Achievements
Dee Hock is the founder and former CEO of VISA International - the dominant player in the credit card industry. Since 1970 Visa has grown by 10 000%. It continues to expand at 20% a year, operates in some 200 countries worldwide, includes 22000 member banks and 750 million customers, and reaches $1.25 trillion in annual transactions. Hock has since become the founder and coordinating director of the Chaordic Alliance, the purpose of which is to develop, disseminate and implement new concepts of organization. He is also an author of the bestseller Birth of the Chaordic Age. Dee Hock was inducted into the Business Hall of Fame in 1991.
Career Highlights
Dee Hock (born in 1929) was a self-educated mountain boy with a deeply ingrained respect for the individual and a hard-won sense of self-worth. Before he had come to the Seattle licensee bank of Bank of America he had already left three financial companies because of his abhorrence to the hierarchical, control-everything organizations stifling any creativity and initiative. And he also had decided to create once an absolutely different organization.
He took his chance in the late 1960s, when the credit card industry was on the brink of catastrophe. The BankAmericard - the very first credit card and a statewide service of Bank of America - faced a competition from the product of five Californian banks called MasterCharge. Bank of America franchised BankAmericard nationwide; so did other large banks. By 1968, the industry had become self-destructive.
In June 1970 control of the BankAmericard system passed to a new entity National BankAmericard, Inc. (later Visa International). And its CEO was Dee W. Hock. The new organization was a nonstock, for-profit membership corporation with ownership in the form of nontransferable rights of participation. Authority, initiative, decision making, and wealth - everything possible was pushed out to the periphery - to the organization’s members. Instead of trying to restrict what the members could do, Dee Hock encouraged them to compete and innovate as much as possible. Visa has been called "a corporation whose product is coordination." The company grew phenomenally during the 1970s - from a few hundred members to tens of thousands and had surpassed MasterCard as the largest in the world.
In May 1984 Hock resigned from Visa and became very active in developing new models of social and business organizations that are neither rigidly controlled nor anarchic - a mixed form he terms chaordic. "Chaordic" is a hybrid of two words: chaos and order. Hock uses the term to describe any organization, system or business that is "self-organizing, self-governing, adaptive, nonlinear, and complex, and which harmoniously combines the characteristics of both chaos and order." VISA is chaordic: while other credit card companies are owned by one company or by a few banks, VISA is owned by the thousands of banks who are also its customers.
Leadership Experience
By creating Visa International Dee Hock gave a birth to a new type of organization he called “chaordic” and a new type of leadership, implying that everyone leads and follows at the same time.
He believes that “any organization, no matter how well designed, is only as good as the people who live and work in it”. In that way the organization's performance is determined by the approach to management its leaders choose. He suggests a “short course of PhD in leadership”, which sounds as “Make a careful list of all things done to you that you abhorred. Don't do them to others, ever. Make another list of things done for you that you loved. Do them for others, always.”
His deep faith that all organizations can be no “more or less than the sum of the beliefs of the people drawn to them” lets him see the way to find people any company can succeed with. Hock says: “Hire and promote first on the basis of integrity; second, motivation; third, capacity; fourth, understanding; fifth, knowledge; and last and least, experience. Without integrity, motivation is dangerous; without motivation, capacity is impotent; without capacity, understanding is limited; without understanding, knowledge is meaningless; without knowledge, experience is blind. Experience is easy to provide and quickly put to good use by people with all the other qualities.”
Hock’s concept of leaders in chaordic organizations reduces almost to zero the idea of management taught as methods for “reducing all diversity and complexity to uniform, controlled processes endlessly repeated with ever increasing efficiency - that is how to make subordinate people behave as cogs and wheels in a mechanistic, predictable, mathematically measurable manner.” In his book Birth of the Chaordic Age Dee Hock writes about the necessity for all people to lead themselves, then lead their superiors, then lead their peers, then hire, teach and motivate their people to do the same. This is what he calls “managing in, up, around, then down”. And this is what makes the word management meaningless because “you cannot command yourself, your superiors or your peers, you only can lead them.”
Background Links
The Trillion-Dollar Vision of Dee Hock, Fast Company
The Art of Chaordic Leadership, Leader to Leader Institute
Birth of the Chaordic Age, Dee Hock
One from Many: Visa and the Rise of Chaordic Organization, Dee Hock
