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

by Charles Koch

January 17, 2021 — January 18, 2021

Los Angeles, CA

I’m not a fan of the Koch Brothers for their hardcore capitalistic approach to using their billions to negatively influence the political system and urban planning throughout America. Now that I’ve made that clear, let me begin reviewing the book, without a bias towards the author and just reviewing the book for what it is: mediocre. I picked up this book spontaneously because I wanted to read a business management book since I haven’t read one in a while. It’s a short book that’s packed with a lot of lessons, however, the variety and extent of what you’ll learn are limited and a majority of the concepts about the market and business management are “basic” (subjective statement).

Koch divides Market Based Management (MBM) into five dimensions, each being discussed in its own chapter with three of Koch’s favorite quotes about the topic: vision, virtue and talents, knowledge processes, decision rights, and incentives. He emphasizes that a vision needs to be based on what will create a maximized long-term value, willing to embrace change, and have priorities set. The combination of virtue and talent to have the right people. Knowledge processes present different examples of intelligence and how people gain different types of knowledge, as well as, how profit is measured and tracked. Decision rights are ensuring the right people are in the right roles with the right authorities for the company to make the right decisions. Incentives are the rewards people gain when creating value for the company. Again, if you’ve read business books before, this is what every basic business book written by a billionaire looks like or the first semester of sophomore year, or a beginner’s course on a MOOC. I’d recommend you read Principles by Ray Dalio instead if you want to be enlightened.

There are a few points that I found particularly interesting when Koch compares decision rights to property rights, as people take better care of things they own due to being accountable to their property and directly impacted by it.

• Visionaries

  • Jeff Bezos

  • Oprah Winfrey

  • Sir Richard Branson

• Builders

  • Robert F. Smith

  • Jamie Dimon

• Transformers

  • Eric Schmidt

  • Ginni Rometty

  • Indira Nooyi

• Commanders

  • Condoleezza Rice

• Decision-Makers

  • Nancy Pelosi

  • Christine Lagard

• Masters

  • Jack Nicklaus

  • Mike “Coach K” Krzyzewski

  • Yo-Yo Ma