The Trillion-Dollar Vision of Dee Hock

It all started back in the late 1960s, when the credit card industry was on the brink of disaster. The forerunner of the Visa system — the very first credit card — was BankAmericard, which had originated a decade earlier as a statewide service of the San Francisco-based Bank of America. The card got off to a rocky start, then became reasonably profitable — until 1966, when five other California banks jointly issued a competing product they called MasterCharge.

Bank of America promptly responded, franchising BankAmericard nationwide. (In those days, banks were forbidden to have their own out-of-state branches.) Other large banks quickly responded with their own proprietary cards and franchise systems. A credit card orgy ensued: banks mass-mailed preapproved cards to any list they could find. Children were getting cards. Pets were getting cards. Convicted felons were getting cards. Fraud was rampant, and the banks were hemorrhaging red ink.

By 1968, the industry had become so self-destructive that Bank of America called its licensees to a meeting in Columbus, Ohio to find a solution. The meeting promptly dissolved into angry finger-pointing.

Enter Dee Hock, then a 38-year-old vice president at a licensee bank in Seattle. When the meeting was at its most acrimonious, he got up and suggested that the group find a method to study the issues more systematically. The thankful participants immediately formed a committee, named Hock chairman, and went home.

It was the chance Hock had been waiting for. Even then, he was a man who thought Big Thoughts. Born in 1929, the youngest child of a utility lineman in the mountain town of North Ogden, Utah, he was a loner, an iconoclast, a self-educated mountain boy with a deeply ingrained respect for the individual and a hard-won sense of self-worth. And he stubbornly refused to accept orthodox ideas: before he’d started with the Seattle bank he’d already walked away from fast-track jobs at three separate financial companies, each time raging that the hierarchical, rule-following, control-everything organizations were stifling creativity and initiative at the grass roots — and in the process, making the company too rigid to respond to new challenges and opportunities.