Book Description
"Managing a Consumer Lending Business" summarizes the lore and the knowledge of the business as the new century begins. It covers many subjects a good manager should know: the importance of how to attract enough good accounts to offset the inevitable bad accounts that every lender will get, controlling line sizes, encouraging use by good customers/discouraging or controlling the bad customers, managing profitability with predictability, if he or she is to effectively run a high-volume consumer business.
Customer Reviews:
Managing a Consumer Lending Business.......2007-07-14
I was looking for a solid foundation of facts and tried practices for retail banking employees could use to attrack new business. This book didn't offer that
Excellent book for beginners.......2006-12-10
To people who are entering the profession of consumer lending, this is an excellent primer. It gives a 360 degree view of the business from acquisition and management of accounts to collections, recoveries and profitability analysis. While it doesn't cover any one topic in great depth, it is an ideal book for people starting off in this exciting business. I wish David Lawrence would write many more books. He has the art of explaining concepts in a clear manner. I really enjoyed this book.
An Excellent Guide for Retail Banking Marketers Entering Lending Business.......2006-10-22
In market place, there are few books that are easy to understand but comprehensive to cover all respective area of consumer lending business. I have to say, this is one of the few. In the past, I acquired the personal lending knowledge from some credit scoring books with difficult math and serious multi-variable statistics. This title is not only easy even for marketing or sales persons to understand the basic concept but also good for new credit analysts or college/graduate students who just joined the business to have a whole concept. Strongly recommend this title to those who are in the marketing or business planning roles in retail lending business. It could help bridge the knowledge gap about the lending business and create some common langague with other functions, especially credit and collection. However, for those in credit function, this title is good for overall understanding but not detailed or comprehensive enough for risk management.
Good primer for analysts looking for more domain knowledge.......2006-09-06
Managing a Consumer Lending Business by David Lawrence and Arlene Solomon is a good primer I recommend for the readers of S4SAS.com and analysts working in the areas of consumer lending in general.
This book covers the fundamental principles of lending along with the practices at various product life cycles. While conducting SAS training, I observed that lot analysts do not know why managers look for some information and why they insist on certain format the information to be presented. After reading this book, the reader will have a background to understand the business requirements better and will be familiar with necessary lending related terminologies.
I found the following topics covered in the book useful for an analyst.
1. Overview to the consumer lending process and products.
2. Acquisition and direct mailing - segmentation, prescreen processes and practices.
3. The use of credit scoring, score monitoring and reporting process.
4. Portfolio Management and utilization of behavioral scores, strategy tracking.
5. Collection strategies and tactics
6. Private label credit cards and retail sales (dealer) financing.
8. Importance of Management Information systems.
Best in its Class.......2004-01-20
Managing a Consumer Lending Business is an excellent primer covering both fundamental practices and principles for safe and sound lending. This book covers the basics well and should be required reading for management trainees and those new to consumer lending. This 2002-published book is superior to older, now-obsolete books on consumer lending, and is spiced with anecdotes, quotes and references to mistakes that made headlines. The chapter on recessions is germaine and usually neglected by other books. The only criticisms are minor: a few too many references to the authors' consulting practice, and it would be improved by a chapter or two on securitization and the gain-on-sale practices.
Book Description
Today's most complete, up-to-date reference for controlling credit risk exposure of all types, in every environment
Measuring and Managing Credit Risk takes you far beyond the Basel guidelines to detail a powerful, proven program for understanding and controlling your firm’s credit risk. Providing hands-on answers on practical topics from capital management to correlations, and supporting its theories with up-to-the-minute data and insights, this authoritative book examines every key aspect of credit risk, including:
- Determinants of credit risk and pricing/spread implications
- Quantitative models for moving beyond Altman’s Z score to separate “good” borrowers from “bad”
- Key determinants of loss given default, and potential links between recovery rates and probabilities of default
- Measures of dependency including linear correlation, and the impact of correlation on portfolio losses
- A detailed review of five of today’s most popular portfolio models—CreditMetrics, CreditPortfolioView, Portfolio Risk Tracker, CreditRisk+, and Portfolio Manager
- How credit risk is reflected in the prices and yields of individual securities
- How derivatives and securitization instruments can be used to transfer and repackage credit risk
Today’s credit risk measurement and management tools and techniques provide organizations with dramatically improved strength and flexibility, not only in mitigating risk but also in improving overall financial performance. Measuring and Managing Credit Risk introduces and explores each of these tools, along with the rapidly evolving global credit environment, to provide bankers and other financial decision-makers with the know-how to avoid excessive credit risk where possible—and mitigate it when necessary.
