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Wednesday 27 January 2016

Steve Daley presents the key to Koch Industries' success to ESCP Europe students

Market-Based Management®: the Key to Koch Industries' Success: A 'Meet the Experts @ ESCP Europe' Guest Lecture

For a 'Meet the Experts' series talk at ESCP Europe Business School in London, Steve Daley, President of Market-Based Management at Koch Industries, gave a lecture on 'How Market-Based Management® built Koch Industries into one of the world's most successful companies'. 

The talk was part of ESCP Europe's efforts to introduce students to a broad range of management practices. The lecture was attended by students from the School's Master in Management, Master in European Business, MSc in Energy Management, and new undergraduate Bachelor in Management (BSc) programmes.

In a packed theatre, Mr Daley talked about Koch Industries' Market-Based Management® philosophy and how the company applies MBM® across the board – worldwide and in all sectors of operation from oil refining to consumer products, polymers and electronic connectors.

Koch Industries attributes its success and growth to the application of MBM®.  An investment of $1,000 in Koch Industries in 1960 would have a book value of €5 million today – which is 27 times more than what an investment in the S&P 500 would have achieved.

Present in 60 countries with 100,000 employees and annual revenues of $155 billion, according to Forbes Magazine, Koch Industries is the second largest privately held company in the U.S. If its shares were publicly traded, it would be in Fortune's Top 20.

MBM® was developed by Charles Koch, Chairman of the Board and CEO, and is structured around five dimensions:

  • Vision: Determining where and how the organisation can create the greatest long-term value
  • Virtue and Talents: Helping ensure that people with the right values, skills and capabilities are hired, retained and developed
  • Knowledge Processes: Creating, acquiring, sharing and applying relevant knowledge, and measuring and tracking profitability
  • Decision Rights: Ensuring the right people are in the right roles with the right authority to make decisions and holding them accountable
  • Incentives: Rewarding people according to the value they create for the organisation

The students enjoyed having a prestigious speaker at the campus and appreciated the introduction of new subjects, such as the concept of "good profit" – which also is the title of a recent management book by Charles Koch.

Master in Management student Xinran Yi said: "He gave a fresh view, coming from a private company, with its distinctive advantages over public-trade corporations ... when confronted with sharp questions, he showed us how a company that is present in several industries deals with social responsibilities."

ESCP Europe's UK Director Professor Simon Mercado said: "Many of our professors adopt elements of Market-Based Management in their lectures.  It has been a great privilege to hear first-hand from the man who leads Koch Industries' worldwide MBM activity."

The 'Meet the Experts' lecture series at ESCP Europe brings business leaders, industry specialists and entrepreneurs to the business school's campus in north London for a range of talks, panel discussions and conferences.

To view photos from the event, please click here

Press Contact:

Shireen Fraser, Head of PR, UK / +44 (0)20 7443 8833

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