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Comment by ian0 | Hacker News Reader

Cant mention the history of Visa without mentioning Dee Hock [0], who analysed the ecosystem and deliberately structured it in a way where it could thrive despite the mixed incentives of all the parties that contribute to it [1].

This quote on why he resigned as CEO just as it was proven to be so successful:

>> "It’s the organizational concepts and ideas that were essential. I merely came to symbolize them. Such organizations should be management-proof.”

If you have dealt with large, completely incompetent organisations and wondered how the hell they actually keep going - theres your answer. If built correctly it's genuinely difficult to mess things up.

[0] https://en.wikipedia.org/wiki/Dee_Hock

[1] https://www.fastcompany.com/27333/trillion-dollar-vision-dee...

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> If built correctly it's genuinely difficult to mess things up.

...but that also implies that it can built in such a way that it's genuinely difficult to improve, too, right?

I worked in state government for a while, and I noticed that whenever the governor switched, all the upper management switched too. All the new people would be gunning to start some big initiative that would look good on their resume (and they'd not be around for the aftermath). There was a lot of institutionalized inertia resistant to these efforts, which I eventually decided was basically survivorship bias - anything not resistant to change would stumble and fail in the face of such regular (and often wasteful!) pet projects. What resulted was the stereotypical concept of bureaucracy today.

But here you are saying that such inertia can be designed into the system. Interesting...

Bureaucracy isn't necessarily bad.

The natural ebb and flow of political appointees in government is a great example of it. Good civil servants can make things go great.

Where government performs very poorly is typically where both the formal and informal leadership networks are not up to the task. Brilliant appointed leaders exist and can do amazing things. The informal leadership and machinery requires care and feeding, and tends to fail spectacularly when it's ignored or actively undermined.

> Bureaucracy isn't necessarily bad

I didn't mean to imply it was! What it is, however, is resistant to change. Often that's a feature, not a bug.

I've often generalized things as "govt is good at reliable, bad at efficient, while private industry is good at efficient, bad at reliable" . (The entire idea of competition is that companies can and will go out of business, switch markets, etc).

Thus, I personally approve of private industry where I care about efficiency more than reliability (say, garbage/recycling/compost pick up) and govt where I care about reliability over efficiency (say, childhood education). This is also why I personally oppose most "public-private partnerships", as they tend to take the reliability of private industry and add the efficiency of govt.

To agree to your point about leadership - most of the pet projects to arrive from upper leadership failed to last, often failed to ever get past early stages...but those projects that DID survive and became part of the new process were able to do so because enough people pushed for it long enough and hard enough, which serves as a decent barometer for what is important.

Here I've been associating govt and bureaucracy, but that's only a generalization - large corporations (and smaller ones, occasionally) can have plenty of bureaucracy, for the exact same reasons and with the exact same outcomes (both good and bad).

Another benefit of beauraucracy, which I think is understated, is that it might be our best antidote to corruption.

When you have a networked system of approvals and records, and people whose livelihood depends on them maintaining those records in good order, it can become more risky and expensive to buy favours and break the rules than to follow them.

But you need both a good beauraucracy, and a culture of civil servants that value honesty and good order and following-the-rules. A good beauraucracy can reinforce those cultural values, and vice-versa. But just one half is not enough.

I wanted to keep it very high-level so that a 10 year old could understand so unfortunately some things had to get left out; like Dee. I did link to his book as part of the further reading/resources at the bottom of the writeup though.

Thanks for the write-up. Liked the costco one too. Can I ask what the goal is for your page? There is no about page.

Glad you like it. No goal really, just a hobby to keep me busy.

That's cool. Apart from the article being good, the design of your page is very nice.

Thanks, I appreciate it

Thank you for this fascinating write up! I really enjoyed it.

awesome article, thank you!

It was such a well written article, both part 1 and 2. Subscribed to your RSS feed now.

One thing if you are interested you should look into is how Visa and MasterCard are basically shunted out of the next generation payment systems in China and India. It actually shows they just can’t keep expanding with economy as competitors either complexly bypass them (WeChat/Pay, Paytm) or the government builds their own (Rupay, UPI by NPCI) which leaves them trailing.

UPI is a system built by National Payments Corporation of India and it is now the most dominant payment system in India in less than just over 3 years since its launch. They support both offline and online payments and increasingly people are not even thinking about credit cards.

I’m still a fan of credit cards and their utilities but increasingly competition is catching up to established behemoths Visa and MasterCard.

> If built correctly it's genuinely difficult to mess things up.

Indian Space Research Organization (ISRO) [0], Indian Institue of Management - Ahmedabad [1], and (the not so known) Physical Research Laboratory [3], premier institutions in India, all of them founded by the same person - Vikram Sarabhai. Each of them stood the test of time.

Given the situation of all other government run institutions in India, ISRO is truly a marvel. Maybe "it's genuinely difficult to mess things up"!

[0] https://en.wikipedia.org/wiki/Indian_Space_Research_Organisa...

[1] https://en.wikipedia.org/wiki/Indian_Institute_of_Management...

[2] https://en.wikipedia.org/wiki/Physical_Research_Laboratory

(Maybe off topic but on topic of great management and people.)

He sounds like a great person.

This type of coolness I think also might apply to this person https://en.wikipedia.org/wiki/Georges_Doriot

Intersting. Eventually he left to farm a ranch west of silicon valley. His prose is poetry:

In his 1991 Business Hall of Fame acceptance speech Hock explained:

“ Through the years, I have greatly feared and sought to keep at bay the four beasts that inevitably devour their keeper – Ego, Envy, Avarice, and Ambition. In 1984, I severed all connections with business for a life of isolation and anonymity, convinced I was making a great bargain by trading money for time, position for liberty, and ego for contentment – that the beasts were securely caged.

so, he retired at 55. why is that mentioned in his bio as the most strange of things?

Usually people of that caliber don't willfully give up power.

George Washington

Agreed. I read his book as a young engineer, an I feel that this has really shaped how I view organisations and the forces that operate within them.

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