It was a rainy October day in 1969 when 39-year-old banker Dee Hock finally reached his breaking point. Sitting in his Seattle home office, the mid-level manager at National Bank of Commerce rubbed his temples, surrounded by paperwork detailing the chaos of the newfangled “BankAmericard” credit system.
After four years working his way up the ranks at the conservative institution, Hock had become the point man for implementing their licensed version of BankAmericard. But the product was a mess, with high fraud, angry merchants, and banks refusing to cooperate to process transactions. “This is an utter disaster,” Hock lamented.
In the earliest days, credit cards worked through a cumbersome paper-based system, where merchants would imprint customer card details onto slips to be mailed back to banks in stacks for eventual processing and billing – a process that took days or weeks to complete transactions. This made commerce inefficient compared to limited payment options like cash and checks.
It was in dire need of modernization through electronic processing when visionaries like Dee Hock saw the vast potential that lay untapped in this new payment product.
His superiors pressed him to replicate Bank of America’s program. But Hock had a more radical vision for reform, which he detailed in an ambitious proposal. Unfortunately, the bureaucratic bank’s executives rejected his ideas as too bold, preferring to maintain centralized control.
Hock turned to his ally William C. Potter, a vice president who agreed the bank was a “behemoth” overly adverse to change. Potter broke the news that Hock’s proposal stood no chance. “Maybe this needs a fresh start somewhere else,” Potter suggested.
Hock saw no way to transform the system from within the constraints of his employer. So within a year, he made the bold decision to leave and create an entirely new organization.
Rather than a centralized corporation, Hock envisioned an open, decentralized network - a cooperative of all the BankAmericard banks. This surprised his former bosses, but aligned perfectly with a vision still brewing in Hock’s mind.
He hadn’t articulated it yet, but at that moment the seeds of his pioneering idea for "chaordic" organizations, a term he coined many years later, emerged and began to take root. From his struggle to create an organization that balanced cooperation and competition, with chaos and order existing in harmony, a revolutionary concept in organizational management was born.
By giving the member banks with often competing interests great autonomy in a collaborative network, Hock enabled the innovation and efficiency needed to revolutionize consumer banking. And banking desperately needed revolutionizing. Before credit cards, consumers lacked any payment method beyond cash and cumbersome checks. Hock's vision would bring banking into the modern era.
The Chaordic Breakthrough
As Hock built up what he called National BankAmericard Incorporated, he pioneered a groundbreaking management philosophy he later dubbed “chaordic.” Blending chaos and order, it aimed to enable networked cooperation free from top-down control. Hock gave employees and members great autonomy, believing human potential is “limitless” when people have freedom to create. This was a radical break from the command-and-control norms of the era.
The chaordic model aligned perfectly with Hock’s vision for a smooth-running, innovative credit card system. In 1974, his network enabled the first real-time authorizations, leapfrogging paper slips. The following year saw the launch of the first electronic clearing and settlement system.
Despite this progress, the Justice Department hit National BankAmericard with an antitrust suit in 1975 challenging its cooperative structure. Undeterred, Hock pressed forward, overseeing the 1976 name change to Visa International.
By 1984, with Visa thriving worldwide, Hock stepped down as CEO, having cemented chaordic principles into the company’s DNA. He remained chairman until 1989, and eventually launched a successful career as an author with books that explain his chaordic philosophy. Great as those books are, it’s really Visa that best epitomizes Hock’s belief that organizations can balance cooperation and competition. Then, Hock’s idea was a revolution. Today, the whole rest of the world agrees with him.
Sadly, Dee Hock passed away in 2022 at age 94, but his pioneering ideas still drive Visa's success. Thanks to Hock's vision, credit cards transformed consumer banking and commerce. Because of his work, ordinary people had an easy, instant way to pay beyond cash, for the first time ever. This drove increased consumer spending, lending, and overall economic velocity.
While Visa may have been the first major credit card network, the real legacy is how profoundly credit cards changed the world. Hock unlocked that through his willingness to reimagine systems in a radically new way. He exemplifies how one person with a bold vision can shake up even deeply entrenched sectors and enable transformative innovation.