures--refining, extractive minerals, fertilizer, pulp and paper--may cause one to pass on this book.

  • Robert
    2018-12-04 10:01

    As Charles G. Koch explains in the Preface to this book, Market-Based Management® (MBR®) has enabled Koch Industries, Inc. (KII) to become one of the largest and most successful companies in the world, with a 2,000 fold growth since 1967, now employing 80,000 people in 60 countries, with $90-billion in revenue in 2006. MBR consists of five dimensions: vision, virtue and talents, knowledge processes, decision rights, and incentives. No surprises there, nor are there any head-snapping revelations throughout Koch's narrative. The great value of the material, rather, is derived from the clarity with which Koch explains each of the interdependent, mutually reinforcing core concepts, and, by how skillfully he illustrates them in real-world situations while examining the evolution of KII. Based on the Science of Human Action, these core concepts are relevant to any organization, regardless of size or nature. There are no head-snapping revelations in this book, nor does Koch claim to offer any, and these questions offer a case in point. Of course, these are questions which decision-makers in all organizations should ask every day. In fact, few do...and even fewer obtain or provide correct answers. As explained by Koch, MBM is all about "blocking and tackling" effectively in business...and in life...in order to succeed. I especially appreciate Koch's skillful use of a reader-friendly device throughout the text that features relevant information within a boxed, pale blue background. For example, quotations, brief explanations, definitions, and graphics. Beyond its visual appeal, this device serves two practical purposes: it highlights key points, and, it facilitates periodic review of them later. The material of greatest interest to me is provided in the last chapter, "Lessons Learned." It is important to keep in mind that Koch has obviously learned a great about business and about life during his central involvement in the evolution of his company. However, he also learned a great deal from his exploration of remarkably eclectic sources that are indicated in the Notes and Bibliography sections. In the final chapter, he shares what he has learned about "the science of success," hence the title of this book. It is possible, Koch notes, that people will gain a conceptual or professional understanding of MBM but lack sufficient personal knowledge and experience. As a result, they tend to misapply it. To be successful, MBM requires a culture of what Koch characterizes as "principled entrepreneurship, "one in which everyone is engaged in a passionate pursuit of innovation "toward an unknown future of ever-greater value creation." Moreover, innovation only thrives within a system of discovery, "of spontaneous order, of mutually adjusting individual initiatives."

  • Deane Barker
    2018-12-09 07:54

    This is a fairly awful book. I didn't disagree with anything Koch wrote, but the problem is that (1) he's a poor writer, and (2) he's not saying anything profound.His writing just careens back and forth between points. I was trying to highlight the book and take notes, but it just defies logical organization. The chapter titles don't clearly match the contents, and he vacillates wildly between topics.Additionally, even if it the book made sense, he's just not saying anything profound or interesting. The book reads like a Intro to Business 101 course. His chapter on incentives, for instance (arguably the most clearly written chapter), simply explains that people perform best when they're incentivized to do something the organization needs. Okay...how is this not something we all intuitively know?Koch makes much of this "Market Based Management" moniker (to the point where he's apparently trademarked it). I think it should be titled "Reality Based Management," because his point is that "this is how reality works, deal with it."The book is quite short -- you can read it in two hours, tops. And I think the over-arching point is valid: humans beings are largely rational creatures who respond in predictable ways. The "science" of the title is the idea that we can examine these responses and craft strategies to profit from them.But that's about it. Perhaps read it as a look into the mind of Charles Koch, if you want to learn more about him. But don't look to this as a serious business book.

  • Christopher Lewis Kozoriz
    2018-11-15 08:12

    "Chemist and philosopher of science Michael Polanyi argued that we only truly know something-that is, have personal knowledge-when we apply it to get results." ~ Charles G. Koch, The Science of Success, Page 41.Charles Koch currently has a net worth of 43.4 billion dollars. He is currently the 9th richest person in the world according to Forbes (April 19, 2016).This was kind of tough book to read. I was thinking that was because Charles Koch was educated in Engineering and his philosophy seems kind of technical, meaning it did not flow like a regular book would. However, his philosophy about MBM (Market Based Management) was interesting.Charles Koch shares that MBM is applied through five dimensions:VISIONDetermining where and how the organization can create the greatest long-term valueVIRTUE AND TALENTSHelping ensure that people with the right values, skills and capabilities are hired, retained and developedKNOWLEDGE PROCESSESCreating, acquiring, sharing and applying relevant knowledge, and measuring and tracking profitabilityDECISION RIGHTSEnsuring the right people are in the right roles with the right authorities to make decisions and holding them accountableINCENTIVESRewarding people according to the value they create for the organization (p. 26) This is a book I believe you will require to go back and read again and again to get a deeper understanding of the philosophy of MBM.