Customer Reviews:
Must have for risk management.......2007-06-29
Yes, this is a must have. Written by S&P auther, it is the definitive guide, no question should be asked. cause they are credit king.
Many details on how to measure risk, quantitative methods in detail. Ideas and industry practice all in great detail. I could imagine some quants will use it as a cook book for their project.
overall, well written for easy read. both good for a glance at credit risk and for in depth learning of industry standard.
Most Appropriate for Basel II.......2005-09-08
If you are Banker/Banking Consultant then this book is the closest you will get to understanding Credit Risk from a Basel II perspective. Its clear & lucid style helped me understand the gamut of techniques used in Credit Risk Measurement. Unfortunately the Book does not get into the details of bulinding models so if your looking for a model building cookbook, look elsewhere.
a complete, robust and comprehensive valuable resource!.......2004-06-16
In Measuring and Managing Credit Risk, the authors provided a robust, complete and comprehensive treatment of several aspects of modern credit risk measurement and management. Written by two high talented practitioners, this book will become certainly a reference both for academics and practitioners thanks to its careful treatment of several not so known empirical issues which practitioners have to face everyday. At the same time, do not consider the book as a new recipes book for managing credit risk. Both authors already proved their deep knowledges of financial theory and establish once again, through this book, how advanced knowledges of theory combined with significant practical experience make leading researches. As a PhD candidate in Finance, actually writing on credit risk, I definitively adopted this book and higly recommend it for anyone dealing with credit risk issues either through a practical experience or through a theoritical work.
Amazon.com
For better or worse, most of us have at least one of the 720 million little plastic cards that are used each year to complete $860 billion worth of purchases at 15 million incredibly varied merchant locations throughout the world. This is a far cry from the humble beginnings of these myriad credit, debit, and charge cards, which just a few decades ago were generally a perk offered only to elite customers for the acquisition of fine meals, hotel rooms, department-store goods, and oil-company products. They are now so common and such an integral part of our economy, in fact, that few pay them much mind--a situation that makes David Evans and Richard Schmalensee's Paying with Plastic all the more interesting. Evans, senior vice president of National Economics Research Associates, and Schmalensee, dean of MIT's Sloan School of Management, meticulously trace the history of these cards from both the consumer and merchant perspectives in this surprisingly appealing volume, which will prove enlightening to anyone who ever wondered how plastic money works. --Howard Rothman
Book Description
The payment card business has evolved from its inception in the 1950s as a way to handle payment for expense-account lunches (the Diners Club card) into today's complex, sprawling industry that drives trillions of dollars in transaction volume each year. Paying with Plastic is the definitive source on an industry that has revolutionized the way we borrow and spend. More than a history book, Paying with Plastic delivers an entertaining discussion of the impact of an industry that epitomizes the notion of two-sided markets: those in which two or more customer groups receive value only if all sides are actively engaged. New to this second edition, the two-sided market discussion provides useful insight into the implications of these market dynamics for cardholder rewards, merchant interchange fees, and card acceptance. The authors, both of whom have researched the industry for more than 25 years, also examine the implications of the recent antitrust cases on the industry as well as other business and technological changes -- including the massive consolidation brought about by bank mergers, the rise of the debit card, and the emergence of e-commerce -- that could alter the payment card industry dramatically in the years to come.
Customer Reviews:
Great Overview.......2006-11-05
If you work in the payments, credit card or finance industry this book is great. It has a very easy to read history about credit cards, who knew Diners Club invented the category in the 50's. But more importantly is how the industry is moving forward and progressing.
Overall, this is a book you read if you need to, but I can't imagine anyone outside the industry reading it. You would have to be the most intellecually curious person in the world if you read this cause you were interested in how credit cards work.
Great book!!.......2006-01-04
I loved this book and how the author talks about the fine points of credit cards and how American consumers got hooked into it. A terrific read and it is money well spent, although FREE shipping would have been nice!
