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Chaordic Commons

Birth of the Chaordic Age. Dee Hock. (Berrett-Kohler, 1999)

A Difference That Makes A Difference. A speech by Joel Getzendanner to the Center on Philanthropy, 12th Annual Symposium. The rapidly changing technological landscape is just one element of a much deeper set of societal changes. The institutional roles and relationships that make up the nonprofit sector will need to change dramatically before it can thrive in the next century.

We're Trying to Change World History. C. Salter. Fast Company, November 2000. It sounds corny, but it's true: Bishop William Swing is a man on a mission. His goal? To change the relationships among the world's religions, from hostility to harmony.

Forming Order from Chaos: The Chaordic Alliance Questions Financial Axioms. T. Kostigen. Sophisticated Investor on CBS.MarketWatch.com, 12/14/2000.

The Trillion-Dollar Vision of Dee Hock. Fast Company, October 1996. The corporate radical who organized Visa wants to dis-organize your company.

Dee Hock on Management M. M. Waldrop. Fast Company, October 1996. An organization, no matter how well designed, is only as good as the people who live and work in it.

Dee Hock on Organizations. M. M. Waldrop. Fast Company, October 1996. 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.

 


The cyclist suddenly races up from behind me and goes hurtling past.

Surprised, I reflexively leap to one side, lose my balance, stumble over a curb, and abruptly sit down on a patch of grass. Muttering mild oaths under my breath, I watch as she gracefully dodges among the joggers, baby carriages and other bikers, and quickly disappears from sight. The juxtaposition of her balance, agility and speed and my awkwardness at first grates on me, but then I pause.

How did she learn to do that? If I got on a bike and tried to follow her, I almost certainly would kill somebody.

At some point, she had gotten onto a bike for the first time. Perhaps a patient father explained how the pedals and brakes worked. He may have explained that if she leaned too far to one side or the other she would lose her balance and fall. But explanations were only part of the learning. Her muscles, not just her brain, had some learning to do. Her father knew this as well, running along side her bike, holding it steady, until she could do it on her own. And the learning continued. Learning to ride on the sidewalk was different than learning to ride on the street or through the forest. Brains and muscles learned independently and learned together in every new situation they faced, finding a deep and instantaneous integration, until they could confidently weave in and out of the crowds strolling through the park.

Balance, agility, and speed. My mind jumps to a conversation I had that morning with a group of software entrepreneurs. They had used the identical terms. Each complained about how quickly their companies lost the maneuverability they needed to survive in an ever-changing marketplace. They needed to be fast. They needed to be agile. They needed a way to stay balanced in the midst of all that change. Their companies’ current single-minded foci—that they helped put in place and that was critical to draw investors—now made it difficult to respond to the opportunities that would drive the next cycle of growth. Their businesses were unbalanced. Their personal lives were unbalanced. But their only real alternative was to go even faster.

We laughed at the parallels between their companies and my youngest daughter’s first efforts to walk. She first leaned in the direction she wanted to go, and then had to run as fast as she could in that direction in order to keep from falling down. The more she leaned, the faster she had to run. She only stopped when she hit her destination—or the floor. Her speed maintained the illusion of balance but, unfortunately, illusions eventually evaporate.

Business is no longer a sprint down a straight unencumbered track. It is bobbing and weaving through unfamiliar landscapes at great speed and great risk.

Suddenly, another cyclist comes whizzing past. This one is even more graceful than the first. He virtually dances through the crowds, first leaning one way and then the other, but always around the same center of gravity. I imagine a tightrope artist balancing himself with a long pole, agilely compensating for every motion of the highwire with the gentle movement of his wrist: staying effortlessly centered over a constantly moving wire…

That’s when it all came together for me.

Balance comes from being deeply centered, both in motion and at rest. The common image of “balance” as a scale with equal amounts on both sides is both trivial and misleading. Yet, when we speak of balancing work and life, it is often the first image that springs to mind. If we feel out of balance, we are told to add more to what is absent or to take away what is abundant. We think of equal opposites rather than integrated and coherent wholes.