  • Jay
    2018-12-02 15:06

    I was hoping to get a little out of the history of Koch Industries, and the beginning of the book does talk about this. Koch describes how the company began and grew, how he and his relatives think, and how they ran the businesses in the various industries they are involved in. I found this an excellent set of stories, and you can get an idea of how the Koch's think. I'd give this part 3 or 4 stars. The majority of the book describes the philosophy of how Koch runs their businesses now. I didn't perceive that this was a science, instead this is a practical approach based on experience. It is more what you'd expect from an engineer than a scientist. That's the voice the book is written in -- the voice of an engineer. While there is certainly more to the book than this, the two concepts that are driven home again and again are to allow your employees to do their best work, and to reward them for the gains they make your company. This summation could have been put on a business card (and probably has been). There are also politics involved, but as I recall the stories were more along the libertarian vein than anything else, and didn't strike me as heavy handed. This management section felt similar to others I have read, so I would consider this just 2 stars. I averaged up to 3. I look forward to reading more about the Kochs and how they have succeeded and failed with their businesses - that seems to be the real story.

  • Tadas Talaikis
    2018-12-08 09:09

    Neoconservative provides F.Hayek quotes and then next chapter glorifying meritocracy. Hereditary meritocracy in this case."People should profit according to what value they provide in society." It's ok, but problem with Tea-party meritocracy system ultra-capitalists is that they miss one major thing, value isn't always determined by monetary value.Not including the praise for "honesty", when anyone can search internet and see the true reality of such "value creation not by political means"."Whole, not parts", well, when you see whole then you can see that creating more results in more damage to environment and as a consequence - people, means making more is equal to less value.Similarly, growing inherited meritocracy [monetary] "value" has diminishing returns, but increasing capital returns, thus creating damage to entire economy, i.e. people who have lower "value".Not including this book has no science mentioned whatsoever. Another case for hypocrisy. We say it, but say it half-word. Damn such Harperism "science". Not including there is nothing said how that company was really created, just abstract B.S.

  • Jeffrey Howard
    2018-11-17 09:02

    Charles outlines Market-based Management, a proven process for taking the principles that lead to prosperity in society, and has applied them to organizations in a way that gets results.Despite being business buzzword heavy, he outlines a holistic approach to management, consistent with the freedom philosophy. Praiseworthy businesses exist to provide services and goods which create value for individuals and society. Those organizations which fail to do this in the long-term, disappear. (If only the parts of government that fail to create long-term value for society were so easily replaced by superior forms of innovation.)The Science of Success can become redundant, but the repetition can really help one understand this holistic philosophy whose principles reinforce each other.Regardless of your perspective on liberty, it is hard to ignore a philosophy which has guided the vision of the world's largest private company for over 40 years.

  • David Greenberg
    2018-11-22 08:55

    Deane's review hits the nail on the head, so I will not try to rehash her critique. This book provides an interesting story on how Charles Koch used his knowledge of free market economics to perfect a business method. That story is worth the read. It is only the introduction. Afterwards is the system itself. As any free market economist would tell you—including most quoted in the book—systems are imperfect. The system he proposes is like nearly every other business practice book I've read, and is nearly identical to the "LeaderShape" training system (of which I am an alumnus).With that said, the book does have a purpose. Libertarians and Conservatives interested in good business practices who are well read in free market economics will find this book is a nice bridge. It is not the end of the journey into understanding management. It is only the beginning.

  • Marci
    2018-11-24 14:11

    My company gave me this book and we actually had "book club" at work where we discussed the principles this book discusses and how to effectively use those approaches in our respective areas. I worked in one of the companies that Charles Koch built using these ideas. I found this book to be encouraging and helpful as I made the decision to go back to school full time for my career focus shift to biomedical engineering. This book really explains the philosophies that Koch Industries adheres to and the events both good and bad that have shaped this company. I highly recommend reading this book! It truely supports freedom of thought, freedom of choice, entrepreneurship, and the value diverse individuals contribute to improving our society. This book really influenced my thoughts and my value system.

