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Dee Hock on Organizations

Organizations, according to Dee Hock, 'Can be no more or less than the sum of the beliefs of the people drawn to them.'

Whenever Dee Hock talks to people about chaordic organizations, someone always wants to know, 'Where's the plan? How do we implement it?' But that's the wrong question, he says.

"All organizations are merely conceptual embodiments of a very old, very basic idea — the idea of community. They can be no more or less than the sum of the beliefs of the people drawn to them; of their character, judgments, acts, and efforts," Hock says. "An organization's success has enormously more to do with clarity of a shared purpose, common principles and strength of belief in them than to assets, expertise, operating ability, or management competence, important as they may be."

Some principles that worked for Visa:

The organization must be adaptable and responsive to changing conditions, while preserving overall cohesion and unity of purpose.

This is the fundamental paradox facing businesses, governments, and societies alike, says Hock — not to mention living cells, brains, immune systems, ant colonies, and most of the rest of the natural world. Adaptability requires that the individual components of the system be in competition. And yet cohesion requires that those same individuals cooperate with each other, thereby giving up at least some of their freedom to compete.

The trick is to find the delicate balance that allows the system to avoid turf fights and back-stabbing on the one hand, and authoritarian micromanagement on the other.

"Neither competition nor cooperation can rise to its highest potential unless both are seamlessly blended," says Hock. "Either without the other swiftly becomes dangerous and destructive."

The organization must cultivate equity, autonomy, and individual opportunity.

"Given the right circumstances," says Hock, "from no more than dreams, determination, and the liberty to try, quite ordinary people consistently do extraordinary things."

The organization's governing structure must distribute power and function to the lowest level possible.

"No function should be performed by any part of the whole that could reasonably be done by any more peripheral part," says Hock, "and no power should be vested in any part that might reasonably be exercised by any lesser part."

The governing structure must not be a chain of command, but rather a framework for dialogue, deliberation, and coordination among equals.

Authority, in other words, comes from the bottom up, not the top down. The U. S. federal system is designed so authority rises from the people to local, state, and federal governments; in Visa, which contains elements of the federal system, the member banks send representatives to a system of national, regional, and international boards. While the system appears to be hierarchical, the Visa hierarchy is not a chain of command. Instead, each board is supposed to serve as a forum for members to raise common issues, debate them, and reach some kind of consensus and resolution.

A version of this article appeared in the October/November 96 issue of Fast Company magazine.