Agility is the ability for every part in the body to respond independently and intelligently—without conscious control—to keep the body centered while in motion. The “center” is not permanently fixed, but it is best for it not to take wild swings. The more complex the motion, the more important it is for the body to move around the center rather than the center to move around the body. It is possible for us to “lean” in a way that stays centered, as the cyclist knew well, and it is possible to lean in a way that loses control, as my daughter discovered.

Speed, when balanced and agile, is an act of confidence and a thing of beauty. Speed without balance is an act of recklessness or desperation. Speed is not necessary for balance. In that same park, I saw men practicing a gentle rhythmic martial art with extraordinary balance. But speed heightens the demands on balance and agility, and can create the illusion of balance when there is none. I know many people who have substituted speed for balance. In a world like today’s, when speed is a competitive necessity, it’s hard to fault them. But I am reminded of the many times I found my daughter sitting stunned on the floor after running headlong into a chest or wall, and I worry for their futures.

Balance is only meaningful in relation to a specific environment against which balance is maintained. The balance that a skier maintains, as she bounces from mogul to mogul, requires a different kind of centering and agility than the tightrope artist. One size of balance does not fit all. I was doing fine with my balance as I walked along the park path until the cyclist changed that environment abruptly, and I did not adapt rapidly enough. There are as many different kinds of balance as there are people and situations in the world. When it comes to balance, there are many “right” answers.

I am not an expert when it comes to individual balance. I struggle finding a center, let alone developing the agility to stay balanced around it. More damning, I’m afraid my daughter got her “leaning” genes from me. I am an expert at the single-minded rush into darkness, and I have the lumps and the bruises to prove it.

But I have also learned that I am much more susceptible to losing my balance (or never finding it!) when I am on my own. I have a much easier time of it when I operate within a community where everyone is trying to learn to be balanced and agile around the same kind of “center.”

This time, the siren of a distant fire engine breaks my reverie. I realize that I am still sitting on the grass, and dampness is permeating my clothes. I brush myself off and sit on a nearby bench.

I was avoiding thinking about a meeting I had that afternoon with a group of healthcare professionals. They had heard the story of how Dee Hock had transformed the banking industry with Visa. Here’s the story:

In the late 1960's, a group of banks faced the challenge of constructing a system to exchange credit card transactions. The coming age of electronic transactions was still on the horizon, and they needed a system that could let them exploit it when it came. Since no single bank could afford creating the whole system, they had to create an organization that they could all collectively own, all individually trust, yet would not impede competition. In fact, it would need to enhance competition if it hoped to pass antitrust muster. No organizational structure existed that met these criteria. They had to invent it from scratch.

Led by the credit card manager of a small regional bank, Dee Hock, a small group of bankers began working on a core set of purposes and principles to which they believed all banks would agree. They then steadily involved more and more banks in a process of refining that core set of beliefs about their industry, and began to conceptualize a possible function and initial structure for an organization.

After a year and a half of intense effort, the process was complete and the organization that would become known as Visa came into existence with Mr. Hock as its first CEO. The design process had given rise to a corporation unlike any other. In 1993[1], Mr. Hock, who has retired from Visa in the mid-1980s, said:

I still find it difficult to describe the organization but let me try.

In the legal sense, VISA is a non-stock, for-profit, membership corporation. In another sense, it is an inside out holding company in that it does not hold but is held by its functioning parts.

The financial institutions which create its products are, at one and the same time, its owners, its members, its customers, its subjects and its superiors.

It is an organization, the totality of which, excluding thousands of affiliated entities, would, if converted to a stock company, have a market value in excess of $100 billion. Yet it cannot be bought, traded, raided or sold since membership is held in the form of perpetual, non-transferable membership rights. However, that portion of the business created by each member is owned solely by them, is reflected in their stock prices and can be sold to any other member or any entity eligible for membership, a very broad, active market.

A staff of less than two thousand scattered in twenty-one offices in 13 countries on four continents guides this trillion-dollar business. It has multiple boards of directors within a single, legal entity, none of which can be considered superior or inferior, as each has irrevocable authority and autonomy over different geographic or functional areas. Their interests are often opposed yet they are served by common officers and staff.

