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Author: Charles G Koch
ISBN/UPC (if available): 9780349414409
In 1961, Charles Koch joined his father's Wichita-based company, then valued at $21 million. Six years later, following his father's death, he was named chairman of the board and CEO of Koch Industries, Inc. Today, Koch Industries' estimated worth is $100 billion - making it one of the largest private companies in the world.
Koch exceeds the S&P 500's five-decade growth by 27-fold, and plans to double its value on average every six years. What exactly does this company do and why is it so remarkably profitable? While you won't find the Koch name on your stain-resistant carpet, stretch denim jeans, the connectors in your smart phone, or your baby's ultra-absorbent diapers, Charles Koch's Market-Based Management system drove these innovations and many more.
Based on five decades of inter-disciplinary studies, experimental discovery, and practical implementation across Koch businesses worldwide, the core objective of MBM is as simple as it is effective: to generate good profit. Good profit results from products and services that customers vote for freely with their dollars; products that help improve people's lives.
It results from a culture where employees are empowered to act entrepreneurially to discover customers' preferences and the best ways to satisfy them. Good profit is the earnings that follow when long term value is created for everyone - customers, employees, shareholders, and society.
Here, drawing on revealing, honest, previously untold stories from his nearly six decades in business, Koch walks the reader step-by-step through the five dimensions of MBM to show how any reader- can apply its framework to generate more good profit in any business, industry, or organization of any size. Readers will learn how to:
* Craft a vision for how a business can thrive in spite of increasingly rapid disruption and ever changing consumer values.
* Acquire and retain a workforce possessing both virtue and talent (the first of which is more important for long term success).
* Create an environment of knowledge sharing similar to a community of scientists - rejecting bureaucracy and hierarchy in favor of a culture that prizes (and even demands) respectful challenges from everyone in the company, at every level.
* Award employees with ownership and decision rights based on their comparative advantages and proven contributions, not job title.
* Motivate all employees to maximize their contributions by effectively structuring incentives so employees' compensation is limited only by the value they create - not budgets or company-wide policy.
A must-read for any leader, entrepreneur, or student, as well as those who want a more civil, fair and prosperous society, Good Profit is destined to rank as one of the greatest management books of all time.
INTRODUCTION: A Win-Win Philosophy
CHAPTER 1: The Glorious Feeling of Accomplishment Life Lessons from My Father
CHAPTER 2: Koch After Fred Building with Stones That Fit
CHAPTER 3: Queens, Factory Girls, and Schumpeter The Incredible (Sometimes Terrifying) Benefits of Creative Destruction
CHAPTER 4: Overcoming Bureaucracy and Stagnation Economic Concepts to Set You Free
CHAPTER 5: Learning from Adversity Koch's Major Failures in Applying MBM
CHAPTER 6: Vision Guide to an Unknown Future
CHAPTER 7: Virtue and Talents Values First
CHAPTER 8: Knowledge Processes Using Information to Produce Results
CHAPTER 9: Decision Rights Property Rights Inside the Organization
CHAPTER 10: Incentives Motivating the Right Behavior
CHAPTER 11: Spontaneous Order in Action Four Case Studies in Market-Based Management
CHAPTER 12: Conclusion The Real Bottom Line
Appendix A: Koch's Major Business Groups
Appendix B: Businesses Koch Has Exited
Appendix C: Products Koch Trades