Charles G. Koch's The Science Of Success

On November 11, 1959, “Human progress is neither automatic nor inevitable... Every step toward the goal… requires sacrifice, suffering, and struggle; the tireless exertions and passionate concern of dedicated individuals” echoed from Martin Luther King, Jr.’s lips. King spoke not only from an understanding of that which was necessary for his political (Charles G. Koch) intentions, but from a basic understanding of the nature of progress. So too does Charles G. Koch refer to progress as “[coming] through experimentation and failure.”

“The Science of Success” is a book as much about progress as it is about the methods that allowed Koch to transform his fathers business into one of the most influential and powerful franchises in the past half-century.

Koch reveals as much about human nature and the necessity of creation and innovation as he does about business. Since, as George Will claims, “the future has a way of arriving unannounced”, Koch argues, “Businesses must constantly innovate [in order to survive]”. Innovation, which seems a relatively basic and self-explanatory concept, is key to understanding MBM, and as such, Koch goes to great lengths to ensure the proper understanding of the term. Innovation does not simply refer to the creation of the next big product; rather, it refers aspects “throughout all of a company’s business processes.” This definition of innovation includes improvements to all aspects of business, from manufacture, to research, to waste management. Perhaps the clearest foray into human nature comes in Koch’s use of incentives, namely how incentives can backfire on a business due to human nature. Koch argues that although society hopes that people would do the right thing without incentive, properly set incentives, which are not necessarily financial, can persuade both righteous and immoral peoples to produce the desired outcome. As such, incentives, according to Koch, become a powerful tool used for “aligning the interests of a company [with its] constituents.

Koch recognizes, very openly, the potential downfalls of Market Based Management, but does not claim them to be faults of the system itself, rather as result of individuals “misapplying” the system. MBM is a collection of parts, which create the system, which propelled Koch Industries success. Each part, by itself, is not a means to success, but the proper application of all the parts in a responsible and ever-changing manor is what allows the system to provide