What's old will be new again.......2005-10-24
Paying with Plastic first edition has been revamped, rewritten and repositioned here with edition number two.
Most important, Paying with Plastic "2.0" addresses new developments of online payment processing. The authors correctly begin to question the requirement of a merchant set top box for reading "antiquated magnetic stripes".
"Old is new" item #1. Frank McNamara's Diners Club platform would cost about $50,000 to set up today. What's the next mutiny of merchants?
Old is new item #2. Sears starting up Discover and getting to more merchants tha American Express -all within 2 years. Moore's law (doubling within time) would suggest the next Discover would ramp up in less time.
Old is new #3. Industries in decline, lobby best. The payment industry's recently raised interchange rates. Does technology cost more?! No, but growth is stagnant.
Old is new #4. Whoops, John Reed (ex-ceo of Citibank) pulled their Visa membership (p14) and moved the Mastercard logo to the back. Why?! Pull the entire Citi into a closed loop - Citi wanted to be like Amex and Discover. There will be more banks doing this like Chase (Octogon) or MBNA (PayPass).
Old is new #5. Wal-mart as a bank. See Sears above in #2. Wal-marts pays fees to V/MC/D/Amex but they'd rather charge fees and lend money. Why just make $2.00 on the VCR when you can make $10 on the financing. By the way, I like the payment system name, "Wallycard"... just kidding.
A remarkable accomplishment.......2005-07-11
It is a very difficult and ambitious task to write a book about an industry combining indispensable facts and history, fundamental business aspects and subtle economic insights. Yet this is precisely what the authors have done for credit cards, the digital quantum leap in the evolution of payment instruments. It is a very rewarding and fun read, providing the equivalent of a comprehensive 3D animated view of the organization of credit card companies (not-for-profit associations like Visa or for-profit firms like American Express) and of the complex ecosystem that surrounds them: banks, merchants, cardholders, regulators, ATM networks, etc.
And the "lens" of "multi-sided platforms" that Evans and Schmalensee use to conduct their analysis turns out to be so appealing and insightful that one wonders how economists, policy-makers, business people and even casual observers managed to make any sense of this industry before.
Highly Recommended!.......2005-05-09
In this history of payment cards, David S. Evans and Richard Schmalensee provide an amazingly lucid account of a couple of unusual business models: the "two-sided platform," which in the use of payment cards means walking a tightrope between the interests of merchants and consumers; and the "co-opetitive," in which the bank members of MasterCard and Visa cooperate in developing industry practices while competing for business. The authors, who are both former Visa consultants, sound like your favorite college professors - up to date and extremely sophisticated, yet friendly and anecdotal (at one point, they describe a Shell gas station near MIT to make a point about competition among cards). They typically begin chapters with easily understood notions from which they methodically build complex structures of ideas and information. Another virtue of the book is its concreteness - although that occasionally devolves into repetitiveness - starting with an explanation involving electronic signals and following the paper path of what happens when you hand your credit, debit or charge card to a cashier. The authors even consider the design and manufacture of the cards themselves. We recommend this book as essential reading for those in the banking or payment card industries; and it's not a bad idea for card users to read it - which these days means you...and just about everyone else.
Product Description
Now in its second edition, this bestselling handbook has been fully updated and expanded in light of important changes to the new Basel II Accord. Now including new chapters and fresh topics such as the asset classes required under Pillar 1, the new required elements for capital adequacy and the minimum capital requirements for securitization and operational risk, credit risk mitigation, supervisory review and market discipline. Through trial and error, the three pillars have evolved and some of the original ideas have proved to be impractical. This popular handbook methodically identifies the fundamental changes and recent additions to Basel II, such as increased flexibility, risk sensitivity and new OpRisk capital charge. It provides a clear rationale for the revised accord and even covers those elements that are still excluded such as liquidity risk, reputational risk and legal risk. You are presented with a unique opportunity to learn about every possible consequence of the Basel Accord from global thought leaders and fellow practitioners such as: Scott D. Aguais, Sebastian Fritz, Erik Heitfeld and Dirk Tasche amongst many others. You will find yourself referring to this essential handbook on a daily basis and find its clear guidelines essential for rolling out and implementing all systems affected by the Accord's various regulations. Looking at the challenges banks face in complying with the new requirements of Basel II, this invaluable title quantifies the potential downstream impact of Basel II on the financial industry. In addition it assesses the degree of constraint the proposals are likely to impose on business and highlights the profound implications of Basel II on: * Rating agencies * Financial industry * Global and local competition * Costs and capital This book is essential reading for any financial practitioner affected by the Basel II accord, including chief financial officers, chief operating officers, chief investment officers, risk man
Book Description
Credit risk is today one of the most intensely studied topics in quantitative finance. This book provides an introduction and overview for readers who seek an up-to-date reference to the central problems of the field and to the tools currently used to analyze them. The book is aimed at researchers and students in finance, at quantitative analysts in banks and other financial institutions, and at regulators interested in the modeling aspects of credit risk.
