So, I've decided to make a 10 minute presentation MBM. I'm lacking focus though and could use some direction.
Here is the abstract.
Is this creating value? The fundamental underlying question that affects every direction and decision taken in Market Based Management (MBM). Developed by Charles Koch, a prominent Libertarian, he implemented ideas from Ludwig Von Mises and other noted Austrian economists, to develop a strategy of management for the future. And it's paid off. Koch Industries is the largest and most profitable privately held company in the world.
Eliminating pay structures of employees and job titles, his workers are treated as entrepreneurs within the organization. His workers are compensated on value creation they generate for the company, not something like tenure.
"entrepreneurs are rewarded by getting to keep a portion of value they create in society. " Why shouldn't workers be rewarded the same way?
-- here is where I lose focus. I have a bunch of different topics I want to touch on in a limited amount of time (10 mins). Help make this coherent!
MBM has four main assumptions.
todays world is characterized by an unprecedented rate of change- driven by accelerating accumulation of knowledge.
"creative destruction. " Less effective products and methods are constantly being replaced by those that produce greater value.
Second assumption. : prospering in this environment requires a well rounded and internally consistent framework that enables us to interpet and apply new knowledge.
principles that apply to market economies can be applied to an individual company.
Third. Theory and histopry we know that the best frame work for dealing with rapid change is based on economic freedoms.
And the fourth is the five key dimensions.
MBM has five key dimensions.
Vision. Determining where and how the organization can create the greatest long term value.
Because Koch Industries is privately held, the company can focus on long term goals, rather than quarterly performance.
Virtue and Talents. Helping ensure that people with the right values, skills and capabilities are hired and retained and developed.
The company looks to develop people from small towns, and farms who work to put themselves ahead in life. They generally recruit talent from state schools.
Decision Rights. Right people in the right roles with the right authority to make decisions and to hold these people accountable.
All employees have a stake in the business, and are held to a profit and loss model. At Koch, it is ok to make a mistake, as long as it is learned from, and not covered up.
Knowledge processes. Creating, Aquiring, Sharing and applying relevant knowledge, measuring and tracking profitability.
Initiative. From rank and file, rather than strick control from the top.