Good Profit ─ How Creating Value for Others Built One of the World's Most Successful Companies

A Legendary CEO's Unique Management System

In 1967, Charles Koch took the reins of his father’s company and began the process of growing it from a $21 million company into a global corporation with revenues of about $115 billion, according toForbes.

So how did this MIT engineer manage to grow Koch Industries into one of the largest private companies in the world today with growth exceeding that of the S&P 500 by almost 30-fold over the last five decades? Through his unique five-dimensional management process and system called Market-Based Management. Based on five decades of cross-disciplinary studies, experimental discovery, and practical implementation across Koch companies and their 100,000 employees worldwide, the core objective of Market-Based Management’s framework is as simple as it is effective: to generate good profit.

What is good profit? Good profit results when a company creates value for customers in a way that helps them improve their lives. Good profit is the result of innovations that customers freely vote for with their own dollars; it’s the result of business decisions that create long term value for everyone--customers, employees, shareholders, and society.

While you won't find the Koch Industries name on your home’s stain-resistant carpet, your baby’s more comfortable but absorbent diapers, your stretch denim jeans, or your television with a better clarity screen, MBM? drove these innovations and many more.

Here, drawing on revealing, honest stories from his five decades in business – the company’s many successes as well as its stumbles – Koch walks the reader step-by-step through the five dimensions of Market-Based Management to show stockholders, entrepreneurs, leaders, students -- and innovators, supervisors and employees of all kinds, in any field --how to apply the principles to generate Good Profit in their organizations, companies, and lives.

Charles G. Koch is chairman of the board and CEO of Koch Industries, Inc., a position he has held since 1967. He is renowned for growing Koch Industries from just $21 million in the early 1960s to its current revenues of about $115 billion according toForbes. He is ranked fourth on Forbes’ list of America’s richest people. He has continuously supported academic and public policy research (including many Nobel Prize winners) for more than 50 years, and has helped build a number of organizations focused on research, policy and education to advance the understanding of the free society. These include the Cato Institute, the Institute for Humane Studies and the Mercatus Center. He supports numerous nonprofits through the Charles Koch Foundation and the Charles Koch Institute, including an organization called Youth Entrepreneurs, which teaches at-risk high school students the values and skills they need to succeed in life. The Charles Koch Foundation supports more than 250 colleges and universities for more than 400 research and education programs. As a reflection of Mr. Koch’s business leadership and community involvement, he has received numerous honors and awards including several for philanthropic leadership, entrepreneurial leadership and distinguished citizenship. He holds a bachelor’s degree in general engineering as well as two master’s degrees in nuclear and chemical engineering from MIT. He has been married to his wife, Liz, for 43 years. They have two children and two grandchildren.

Based in Wichita, Kansas, Koch Industries, Inc. is one of the largest private companies in America with annual revenues of about $115 billion, according toForbes. It owns a diverse group of companies involved in refining, chemicals, grain processing and biofuels; forest and consumer products; fertilizers; polymers and fibers; process and pollution control equipment and technologies; electronic components; commodity trading; minerals; energy; ranching; glass; and investments. Since 2003, Koch companies have invested more than $70 billion in acquisitions and other capital expenditures. With a presence in about 60 countries, Koch companies employ more than 100,000 people worldwide, with about 60,000 of those in the United States. From January 2009 to present, Koch companies have earned more than 930 awards for safety, environmental excellence, community stewardship, innovation, and customer service.