Transformation by Design

An interview with Dee Hock
by Melissa Hoffman

Dee Hock is the founder and former CEO of Visa International, the most successful business venture on Earth. Could this former bank manager with a conscience be evolution's unlikely hero? Visa owes its success, according to Hock, to its structure, which is nothing less than an evocation of nature's "cha-ordic" laws. Hock coined the term chaordic to describe that perfect balance of chaos and order where evolution is most at home. Yes, that's right. A business venture that takes its cues from Mother Evolution, whose "trademark" dynamism, changing change, and explosive originality are forever groping to innovate, prosper, and extend creation's euphoric reach further and further into manifestation.

If you don't think that something as common as the plastic Visa credit card in your wallet could be part of evolution's plan, consider this: Visa International

... espouses no political, economic, social or legal theory, thus transcending language, custom, politics and culture to successfully connect a bewildering variety of more than 21,000 financial institutions,16 million merchants and 800 million people in 300 countries and territories. Annual volume of $1.4 trillion continues to grow in excess of twenty percent compounded annually. A staff of about three thousand people scattered in twenty-one offices in thirteen countries on four continents provides ... around-the-clock operation of two global electronic communication systems with thousands of data centers communicating through nine million miles of fiber-optic cable. Its electronic systems clear more transactions in one week than the Federal Reserve System does in a year.

Hock has chronicled Visa's spectacular emergence along with his philosophical and personal odyssey in a book called Birth of the Chaordic Age. Therein he deftly disassembles assumptions you didn't even know you had; assumptions about how we have come to order, organize, and configure everything, from our desktops to our institutions to the very pattern of our thinking.

WIE: How do you help people understand chaordic principles in relation to the current forms of organization that are so much a part of our lives?

DH: An illustration I use to get people to understand it is this: I'll ask major corporate audiences: Why don't you just take all your traditional beliefs about organizations, and apply them to the neurons in your brain? Organize the neurons in your brain, the most complex, infinitely diverse organ that has ever emerged in evolution, as you would a corporation. The first thing you've got to do is appoint the Chief Executive neuron, right? Then you've got to decide which are going to be the Board of Directors neurons and the Human Resources neurons, and then you have to write an operating manual for it. Now, if you could organize your brain on that model, what would happen? You would instantly be unable to breathe until somebody told you how and where and when and how fast. You wouldn't be able to think or see. What if your immune system were organized on this basis? First you'd have to do some market research to determine what virus, if any, was attacking you, right? Then you'd have to write a business plan for how you were going to deal with it. And you'd have to get it approved by the senior executive neurons in your brain. Then you'd have to have marching orders for all the various aspects of your immune system. Okay. So why in God's world do we think we can use something like the brain, which is organized on this beautiful set of chaordic principles to organize society in a superior manner? That's an exercise in arrogance and ego.

WIE: At the end of your book you emphasize that you hadn't anticipated the power of individuals' resistance to change. You noticed this phenomenon throughout your experience with Visa. Since then, how have you come to understand this resistance to change?

DH: The reason people have so much trouble with change, I think, is a matter of conditioning. It arose many thousands of years ago, but essentially, this mechanistic way of thinking came into dominance about the time of Newton and Descartes, when Newtonian science postulated that the universe and everything in it could only be understood as a clocklike mechanism, a machine, with each part acting on the other part with precise linear laws of cause and effect. So when this way of thinking came into being through science, we began to try to apply it to everything. Starting about four hundred years ago, we tried to organize every aspect of society based on this mechanistic, scientific perspective. The Newtonian way of thinking has marvelous uses. For example, if I go in the hospital for eye surgery, I don't want a chaordic operating room. If you're going to build a perfect silicon chip, you need a totally controlled, very clean, highly organized, almost mechanistic environment. But that doesn't mean it's a good way to run Intel, or a good way to run a health care system.

So for four hundred years we've been trying to build all our organizations as though the Newtonian mechanistic internal model of reality were universally applicable. You know, this person reports to that person who reports to that person. Planning comes from the top and is distributed down. Everything else—money, power—is distributed up. Everything has linear cause and effect, which leads to endless manuals of rules and regulations.

If you think about it, you realize that every institution you have experienced in your lifetime is consciously or unconsciously based on that metaphor and that model. Your school operated that way, and your church, and your community, and your state. Your internal model of reality is the machine. So it doesn't surprise me at all that it's difficult to think otherwise or even to really understand that you are thinking in a mechanistic way. Stress arises out of having this internal model of reality at a subconscious level, literally in your genes, without knowing you've got it, and without asking how you've got it, and why you've got it, and whether it's useful any longer. And it's enormously more difficult, even if you can intellectually understand it, to literally get it in the bone.

So it's just not surprising at all that people should have such difficulty after so many years of conditioning, and given the fact that even if they start thinking in a different way, they are immediately head-to-head with a society in which virtually every institution and situation is operating on the old Newtonian model. That's why it's difficult. I think it will take several or more generations to break completely free of the Newtonian mechanistic mindset.

WIE: In light of the enormity of this conditioning and our reluctance to let it go, what do you think actually provokes the leap out of the old system? You were incredibly motivated to do this. What do you think it's going to take for individuals to be willing to endure the discomforts of leaving the old model behind?