It espouses no political, economic, social or legal theory, transcending language, currency and culture to successfully work with and harmonize relations between countries, institutions and peoples of every persuasion. It has gone through a number of wars and revolutions, the belligerents continuing to share common ownership and never ceasing reciprocal acceptance of cards or exchange of sales drafts even though they were killing one another.

It is an organization which, in five years, transformed a troubled product with a minority market share into a dominant market share and, by a substantial margin, the most profitable banking service. It has had no less than twenty and as much as fifty percent compound annual growth, through the best and the worst of times.

Its product is the most universally used and recognized in the world, yet the organization is so transparent its ultimate customers, most of its affiliates and some of its members do not know it exists or how it functions. At the same time, the central core of the enterprise has no knowledge of, information about or authority over a vast number of the constituent parts. No part knows the whole, the whole does not know all the parts and none has any need to. The entirety is self regulating.

The group of healthcare professionals I was meeting this afternoon did not grasp the story’s full meaning. They instinctively knew that something important had happened, but they were fixated on what Dee had done, not on how or why.

They were hoping that we would give them an “answer” about creating a governance structure that balanced the many competing interests within their industry in a way in which no one dominated it. They were expecting some silver bullet of organizational structure that would solve all their problems. They were going to be disappointed by what we had to offer. Structure enhances balance, but not the other way around.

We would tell them to forget their preconceptions of the medical profession and how people currently interacted within it. We would tell them there was no “chaordic model” of organization; any more than there was a model for how life organized itself on this planet.

We would tell them first to search for the center of gravity—what we call “purpose”—the deepest aspiration commonly shared by a community of individuals and their institutions. Once they found this deep balancing point, they could then begin to learn what it meant to be agile around it, and what kind of structures could enhance that balance and agility. Without finding it, the best they could do is just “lean” in a promising direction.

They think that all they need to do to succeed is learn how to construct the right bike, when they first need to learn how to ride—how to balance.

Yes, they are going to be disappointed. They are all excited to rush out into the world and lean

As I stand up to continue my walk in the park, I notice that across from me, under a small tree, a young mother is sitting, breastfeeding her baby.

I stop. I had been so focused on the athleticism of the cyclists that I had missed a much more powerful lesson. Here was the essence of balance. Here was the essence of depth of purpose: mother and child, giving and receiving both physical and emotional nourishment, cementing the bonds of the human family.

A powerful and meaningful purpose for a community is no harder to find than one’s own physical center of gravity. It’s there. It doesn’t have to be “invented.” We have found the most deeply personal aspirations also tend to be those that are most deeply common, and vice versa. Nice the way that works.

Even the bankers in Visa discovered that down deep they shared an important social purpose: being a trusted conduit for the custody and exchange of value. We sometimes joke that what is “deep” for a banker, is not that deep for the rest of us, but it is only a joke. That purpose was deeply centered enough to keep more than 20,000 banks cooperating despite equally intense competition—even long after all the participants forgot that it was founded on a purpose other than making money. “Deep” is in the eye of the beholder.

One measure of how deeply a purpose is centered is how much diversity can be tolerated within it without losing coherence. An experienced tightrope walker always chooses a long balancing pole over a short one. It seems ironic, but greater range produces greater balance, and greater balance can withstand greater range.

I look back at the mother and baby. The community of which they are a part reaches back in time for eons and, God willing, forward for even more. Now that’s a long balancing pole.

I stroll toward the park exit. After all, I have a meeting to prepare for.

A cyclist bumps my elbow on his way by. This time I don’t even flinch. I’m confident. I feel balanced.

I first look one way, and then the other. I decide to test my newly found balance. I skip all the way back to the office…

Joel Getzendanner was a founding board member of the Chaordic Alliance, and now works full-time with the Chaordic Commons on its projects and educational programs. Joel achieves his own balance with the help of his loving wife and two daughters. He coaches springboard diving at the local high school and likes to fly kites. He can be reached at joelgetz@chaordic.com.

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[1] Remarks of Dee Hock at meeting convened by the Joyce Foundation, October 11, 1993. Used with permission.

 

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