Chaordic Commons
July 20, 2003 | Governance
Another business structure worth investigating is the Chaordic Commons. This system was invented by Dee Hock, who founded VISA International. You may have heard of their credit card. It's described in his bio: "In 1968, he developed the concept of a global system for the electronic exchange of value and a unique, new form of organization for that purpose: a decentralized, non-stock, for-profit membership institution to be owned by financial institutions throughout the world. In 1970, the first portion of that organization, VISA U.S.A., was founded, followed by VISA International in 1974. It is now a $1.75 trillion enterprise jointly owned by more than 20,000 financial institutions in more than 220 countries and territories.
Lots of good links on their page.
Comments
Have puzzled over Chaordic Commons. Couldn't figure out if it was New Age hoohah or a real theory of governance. What do you find transferrable in it?
Posted by: The Happy Tutor at July 20, 2003 02:46 PM
Couldn't agree more. Haven't used it myself. The primary recommendation is that VISA is successful - I didn't know their business structure was so unusual.
Posted by: Michael J. at July 20, 2003 03:06 PM
What the hell is a "chaord"? Turns out it come from "chaos", and "order". They have a nice picture on the website. Sound a lot like the concept of "the edge of chaos" which I get from Roger Lewin's Complexity, Life at the Edge of Chaos. This book contains a nuanced theory of complexity and chaos that suggests that practically everything interesting happens in this transition zone (evolution, intelligence, etc.), and that complex self-organizing systems seek out and follow this phase transition.
I'm reading their 2001-2002 Annual Report to Owners and only half way through I see many synergies with what we have been discussing here and at WB as well as Organis, something being developed with other network friends. It looks like becoming an "owner" is little more than joining and agreeing to honor the organizations founding principles:
Principles of Practice
· Work to ensure that all people, by right of birth, have adequate necessities of life, including clean air, water, food and shelter; an equitable share of wealth and resources; and opportunity to develop their full physical, mental and spiritual potential.
· Work to ensure that human capacities, technologies and organizations sustain and support, not systemically alter, degrade or destroy, the Earth, its diversity of life or life support systems.
· Work to ensure interdependent health and diversity of individuals, communities, institutions, cultures and other life forms.
· Resolve conflict cretively and cooperatively without physical, economic, psychological, social, or ecological violence.
· Freely and fully exchange information relevant to the Purpose and Principles unless doing so violates confidentiality or materially diminishes competitive position.
Principles of Organization
· Be open to Owning Membership by any Individual or Institution subscribing to the Purpose and Principles in conducting activities of Terra Civitas and the Chaordic Commons.
· Have the right to self-organize at any time, on any scale, in any form, for any activity consistent with the Purpose and Principles.
· Conduct deliberations and make decisions by bodies and methods that reasonably represent all relevant and affected parties and are dominated by none.
· Vest authority, perform functions, and use resources in the smallest or most local part that includes all relevant and affected parties.
· Educe not compel behavior, to the maximum degree possible.
All very transferrable in my book. Thanks.
Posted by: Gerry at July 21, 2003 10:43 AM
These are good "soft skills" for organizational development (much needed in our world) but having digested that aspect we still have the problem of organizing within legal and financial structures defined by state law. This is a real challenge.
When LLC's first became available, most advisors (lawyers and accountants) didn't recommend them because they were untested in the courts as regards liability and whatnot. Then, the operating agreements were expensive to draft because there was no boilerplate language to draw from. Now, you can set up an LLC professionally for $500 - $750 (nothing fancy). Or buy the Nolo Press books for $50 and figure it out for ourselves. But this is a recent development.
Even now, my advisors, some of the brightest independent professionals in this Ivy League town, are not sure what to make of my thoughts for forming a software Co-op. "Why not just do an LLC?" they say.
Posted by: Michael J. at July 21, 2003 03:13 PM
