The Trillion-Dollar Vision of Dee Hock

"We are at that very point in time when a 400-year-old age is dying and another is struggling to be born -- a shifting of culture, science, society, and institutions enormously greater than the world has ever experienced. Ahead, the possibility of the regeneration of individuality, liberty, community, and ethics such as the world has never known, and a harmony with nature, with one another, and with the divine intelligence such as the world has never dreamed."

Not the fire-and-brimstone gospel preaching of a tent revivalist -- but preaching nonetheless. This is the workplace gospel of Dee Ward Hock, a 67-year-old retired banker with a powerful message of change, hope, and possibility, and the promise of a shining synthesis of chaos and order, a "chaordic organization."

Peter Senge, author of "The Fifth Discipline" and a leader in organizational redesign, brought in Hock last year to help reconceive his MIT Center for Organizational Learning, a consortium of 20 companies dedicated to cutting-edge work in corporate adaptability. "Dee is one of the most original thinkers on the subject of organization that I've come across," Senge says.

Alan Wright, education director for the Arizona Department of Juvenile Corrections, who recently started working with Hock to organize a statewide movement for educational reform, says, "I see Dee as a leader in bringing innovative ideas to this field." And at the National 4-H Council, the not-for-profit youth arm of the U.S. Department of Agriculture's Cooperative Extension Service, which started working with Hock over a year ago, Vice President Donald Floyd says, "We've done all kinds of consultants, and we've done a lot of heavy-duty facilitator stuff. But this is different."

When he talks, Dee Hock is charismatic and compelling. But people listen to him for one reason: credibility. Unlike most visionaries -- or management consultants -- Hock has put his ideas into practice. More than 25 years ago he oversaw the creation of a business that was organized according to the same principles of distributed power, diversity, and ingenuity that he advocates today. And that business has prospered -- to put it mildly.

Since 1970 it has grown by something like 10,000%. It continues to expand at roughly 20% per year. It now operates in some 200 countries worldwide. It serves roughly half a billion clients.

And this year, its annual sales volume is expected to pass $1 trillion.

This is one of Dee Hock's favorite tricks to play on an audience. "How many of you recognize this?" he asks, holding out his own Visa card.

Every hand in the room goes up.

"Now," Hock says, "how many of you can tell me who owns it, where it's headquartered, how it's governed, or where to buy shares?"

Confused silence. No one has the slightest idea, because no one has ever thought about it.

And that, says Hock, is exactly how it ought to be. "The better an organization is, the less obvious it is," he says. "In Visa, we tried to create an invisible organization and keep it that way. It's the results, not the structure or management that should be apparent." Today the Visa organization that Hock founded is not only performing brilliantly, it is also almost mythic, one of only two examples that experts regularly cite to illustrate how the dynamic principles of chaos theory can be applied to business.

It all started back in the late 1960s, when the credit card industry was on the brink of disaster. The forerunner of the Visa system -- the very first credit card -- was BankAmericard, which had originated a decade earlier as a statewide service of the San Francisco-based Bank of America. The card got off to a rocky start, then became reasonably profitable -- until 1966, when five other California banks jointly issued a competing product they called MasterCharge.

Bank of America promptly responded, franchising BankAmericard nationwide. (In those days, banks were forbidden to have their own out-of-state branches.) Other large banks quickly responded with their own proprietary cards and franchise systems. A credit card orgy ensued: banks mass-mailed preapproved cards to any list they could find. Children were getting cards. Pets were getting cards. Convicted felons were getting cards. Fraud was rampant, and the banks were hemorrhaging red ink.

By 1968, the industry had become so self-destructive that Bank of America called its licensees to a meeting in Columbus, Ohio to find a solution. The meeting promptly dissolved into angry finger-pointing.

Enter Dee Hock, then a 38-year-old vice president at a licensee bank in Seattle. When the meeting was at its most acrimonious, he got up and suggested that the group find a method to study the issues more systematically. The thankful participants immediately formed a committee, named Hock chairman, and went home.