“We…look at business through a win-win mind-set, which was the guiding philosophy behind the MBM® framework we began to develop in the mid-1960s. This framework has enabled Koch to grow tremendously; indeed, it was essential to turning a company valued at $21 million in 1961 into one valued at $100 billion in 2014.”
The Revolutionary Management System Behind One of the Most Successful Companies of Our Time
Legendary CEO Charles Koch shows managers, entrepreneurs, leaders, students, innovators, and employees of all kinds — and in any field — how to apply the principles of his revolutionary Market-Based Management® system to generate good profit in their organizations, companies, and lives.
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 the company. 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? Koch’s name may not be on your stain-resistant carpet, stretch denim jeans, the connectors in your smart phone, or your baby’s ultra-absorbent diapers, but it makes all of them. And Charles Koch’s Market-Based Management® system is what drives innovations like these – and many more.
Based on five decades of interdisciplinary 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, and 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.
- Select 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.

About the Author
Charles 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 estimated value of $100 billion. Mr. Koch has supported academic and public policy research (including many Nobel Prize winners) for more than 50 years, and helped build a number of organizations focused on research, policy, and education to advance the understanding of the free society, including 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 provides funding for more than 400 research and education programs at about 250 colleges and universities.
Mr. Koch holds a bachelor’s degree in general engineering as well as two master’s degrees in nuclear and chemical engineering from MIT. He and his wife Liz have been married 43 years. They have two children and two grandchildren.
Praise
The Glorious Feeling of Accomplishment
At the core of Good Profit is the story of a young man who strived to achieve the success that his father had wished for him, through a disciplined approach to business and life.

The Five Dimensions

MBM® Guiding Principles

A Letter From Fred
News
About Koch
Wichita, Kansas-based Koch Industries, Inc. began as Wood River Oil & Refining Co. in 1940. Koch Industries’ estimated worth is $100 billion — making it one of the largest private companies in the world. With a presence in more than 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 1,000 awards for safety, environmental excellence, community stewardship, innovation, and customer service.