Chaos, order right mix for companies

I was sitting at the Serena Hotel poolside with my best man of 24 years ago Jonathan Campaigne, as he spelt out his vision for empowering bottom-of-the-pyramid Kenyans through enabling value chains of supply by using technology. Describing his intended set-up he threw in a term he assumed I was familiar with, telling me he was looking to build a “chaordic organisation.”

I confessed that I had never heard of it until he casually tossed it in, and it led me to learn more from him – and later from Google – about what it meant and how it came about. Jonathan first explained that it refers to an organisation that blends the characteristics of both chaos and order. Get it? Cha-ord-ic.

He then told me the term was coined by Dee Hock, the founder and former CEO of Visa. In Hock’s 1999 book on the subject, Birth of the Chaordic Age, he tells how Visa International was conceived and established in such an environment. Hock explains how the seemingly contradictory chaordic concept worked for Visa, linking together individuals and institutions of every culture, race, economic and political persuasion in a commonly owned, multi-trillion dollar for-profit organisation. Amazingly, Visa owners, their members, simultaneously engage in the most intense cooperation and the fiercest competition.

Visa’s history began in 1958, when Bank of America initiated its BankAmericard programme in Fresno, California. Originally, the company only planned to provide its system across the state, but in 1965 it began reaching licensing agreements with a collection of banks outside California.

Over the following years, numerous banks nationwide licensed the card system from Bank of America, until in the late 1960s Dee Hock, one of the heads of a group of BankAmericard licensee banks, suggested that the banks create an association. It would act as a joint venture, enabling members to gain the advantages of a centralised payments system while also competing fairly for their own benefit. Hock became the association’s first president, and he came up with the name Visa, which he felt would be instantly recognisable in many cultures and languages and so accepted universally.

As I thought about this combination of cooperation and competition I was reminded of the really ugly word “co-ompetition”, to which I was introduced many years ago and which also speaks to the increasingly complex world in which we live.

In my time leading IT vendoring companies I related to the phenomenon in the context of our relationship with major IT consulting firms. Sometimes they were hired by clients of theirs to select among vendors – among them ourselves. Then if we were selected they might remain on the scene to ensure we performed. On other occasions they bid for contracts in competition with us; and now and again we would partner, one sub-contracting to the other. Finally, in certain circumstances one of us would just recommend the other for the provision of a complementary service.

Hock showed how in the right cultural environment what no one thought could have been possible became a great success, reinventing leadership and management, and transforming business and society. This maverick banker put his wild ideas into practice to create something extraordinary – just as my friend Jonathan, another disruptive visionary, assumes he will do and as he has done before through his pioneering development of the microfinance sector in this region.

So I thank my best man for bringing “chaord” into my life, helping me better understand the possibility of a harmonious coexistence between players that brings in characteristics of both chaotic and ordered behaviour without either dominating.

Since Hock’s application of chaordic principles to the formation of Visa, they have been applied to organisations that are neither centralised nor anarchical. Hock dreamed more broadly about the possible application of his chaordic concept, to “any self-organising, self-governing, adaptive, nonlinear, complex organism, organisation, community or system, whether physical, biological or social, the behaviour of which harmoniously blends characteristics of both chaos and order.”

By embracing both chaos and order, Hock quietly created one of the most powerful and widespread brands in the world. Please do take time and reflect on how this applies to your universe.