Guiding Principles

Market-Based Management® requires a culture centered on specific characteristics. These attributes set the standards for evaluating policies, practices and conduct, establishing norms of behavior, and building the shared values that guide individual actions. The guiding principles articulate rules of just conduct along with values and beliefs.

The guiding principles are:

  1. Integrity
    Conduct all affairs with integrity, for which courage is the foundation. Honor donor intent.
  2. Compliance
    Strive for 10,000% compliance with all laws and regulations, which requires 100% of employees fully complying 100% of the time. Stop, think, and ask.
  3. Value creation
    Contribute to societal well-being by advancing the ideas, values, policies, and practices of free societies. Understand, develop, and apply Market-Based Management to achieve superior results by making better decisions, eliminating waste, optimizing, and innovating.
  4. Principled entrepreneurship™
    Apply the judgment, responsibility, initiative, economic and critical thinking skills, and sense of urgency necessary to generate the greatest contribution, consistent with the organization’s risk philosophy.
  5. Customer focus
    Discover, collaborate, and partner with those who can most effectively advance free societies.
  6. Knowledge
    Seek and use the best knowledge and proactively share your knowledge while embracing a challenge process. Develop measures that lead to more effective action.
  7. Change
    Anticipate and embrace change. Envision what could be, challenge the status quo, and drive creative destruction through experimental discovery.
  8. Humility
    Exemplify humility and intellectual honesty. Constantly seek to understand and constructively deal with reality to create value and achieve personal improvement. Hold yourself and others accountable.
  9. Respect
    Treat others with honesty, dignity, respect, and sensitivity. Appreciate the value of diversity, including, but not limited to, diversity in experiences, perspectives, knowledge, and ideas. Encourage and practice teamwork.
  10. Fulfillment
    Find fulfillment and meaning in your work by fully developing your capabilities to produce results that create the greatest value.

The Five Dimensions:

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

The Science of Success

Want to delve further into MBM? Check out our programs to see if our educational and job opportunities are for you. Also, reading further can be a great way to deepen your understanding of both economic freedom and MBM.

In 2007, Mr. Koch wrote The Science of Success. In the book, Mr. Koch presents the evolution of Koch Industries and the “Science of Human Action” upon which MBM is based. He also provides a systematic view of MBM at work within Koch companies by outlining the five dimensions.

Rooted in Prosperity is a helpful blog that combines MBM with real-life examples. Check out its latest posts, as well as a great reading list of books on economic freedom.