The history of Visa is probably different than you think

In 1968, Dee Hock was an Assistant Vice President at a small Bank of America affiliate branch in Washington.??

At the time, Bank of America owned a small credit card business. Though the business was growing quickly, it was going to be limited by the size of Bank of America's customer base.

Dee was only 38 years old, but he was already establishing a reputation as a maverick. Raised in the mountains of Utah, Dee grew up far more interested in history and philosophy than finance. He says it was this background that helped him come up with the structure for Visa.

"I was struck by how dysfunctional most business organizations really were, how they crushed the human spirit and how often people were in severe conflict with the organizations of which they were part. I started studying history to see where the idea of corporation came from, what it was based on, why our institutions were as they were. I became convinced over the years that all of our present societal institutions were essentially dysfunctional."

Dee proposed a radical idea: spin the credit business out as an independent organization with a set of approved members. By doing this, Bank of America could grow its credit card business exponentially faster.?

After months of internal argument, the board agreed, and Visa was born.?

Dee Hock became the CEO of this organization and in 25 years, he grew it faster than any financial institution in history, to a thousand times its size. In 1974, he completed the implementation of the Base I and Base II systems, which computerized the credit card transaction.?

Today, Visa connects 1 billion people via a payment network and has an annual sales volume of $1.8 trillion. The story of Visa is not that of a powerful entity consolidating control and becoming more and more powerful - rather, it's one of the most compelling case studies of successful decentralization in corporate history.

It was necessary to re-conceive, in the most fundamental sense, the nature of bank, money, and credit card; even beyond that to the essential elements of each and how they might change in a microelectronics environment. Several conclusions emerged: First: Money had become nothing but guaranteed, alphanumeric data recorded in valueless paper and metal. It would eventually become guaranteed data in the form of arranged electronics and photons which would move around the world at the speed of light. - Dee Hock (1974)

It seems so obvious that Visa and Mastercard should have been member-controlled organizations in retrospect. How else could the credit card system conceivably work? Yet at the time, this was a radical innovation.?

Dee called his strategy the "chaordic approach", an ideal mix of organizational chaos and hierarchical order necessary to do innovative work. He explains Visa's structure, but it also seems like he was looking into the future...towards something like a blockchain:

"It’s what you might call a reverse holding company, in that the core doesn’t own the parts; the parts own the core. 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.”

The “chaordic approach” worked.?

"In three decades these organizational concepts took the enterprise from a hemorrhaging 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."

Dee Hock believed that organizations should be as leaderless as possible. He believed that pushing empowerment to the edges of a system give it the best chance to survive and thrive in the modern day. He felt that the job of leadership is to spend the time necessary to establish a driving purpose and a set of rules...and then get out of the way.?

Sidenote: Dee Hock and Satoshi would have gotten along just fine :)