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

Koch, Charles G.

Rilegato

ISBN 10: 1101904135 ISBN 13: 9781101904138

Casa editrice: Crown Currency, 2015

Riassunto

NEW YORK TIMES BESTSELLER • Learn how to apply the principles of Charles Koch’s revolutionary Market-Based Management® system to generate good profit in your organization, company, and life

“This book helps show you the way to good profit—whether you work for an international supermarket chain, a medium-sized regional business, or your own start-up.”—John Mackey, co-founder and co-CEO, Whole Foods Market
 
The technological innovations, extreme politics, civil unrest, cyber attacks, demographic shifts, and global pandemic that have affected all businesses since this book was published have only confirmed Charles Koch’s belief that “the only reason a business should exist (and the only way it can legitimately survive long term) is to create value in a responsible way.” Hence, the principles in Good Profit are more important today than ever before. 
  
What exactly does Koch Industries, Inc., do and why is it so remarkably profitable? Koch’s name may not be on your home’s plywood, vehicle’s grille, smartphone’s connectors, or baby’s ultra-absorbent diapers but it makes them all. And Koch’s Market-Based Management® (MBM) system is what drives these innovations and many more. 
  
The core objective of MBM is to generate good profit. Good profit results from products and services that customers vote for freely with their dollars. It results from a bottom-up culture where employees are empowered to act entrepreneurially to discover customers’ preferences and the best ways to improve their lives. Drawing on six decades of interdisciplinary studies, experimental discovery, and practical implementation across Koch businesses worldwide, Charles Koch walks the reader through the five dimensions of MBM to show how to apply its framework in any business, industry, or organization of any size. Readers will learn how to: 
  
• Craft a vision for how to thrive in spite of increasingly rapid disruption and ever-changing consumer values 
• Select and retain a workforce possessing both virtue and talent 
• Create an environment of knowledge sharing that prizes respectful challenges from everyone 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 structuring incentives so compensation is limited only by the value they create 
 
A must-read for any leader, entrepreneur, or student, as well as anyone who wants a more civil, fair, and prosperous society, Good Profit is one of the greatest management books of all time.

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Informazioni sull?autore

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 building Koch Industries into the second-largest private company in the nation—currently valued at $100 billion—making him the fourth wealthiest man in America, according to Forbes. Wichita, Kansas-based Koch Industries, Inc. began as Wood River Oil and Refining Co. in 1940. Koch employs more than 100,000 people in about sixty countries worldwide, with 60,000 of those in the United States. Since January 2009, Koch has earned more than 1,000 awards for safety, environmental excellence, community stewardship, innovation, and customer service.

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Chapter 1

The Glorious Feeling of Accomplishment

Life Lessons from My Father

I should regret very much to have you miss the glorious feeling of accomplishment and I know you are not going to let me down. Remember that often adversity is a blessing in disguise and is certainly the greatest character builder.--Fred Koch

"You can tell the Dutch," my father would joke about himself, "but you can't tell them much." Square-jawed, determined, and persistent certainly described Fred Koch, who plunged headfirst into countless ventures--some profitable, some not. His own father, Harry, was also a risk-taker--emigrating as a teenager from the Netherlands with very little money and a head full of stories about America's "Wild West."

Whether their reputation for stubbornness is deserved or not, the Dutch emerged from Spanish rule in 1581 with a thirst for peace, tolerance, knowledge, and new ideas. During the Dutch Golden Age of the seventeenth century, they created the first stock exchange, generated the highest standard of living in the world, excelled in arts and science, and sustained a flourishing culture. The Dutch thrived thanks to freedom and a system of mutual advantage, while their less free European neighbors endured bloodshed and poverty.

Harry Koch arrived in New York as a printer's apprentice and brushed up on his English skills while working at Dutch newspapers in Michigan and Chicago. His work led him to travel down the Mississippi to Louisiana, and then to Trinity, Austin, and Galveston, Texas. In 1891 he followed the railroad to Quanah, where he bought a print shop and struggling weekly newspaper called the Chief. Quanah was in a very poor area, so many of Harry's customers paid, in part, with barter. They valued the news and advertising space his paper offered, and he valued their patronage. In an example of good profit at work, what is now the Tribune-Chief is still published today.

Harry had a thick Dutch accent and pronounced the name "Koch" with a soft, guttural "ch." The West Texan pronunciation sounded more like a crow's "caw." Years later, someone paged my father at a train station and mispronounced his name over the microphone as "Fred Coke." My father had never liked the West Texas version, so he adopted that pronunciation on the spot, thereby making a significant contribution to American phonology.

Fred played varsity football for Quanah's high school, and was an excellent orator and student. He attended the Rice Institute in Houston (an all-scholarship school at that time), where he was elected class president. Always ready to take any risk that might pay off, he transferred to MIT in Cambridge, Massachusetts, upon learning it had created the first-ever chemical engineering program. MIT's tuition at the time was about $300 a year. Before he moved from Texas to Boston, Fred spent the summer mopping decks on a tramp steamer--a merchant ship with no set schedule--sailing between New York and London.

Chemical engineering suited Fred Koch. His bachelor's thesis at MIT addressed environmental issues at a paper mill in Bangor, Maine, which was, coincidentally, later owned by Georgia-Pacific. (GP sold that mill but still owns the Acme gypsum plant near Quanah where my father held a summer job.) The opportunities presented by the Bangor mill--including the profitable recycling of waste products as well as energy conservation, both of which improved the environment--were important to my father and remain important to Koch, because they are mutually beneficial to our company and our communities.