  • James
    2018-12-15 11:52

    Given all the negative press surrounding the Koch brothers, this book is not controversial. The author presents his philosophy on why companies should exist and to what end. What surprised me is that in several places he mentions maximizing a company's and a person's contributions to society, along with strict adherence to regulations. Those beliefs, coupled with the way that Koch Industries evaluates their employees and business opportunities, seem to reveal an open mindedness to the way that a business should be run that does not get reflected in the media. Anyone with motivation and desire to succeed would want to work for a company with the characteristics described in the book, if they are truly followed in practice within Koch Industries.

  • Ben Walker
    2018-12-04 14:53

    I skimmed all of it, and read a few portions. It's a fine introductory management book. The problem is, most management books are (almost entirely) common sense, so there's little to be gleaned from them. The primary purpose of this book actually seems to be for stroking his ego (e.g. quotes from Einstein and other notables from incongruous fields). I would say his success is more about getting lucky (born to the right family), but he wants to chalk it up to intellect or a management system. I did like his section on incentives, as I think that's pretty important. But again, it's not that unique. His section on decision rights was interesting -- it's a shame he mentions tragedy of the commons then doesn't apply it to his own carbon-intense commodities.

  • loafingcactus
    2018-12-15 10:57

    I'm not sure how anyone can claim to have read the book without politics, as the introduction explains the book as a comment on the political experience of the firm. The lesson that is supposed to be learned here, per the introduction, is that a dilettante in the humanities can take whatever information was swept together in some undergraduate reading, apply it to business, and circle back to sound humanistic conclusions. Why that is a disaster should not require any head scratching. Meanwhile, it is of limited value as a business book as well, trotting out the foundational principles one would find in any introductory textbook of management.

  • Michael Graber
    2018-12-14 15:08

    The Science of Success is more of a book of business philosophy rather than a book of hard science. In this spirit, Charles Koch outlines the principles of Market-Based Management, which is an inspired Free Market world view that empowers managers and employees to add and create value, live up to their highest self, and run companies on both hard and soft metrics. Business owners and leaders should read. Despite the distorted view of this work in the media, it is deeply sensible and offers the most responsible path to run companies that make sense for the world and planet.

  • Frode
    2018-12-15 12:56

    Kock is CEO of the world's largest private company in the world, Koch Industries. The book is about market based management and how its application has grown KII. A $1000 investment in KII in 1960 would be worth 2 million today (2006) assuming reinvestment of dividends. Obviously Koch is onto something. The book is both technical and general. It gives general direction but little in the way of specifics, which is by design. Although short, the book is packed and requires thinking.

  • Joshua
    2018-11-29 10:58

    Conceptually (and for Mr. Koch, practically) this book is full of though processes, mind models, values, and ideas that could, if applied across organizations, increase company effectiveness, not just profits. That being said, for a non-economist, it can be a hard read, especially when getting into some of the formulaic ideas. Other than that, there is enough personalized story and practical application to make the book worth the read.

  • Rob
    2018-12-05 14:04

    Read for Certificate in Management for Technical Professionals course. Koch takes a more classic approach to business grounded in the Science of Human Action. I found chapter 1 unnecessary and uninteresting but it begins to pick up in chapter 2 and takes off in chapter 3. It would be interesting to work for Koch Industries and see this approach first hand. There are many forward thinking but classic ideas presented here.

  • Mike Thoennes
    2018-12-11 12:01

    If you believe in the Free Market principles of prosperity and value creation, then this is a book to read and understand. I appreciate that Charles Koch has made a study of free market mechanics and brought it together in a fast read to challenge and inform my thinking. To really get to the gist, you will need to go to the original works behind this summation, but this is a gate way to prosperity thinking. A valuable read.

  • David
    2018-12-10 12:02

    Very, very interesting attempt by Koch Industries CEO to explain the management processes that have made the company grow and prosper. Would like to have had this book written 20-25 years ago -- could have put it to use in a prior incarnation. Also would like to see a follow-up (it's eight years old) on how the management style/philosophy is seen by company insiders.

  • Sean
    2018-12-11 12:13

    I am a Libertarian, so I am partial to the brothers Koch. I am a businessman, so I am interested in the insights of successful businessmen. I am a reader, so I am a sucker for short management books.This one is a little different in that it advocates a more systemic approach. But it is, in the end, a short management book.

  • Adam Naujock
    2018-11-28 10:56

    Philosophical Business bookOverall a good business management book, heavy on the theory and philosophy. Only 4 stars because I couldn't quite think of it as an instant classic, but I would recommend it because it opened me up to a new way of looking at the genre. I'm going to read some of the works cited in the bibliography/appendix because it lists many good resources.