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Lesson #5: “No organ in your body dominates any other”

Article Overview: Thanks to Hock, VISA operated according to some unique principles for its time.

Lesson #5: “No organ in your body dominates any other”

Thanks to Hock, VISA operated according to some unique principles for its time.

“One was that participation and ownership should be open to all relevant and affected parties,” he said. “A rain forest doesn’t choose which seed will sprout. They’re all eligible to belong.”

Another operating principle was that decisions and deliberations were to be made by bodies and methods that included all relevant actors and were not dominated by any one.

“There is no dominant part of nature,” said Hock. “No organ in your body dominates any other. Get rid of your liver and your brain dies just as certainly as your liver will without the brain.”

After VISA became a common worldwide trademark, “The whole thing soon exploded,” said Hock. “It released human ingenuity and human imagination and linked people of every culture and language, every political persuasion, every conceivable currency, into a cooperative network in which the owner-members, the banks, engage in the most fierce competition, while at the same time engaging in intense cooperation in elements essential to existence of the whole.”

“It’s not unlike the cells in your body. Every cell in your body competes for every atom of nutrient and oxygen you swallow and at the same time is interconnected so it can recognize where there is a greater demand on any other cells and voluntarily release its demand for the good of the whole. That is the essence of VISA. It started as 200 owner-member banks and 2 or 3 billion dollars in sales, and thirty years later its volume will be a trillion eight hundred billion dollars. It is cooperatively owned by 20 thousand banks in 240 countries and territories serving over a billion consumers. And its electronic systems clear more financial transactions in a week than the entire US federal reserve system does in a year.”

Hock has referred to VISA as a “reverse holding company,” where the parts own the core instead of the other way around.

“Ownership is in the form of irrevocable rights of participation, which the banks can’t sell. They can sell their portfolio, but not their membership, and therefore no one can raid it, trade it, buy it or sell it. It’s invulnerable because it has no stock,” he said. “Over the years, the core of the organization has developed all sorts of services it sells outside the membership so it can become a source of revenue rather than of taxation. It has a venture capital firm; does most of the auto-mated clearing house clearings; and has a host of other entities. So it’s a very fractal system.”

It is this fractal system that allowed VISA to succeed when all others around it were crashing.

“If you examined it, it would look very much like the organs in a body, then the cells within the organs and the nucleus within the cells. In three decades these organizational concepts took the enterprise from a haemorrhaging industry on the verge of collapse to what is now arguably the largest commercial enterprise on earth, and the largest single block of consumer purchasing power on the globe.”

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Article Tags: hock, time lesson, visa



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Sorry - The title leads into the body of the comment! Regards


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