David Lando considers the two broad approaches to credit risk analysis: that based on classical option pricing models on the one hand, and on a direct modeling of the default probability of issuers on the other. He offers insights that can be drawn from each approach and demonstrates that the distinction between the two approaches is not at all clear-cut. The book strikes a fruitful balance between quickly presenting the basic ideas of the models and offering enough detail so readers can derive and implement the models themselves. The discussion of the models and their limitations and five technical appendixes help readers expand and generalize the models themselves or to understand existing generalizations. The book emphasizes models for pricing as well as statistical techniques for estimating their parameters. Applications include rating-based modeling, modeling of dependent defaults, swap- and corporate-yield curve dynamics, credit default swaps, and collateralized debt obligations.
Customer Reviews:
This book is too quick for an introduction.......2006-05-14
I took a master level credit risk class with two assigned textbooks: this one and Quantitative Risk Management by McNeil et al. I love the second book more because it explains the fundamentals in a fabulous way; most of our lectures followed materials in McNeil's. As someone explained in another entry, Lando's book is like a survey book, which is very compact for a beginner.
Not bad at all..........2004-07-22
Contrary to other people, I have found the book very interesting and readable...The author is also referring to practical issues such as asset volatility estimation and CDO pricing..I think this book is more comparable to Bielecki-Rutkowsky kind of book, than to Schonbucher. It gives a good foundation of the theory, even if sometime I would have preferred to have more proofs of theorems.
Compact, readable and fairly complete.
A casual collection of models without sound understanding.......2004-07-20
The author briefly touched many models without quite understanding them himself (or checking their validity). Most of the text were collected (and rewritten) from reading the abstract or conclusion of the original papers. There is not enough insight or new info. It is absolutely not a book for someone who wants to learn because it is like a undergraduate's study report. If a book reviews many models, it should provide some insights, pros and cons of them, and at least some framework for other researchers to follow. It loses value if it merely rephrases some obvious and straghtforward assumptions of the original models.
I admire the author and the editor (Duffie) as researchers. However, the author is not ready yet to write a book of this kind and the editor has been a super star in finance, hence should not lower himself to this level for the sake of publication. This book does not provide useful info at all. Not good for a researcher or a practitioner (at all). Why not read the original papers' abstracts? That would be more informative.
A book for those who think Robert Jarrow is a lightweight!.......2004-07-02
Robert Jarrow praises this book! I think that tells you the level of this text. It's Ivy League Ph.D.-school material with inadequate background provided. I guess if you are already a director of research in an investment bank, this book provides a lucid and compact survey of the current state-of-the-art techniques of credit risk modeling. In short, this is a book written for people who already are comfortable with the subject at a very high level.
If you are a regular Schmoe like myself (someone comfortable at the Hull or Cuthbertson and Nitzche level) much of this book may zoom over your head. But if you regulary snicker at folks like me as derivatives dilatants and poseurs, I'd say check it out.
The book may be great. But for me it was a waste of money.
Did I mention that Robert Jarrow likes it?
Book Description
A cutting-edge text on credit portfolio management
Credit risk. A number of market factors are causing revolutionary changes in the way it is measured and managed at financial institutions. Charles Smithson, author of the bestselling Managing Financial Risk, introduces a portfolio management approach to credit in his latest book. Understanding how to manage the inherent risks of this market has become increasingly important over the years. Credit Portfolio Management provides readers with a complete understanding of the alternative approaches to credit risk measurement and portfolio management. This definitive guide discusses the pricing and managing of credit risks associated with a variety of off-balance-sheet products such as credit default swaps, total return swaps, first-to-default baskets, and credit spread options; as well as on-balance-sheet customized structured products such as credit-linked notes, repackage notes, and synthetic collateralized debt obligations (CDOs). Filled with expert insight and advice, this book is a must-read for all credit professionals.