At MIT, Fred, having been taught by his father to box, became captain of the boxing team. While my mother--a golfer, fly fisher, hunter, and jewelry designer--possessed excellent eye-hand coordination, Fred more than got by on his quick reflexes and competitive spirit. He encouraged all four of his sons to develop some boxing skills.

While boxing is one of my favorite Olympic sports, none of us pursued it. My brother Frederick always preferred the arts to athletics, eventually studying humanities at Harvard and drama at Yale. I had some of the most fun of my life playing rugby at MIT on a team that won two championships. My brothers David and Bill joined the MIT basketball team. David became its captain and was a small college all-American. In 1962 he set a record by scoring 41 points in one game--a record he held for forty-six years.

After college, my father got a job with Texaco (then called the Texas Company) as a research chemist at its refinery in Port Arthur, Texas. He then worked briefly as a chemical engineer for the Gasoline Products Company, a leading refinery process development firm in Kansas City.

Fred's big break as an engineer came in 1924, when his MIT classmate, Carl de Ganahl, recommended him for a job designing and constructing a refinery in England owned by de Ganahl's father, Charles. Like the Kochs, the de Ganahls had emigrated from Europe in the 1800s and eventually settled in Texas.

Charles de Ganahl was an amazing person--an outstanding entrepreneur with great integrity and compassion. His mentorship of my father, who was a twenty-four-year-old with very little business experience and even fewer connections, changed Fred's life. My father had tremendous respect for de Ganahl, so much so that he named me after him. That respect was mutual. "Fred Koch is the soundest chemical engineer in the world," de Ganahl wrote years later, "with as brilliant a pair of brain lobes as are worn by any young man of my acquaintance."

My father gravitated toward quality people and genuinely made a good impression on them--whether it was the wealthy de Ganahl family or Sterling Varner, whose father and grandfather were oilfield mule contractors. He didn't care about social status; he treated everyone in a manner consistent with his values. It's probably a reflection of his character that good people wanted to be around him too and offered him opportunities for work.

In 1925, Fred's MIT experience, brilliant lobes, and way with people paid off again. Another former classmate, Dobie Keith, invited him to join an engineering and construction firm in Wichita, Kansas, which Keith had started with Lewis Winkler. Fred accepted, paying $300 to become an equal partner. Three months later, after Keith abruptly left to pursue another opportunity, the Winkler-Koch Engineering Company was formed.

The first two years were rough for Winkler-Koch. Because the firm lacked any proprietary technology or the capital to sell complete jobs (entailing design, equipment purchase, and construction management), small engineering fees were all Winkler-Koch could command. For a while my father was, as he put it, "dead broke" and had to sleep on a cot in the office.

Business improved in 1927 when Fred developed a better thermal cracking process for converting heavy oil into gasoline, one that was less expensive, provided higher yields, and involved less downtime than competitive processes. After a successful installation at L. B. Simmons's new Rock Island refinery in Duncan, Oklahoma, Winkler-Koch sold an average of one new installation every seven weeks for the next two years.

Winkler-Koch's success in selling this process to independent refiners inevitably caught the attention of the major oil companies, who had pooled their gasoline-making processes to control the technology. This combine, dubbed the Patent Club, charged the independents a royalty of 30 cents per barrel at a time when gasoline sold for a little over $3 per barrel (retail).

My father's new process, by contrast, was royalty-free, further enhancing its appeal to independent refiners. In 1929, the Patent Club--worried about the increased competitiveness of independents--filed forty patent infringement suits against Winkler-Koch and almost all its customers. These suits crippled the company's business in the United States and in much of Europe.

Winkler-Koch's survival as a company depended on building plants in other countries--particularly the Soviet Union, where it constructed fifteen cracking units between 1929 and 1931. As a result of that Soviet contract, Winkler-Koch enjoyed its greatest financial success during the early years of the Great Depression. Even so, Fred was very suspicious of the Soviets and demanded 90 percent payment up front.

The Soviet engineers who worked with my father confirmed his fears about doing business in the Soviet Union (and of Communism in general) when they told him about their methods and plans for world revolution. Stalin eventually purged almost all of Fred's Soviet counterparts, along with tens of millions more of his own people. My father described the Soviet Union as "a land of hunger, misery and terror." Because of his experiences there, he became a staunch anticommunist for the rest of his life--even joining the John Birch Society and encouraging me to as well. (I agreed but only stayed for a few years because I felt, like Hayek, that Communism was more of an "intellectual error" than a conspiracy that needed to be exposed.)

The Patent Club spent twenty-three years suing Winkler-Koch but was successful only once. And even that verdict was overturned after it was discovered that a judge had been bribed. This shocking behavior and the resulting scandal caused the majors to donate their process development company, Universal Oil Products, to the American Chemical Society. Winkler-Koch countersued, settling in 1952 for $1.5 million.

Despite winning, my father's advice to me was: "Never sue--the lawyers get a third, the government gets a third and you get your business destroyed." I've tried to follow his advice and have filed very few lawsuits. Unfortunately, he forgot to tell me how to keep from being sued--even by members of my own family. But more on that later.

Dettagli dell?edizione

• Editore: Crown Currency
• Data di pubblicazione: 2015
• Lingua: Inglese
• ISBN 10: 1101904135
• ISBN 13: 9781101904138
• Rilegatura: Copertina rigida
• Numero di pagine: 288
• Contatto del produttore: non disponibile
• Persona responsabile: non disponibile