Charles Koch began pushing for Cato to adopt a management philosophy he had developed, Crane says. The approach—which Koch called “market-based management”—aims to improve performance by creating market forces within a company. Koch was proud of market-based management, Crane says. For many years, he personally taught it to Koch Industries’ executives in front of a blackboard. His 166-page book, The Science of Success, spells out the philosophy, and he even trademarked the phrase “market-based management.” Sometime in the mid 1980s, engineers from Koch Industries arrived at Cato to teach the staff market-based management. As the engineers clicked through a PowerPoint presentation, Cato staffers were puzzled by their recommendations. For example, Crane says, the engineers said they could improve performance by stopping every 15 minutes to write down everything they had done.

“We’re all just looking at each other like, ‘What the hell is this about?’ ” Crane says.