Good Profit : How Creating Value for Others Built One of the World’s Most Successful Companies by Charles G. Koch

Are you making ‘good’ profit ??


No one decide what product/service a customer value better than the customer. Dedicating our-self to satisfying what she value is showing respect for her.

In an ordered universe, the natural world is governed by certain principles. To survive and prosper, people must understand and respect those principles.

Koch Business is like stone masonry,once a stone is carefully select and set, it shape a new space which the mason can set yet another well-chosen stone. By being aggressive, providing the best service and develop the best relationship with the producer

Good Profit 101 : Provide the best hassle-free service to client with low cost and attract the best employee base on opportunities we offer.

When we trying new business or new merging opportunities, a good trial-error approach would test validity of such a large scale venture before plunging head first. The size of experiment should have limited to proportion to risk -adjusted potential of the opportunities. Fail Quickly and efficiently signal what doesn’t work, minimize waste and redirect scare resources to what does work.

The loss from all the bad deals combined are less than the gain missed out from 1 Major opportunities failed to capture. A successful company create value by providing product / service customer value more than their alternative. Respond your client in the proper role of business.

In order to benefit ourselves, you must benefit others. Self-interest is confused with selfishness. Self interest can manifest in 2 way with strong aggression or co-operation. The true cost of any activity is the highest value activity forgone – the opportunity cost.

Creative destruction : Find new /better way , make old way obsolete. We only have personal knowledge when we apply something and get result. Success come after correct, frequent , prolonged practice. The process should be study a particulate field with increase amount of knowledge, then we see pattern, meaning, and sense if something wrong . Discovery by observation, the gap between what is and what could be. Then we strive, we seek help, make our hypotheses , challenged, tested and improved.

Adversity is a blessing in disguise and greatest character builder. Superior foresight does not win the price, we must have the conviction, courage and capabilities to act on the insight.

2 set of criteria are needed to determine priorities,
1. Action required to stay in business
2. Compare an estimate risk adjusted present value of appetites to the resources consumed.

Vision is a constant, it never change, its a compass to keep us going in the right direction.

Koch Guiding principle
1. Integrity – Basis of trust, mutual benefit
2. Compliance – 100% employee comply 100% time, comply the law and practice core support of company long term success
3. Value creation
4. Principle entrepreneurship : Overcome the aversion to take a significant change , the effect will field nothing.
5. Knowledge : Measure should guide action and create knowledge , leading to better decision, innovation and profitable action
6. Change : A good experiment lead to new knowledge that bring change, even our assumption is wrong.
7. Humanity Admit mistake and you don’t know rather than defensive.
8. Respect : Customer, coworker, courage to give honest feedback
9. Fulfillment : Meaning in our work

Disruptive innovation require creating, acquiring, sharing and applying knowledge. Company must develop external network, to monitor on going changes in tech / method / market and politics. Gather information bear a cost in time and expenses to both provider and receiver.

Knowing why something is profitable is often as valuable as knowing what is profitable. To succeed, a business must develop P&L measures, also their underlying drive, to know what add value, what is not and why. Measure are only beneficial if lead to profitable action.

Process of identifying, understand and adopt proactive is bench-marking, understand the gap between a performance and the best . Truth is what get result, its what stand the test of evidence and criticism, continual question and brainstorming and keep challenging ourselves.

Tragedy of common : When no one own / benefit by conservative a resources, no one take responsibility. Resources tend to be overused or wasted unless people have clear defined area of responsibility, its difficult to elicit beneficial proactive behavior.

3 requirement for us to act
1. Disqualification with present stat
2. Vision of a better state
3. Belief that we can reach

Learn more about Good Profit >>>>Shop-Now-Button-copy

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