DH: Well, first of all, you really need to open your mind to try to understand what your existing internal model of reality is and how it functions. And then you need to familiarize yourself with it. Emerson had a wonderful line. He said, "Everywhere you go you take your giant with you." So you have this giant unconscious thing, this internal model of reality, against which you judge and measure everything. You're never going to get rid of it, so you might as well turn around, introduce yourself to it, and say, "We're going to be together the rest of our lives, but I'm not going to let you drive my thinking any more. You have to live with my ability to think in a different way." You just confront it. I often tell audiences, "Lord, I was raised to command and control. I'm a sort of command-and-control-a-holic." I may never get it out of my system. But unless I understand it, I can't begin to deal with it.

PURPOSE AND PRINCIPLES

WIE: How can a group of people learn to think in a different way on a collective level?

DH: Well, you really have to go deep. I spent months and months asking myself, "What is an organization?" If I'm talking about institutional and organizational change, what am I really talking about? What is an organization in the deepest sense? It surely isn't just a set of bylaws, because I can write a set of bylaws and shove it in a desk drawer, and it just becomes an old moldering piece of paper. And if you really think deeply about it, you discover that every organization and every institution, without exception, has no reality save in your mind. It's not its buildings. Those are manifestations of it. It's not its name, it's not its logo, and it's not some fictional piece of paper called a stock certificate. It's not money. It is a mental concept around which people and resources gather in pursuit of common purpose.

Now let's follow this just a little further. If that institution has no reality save in your mind and the minds of all your associates and the people who deal with it, then what is its real nature? What's its real strength? And that led me to believe that the heart and soul of every organization, at least every healthy organization, is purpose and principles. What is the purpose that brought you together and what is your system of beliefs about how you intend to conduct yourself in pursuit of that purpose? If your beliefs are based on the old model of top-down command and control, specialization, special privilege, and nothing but profit, your organization will, in time, turn toxic. It will become antithetical to the human spirit and destructive of the biosphere. The evidence is everywhere around us.

Your organization needs to be absolutely clear about purpose and principles and must be very careful to know what a purpose and a principle is—you know, a purpose is not an objective, it's not a mission statement—a purpose is an unambiguous expression of that which people jointly wish to become. And a principle is not a platitude—it is a fundamental belief about how you intend to conduct yourself in pursuit of that purpose. You have to get very precise about these things. If the purpose and principles are constructive and healthy, then your organization will take a very different form than anything that you ever imagined. It will release the human spirit and will be constructive of the biosphere. Natural capital and human capital will be released in abundance and monetary capital will become relatively unimportant. To put it another way, I believe that purpose and principle, clearly understood and articulated, and commonly shared, are the genetic code of any healthy organization. To the degree that you hold purpose and principles in common among you, you can dispense with command and control. People will know how to behave in accordance with them, and they'll do it in thousands of unimaginable, creative ways. The organization will become a vital, living set of beliefs.

I've found that it's very difficult to lead people through enough metaphors and enough thinking about this—you can only think about it so much and your circuit breakers just go out. You have to rest, reset them, and come back to it. And you go over and over it. But what I find is that once you get a group of people who really begin to understand this, then energy, excitement, and enthusiasm literally explode out of them—they know what to do. You know, it's just in their nature. You can't stop it.

So to go back to the question of change—you can see that because of these four hundred years of intense conditioning, we've been taught to fear change. If you're in a rigid, mechanistic, cause-and-effect society and/or organization, then any change becomes a crisis in self-esteem. It destroys our identity, our sense of being, our sense of time and place. And we're never sure we're going to be of any value in the new order of things. We falsely see this as terrifying. But my God, this might be the greatest, most exciting adventure for the species that ever occurred.

WIE: You're describing quite a high level of individual commitment, the kind that has the power to create sweeping change.

DH: At one time I got interested in trying to understand how great leaders created enormous social change—take Christ, take Muhammad, Gandhi, Mother Teresa, Joan of Arc, Martin Luther King, Jr. When you look back at their history, almost without exception they were nobodies. Nobody! Gandhi was just a mediocre attorney who got thrown off a train into the dust by the British because he was Indian. Mother Teresa—just an ordinary nun. And so I studied—what made their ideas so compelling? Their ideas weren't that unique. In fact, they were often pretty traditional. Why, then, did their articulation of their beliefs have such profound effect? What I discovered was something that I think is almost universally true. They really examined what was happening around them, and examined all the existing institutions, and saw with clearer vision. They didn't delude themselves about it. Furthermore, they had the capacity to project themselves into the future and deal with the four aspects that I think are essential to understanding anything: how things were (history), how they are today, how they might become or where they're heading, and how they ought to be. They had the capacity to take that larger question of "how things ought to be" into the future and decide how they ought to be.

Now, the interesting thing is that almost without exception, they didn't start by preaching it. They started by living as though it were already true. They profoundly changed their way of living and said, "I don't have to live the way I am now." Mother Teresa said, "I can pick up a beggar in the street and tell him God loves him and help him die with respect and dignity. That I can do." Right? So once they began to live as though what ought to be was true, they had an authenticity that was just compelling. Complexity theory would call it a strange attractor, a legitimacy, an authenticity. And then they talked about it. They never wavered, no matter what the obstacle, or what the condemnation. And many of them died because they couldn't live any other way. Some of them were killed. I don't think they were unique. I think that capacity is in every single living human being. We just have to get in touch with it. And begin.






Link to the full article

Dee Hock (born 1929) is the founder and former CEO of the VISA credit card association. In 1968 Hock convinced Bank of America to give up ownership and control of their BankAmericard credit card program. The new company, called National BankAmerica, was a non-stock membership corporation equally owned by its member banks. The name was changed to VISA in 1976. (wikipedia)