Charles W. Smithson, PhD (New York, NY), is the Managing Partner of Rutter Associates and Executive Director of the International Association of Credit Portfolio Managers (IACPM). He is the author of five books, including The Handbook of Financial Engineering and Managing Financial Risk (now in its Third Edition).
Book Description
For lending professionals and individuals interested in learning how to get the loan they deserve. This book offers a practical, real-world perspective on the details of mortgage lending and provides the professional with a solid tool for assisting in the decision making process of granting or application for a mortgage.
Customer Reviews:
Great introduction to the industry.......2005-02-03
I recommend this book to all those who want to get familiar with the U.S. Mortgage/Residential Lending industry. This book provides a good historical perspective of the industry and its development in the U.S., and explains the mortgage process from soup-to-nuts - right from the application stage to the servicing and default management stage. As an industry professional, I have benefited a lot from reading this book. I have also recommended it to many friends and associates who have benefited a lot as well. The most appealing aspects of this book are that it is comprehensive, simple-to-read, and interesting.
Thorough review of mortgage lending development and practice.......2001-09-01
This is a must read and good reference book for mortgage professionals, including lenders and practitioners in secondary mortgage business. The book gives excellent review of the development of residential lending in US, of government regulations, major market players, and important product types. Then the book gets to the details of mortgage lending processes and also touches the secondary markets. Readers can definitely gain valuable and practical knowledge on residential lending business after walk through the book.
Book Description
The most cutting-edge read on the pricing, modeling, and management of credit risk available
The rise of credit risk measurement and the credit derivatives market started in the early 1990s and has grown ever since. For many professionals, understanding credit risk measurement as a discipline is now more important than ever.
Credit Risk Measurement, Second Edition has been fully revised to reflect the latest thinking on credit risk measurement and to provide credit risk professionals with a solid understanding of the alternative approaches to credit risk measurement.
This readable guide discusses the latest pricing, modeling, and management techniques available for dealing with credit risk. New chapters highlight the latest generation of credit risk measurement models, including a popular class known as intensity-based models.
Credit Risk Measurement, Second Edition also analyzes significant changes in banking regulations that are impacting credit risk measurement at financial institutions. With fresh insights and updated information on the world of credit risk measurement, this book is a must-read reference for all credit risk professionals.
Anthony Saunders (New York, NY) is the John M. Schiff Professor of Finance and Chair of the Department of Finance at the Stern School of Business at New York University. He holds positions on the Board of Academic Consultants of the Federal Reserve Board of Governors as well as the Council of Research Advisors for the Federal National Mortgage Association. He is the editor of the Journal of Banking and Finance and the Journal of Financial Markets, Instruments and Institutions.
Linda Allen (New York, NY) is Professor of Finance at Baruch College and Adjunct Professor of Finance at the Stern School of Business at New York University. She also is author of Capital Markets and Institutions: A Global View (Wiley: 0471130494).
Over the years, financial professionals around the world have looked to the Wiley Finance series and its wide array of bestselling books for the knowledge, insights, and techniques that are essential to success in financial markets. As the pace of change in financial markets and instruments quickens, Wiley Finance continues to respond. With critically acclaimed books by leading thinkers on value investing, risk management, asset allocation, and many other critical subjects, the Wiley Finance series provides the financial community with information they want. Written to provide professionals and individuals with the most current thinking from the best minds in the industry, it is no wonder that the Wiley Finance series is the first and last stop for financial professionals looking to increase their financial expertise.
Customer Reviews:
Don't waste your time.......2002-12-08
Working in the banking industry I was turned on to this book by a colleague and what a colossal waste of time reading this was. The vast majority of this book's models are outdated and if Mr. Saunders was trying to write a historical piece he has accomplished that in spades. Nothing in this book is relevant and it is obvious the esteemed Mr. Saunders lent his name to a very poor book that he probably should have glanced through if not read. Linda Allen should probably get some real world experience because she is wasting people's time with her research.
