Changing the Metaphor of Money

Credit: Dominic Alves, Flickr

Credit: Dominic Alves, Flickr

Following on from my previous article on metaphors and paradigm shifts, I thought I would write about one particular monumental shift in paradigm, which was central to the development of VISA’s credit card system. VISA was inspired by the vision of Dee Hock, who himself was inspired by nature. Here is one of his quotes, which comes from his book Birth of the Chaordic Age:

Dee Hock Quote

It is extremely clear just how profound Hock’s comprehension of nature is, as a continually changing process in flux, which he is able to comprehend as a whole:

Dee Hock Quote

In order to understand the urgent requirement for a new organisational structure, it is important to understand that in the 1960s, the credit card industry was in a crisis, with the system on the point of collapse. Losses were in the hundreds of millions and growing and in the Bank of America there was a fundamental lack of awareness of the problems.

The clearing system was disintegrating under the volume of transactions, a system in which there were very high authorisation costs. This meant that it was vulnerable to fraud, and therefore in Hock’s words was “a bonanza for criminals”.

Dee Hock: Credit - Social Action DK

Dee Hock: Credit – Social Action DK

As Hock describes in his story of the creation of VISA, the only approach to solving this entangled nightmare was to examine the fundamentals: what is the function of a bank, the function of money and the function of credit cards.

As the thinking process evolved, Hock’s team began to strip away the “onion” of their business, and they conceived credit card’s as having three functions:

  1. Identify the buyer and seller
  2. Act as a guarantor in the purchase and exchange of goods and services.
  3. The origination and transfer of value data.

In this ah ha moment, Hock describes the insight as a revelation, being able to think in a more holistic manner. For the team, “a change of consciousness occurred”.

In this way of conceptualising the business, the “demand for value” would be in the form of “energy impulses” circulating around the globe, seven days a week. The implication and realisation was that no single organisation would be able, on their own, to develop a system capable of meeting the predicted demand and usage patterns.

Hock calculated that while no single bank had the resources (and at this point in time, Bank of America had their own legal patented credit card system which they licensed out as a franchise). What he was able to imagine was a “transcendental organisation” linking partners together in whole new ways never previously known.

In reflecting on his thinking process, Hock breaks down the creative process about visioning the future into four distinct ways of looking at things: as they were, as they are, as they might become and as they ought to be. It is important to synthesise and hold all four ways of seeing in mind at once, an act which Hock describes as the work of “genius”.

What is also vital I feel in the story, is that VISA could only have been developed with a very clear set of values that each partner adhered to. These were openness, fairness, trust and confidence. When these universal values are absent, genuine co-creation and innovation becomes near impossible. We should always work hard not only on our creativity, but on our values, since without values, the creative work will have been in vain.

Related articles

Dee Hock In His Own Words

The Power of Metaphor and the Limits of Paradigm Shifts

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