Good intro, but not enough details.......2000-06-21
I have a copy of this book. It covers popular credit risk models and things like RAROC, etc. These concepts have been discussed extensively in the industry but I assume this is the first in the book form. The book does a good job in presenting basic ideas. However, if you are looking for technical details, you best bets are still the original technical documentations (CreditMetrics, CreditRisk+, KMV, etc). Nevertheless this book is a useful survey of the current stable of models. Besides, it is not very expensive.
Good intro, but not enough details.......2000-06-21
I have a copy of this book. It covers popular credit risk models and things like RAROC, etc. These concepts have been discussed extensively in the industry but I assume this is the first in the book form. The book does a good job in presenting basic ideas. However, if you are looking for technical details, you best bets are still the original technical documentations (CreditMetrics, CreditRisk+, KMV, etc). Nevertheless this book is a useful survey of the current stable of models. Besides, it is not very expensive.
RAROC.......1999-12-27
I like the part on RAROC and KMV, interesting boo
Amazon.com
Birth of the Chaordic Age is a compelling manifesto for the future, embedded within the intriguing story of a personal odyssey. An engaging narrator, Dee Hock is the man who first conceived of a global system for the electronic exchange of value, becoming the founder and CEO of VISA International. He looks critically at today's environment of command-and-control institutions and sees organizations that are falling apart, failing to achieve their own purposes let alone addressing the diversity and complexity of society as a whole. The solution, Hock claims, lies in transforming our notion of organization; in embracing the belief that the chaos of competition and the order of cooperation can and do coexist, succeed, even thrive; and in welcoming in the chaordic age.
The underlying tenets of Hock's ideas are well illustrated by the incredible story of the birth of VISA International, an organization formed on chaordic principles that now links in excess of 20,000 financial institutions, 14 million merchants, and 600 million consumers in 220 countries. Hock deplores an age where ingenuity and effort are wasted on circumventing the rules and regulations of insular, hierarchical bureaucracies. In a bold-type subtext interspersed throughout the book, he examines how this situation is stunting our potential as individuals and communities and contemplates what can be changed. This rumination is propelled onward by "Old Monkey Mind" (Hock's own thoughts). Though the technique allows the reader to engage in stimulating mental discovery along with the author, its New Age spiritual tone is sometimes a bit saccharine. His insights, however, are clear and provocative. In the Chaordic Age, he contends, "success will depend less on rote and more on reason; less on the authority of the few and more on the judgment of many; less on compulsion and more on motivation; less on external control of people and more on internal discipline." Hear, hear. --S. Ketchum
Book Description
In Birth of the Chaordic Age, Dee Hock argues that traditional organizational forms can no longer work because organizations have become too complex. Hock advocates a new organizational form that he calls "chaordic, " or simultaneously chaotic and orderly. He credits the worldwide success of VISA with its chaordic structure -- it is owned by its member banks which both compete with each other for customers and must cooperate by honoring one another's transactions across borders and currencies. The book shows how these same chaordic concepts are now being put into practice in a broad range of business, social, community, and government organizations.
Customer Reviews:
Nature teaches us how to get organised.......2007-04-11
Dee Hock spend much time contemplating while being in nature, to which he felt strongly connected. Therefor it came as no surprise that he decided to organise his company, VISA International, following the structures of nature. The resulting enterprise showed flexibility and ingenuity, being able to rapidly respond to changing circumstances. The people it attracted grew a strong sense of responsibility and pride in their contributions. The interconnectedness and mutual trust laid a solid base for creativity and daring. Given the circumstances all were leaders at times and followers at others. A shared passion or spirit of relevance drove them further, growing VISA to a multi trillion business in the process. A beautiful example what can happen if we align ourselves with the forces of nature.
quick service, book in exceptional shape.......2005-08-31
not much to say other than the service was prompt and the book arrived in excellent condition.
More of a personal story than clear vision of chaordic orgs.......2005-03-26
Dee Hock is a man with a rich history. He relates a large part of that personal history in Birth of the Chaordic Age even though, he claims, this is not a story about him, nor about VISA International, although both figure prominently in the tale. The book is not so much a story at all, but a passionate manifesto for the future of business and society as a whole. If almost anyone else had written a book of such grand - perhaps grandiose - pretensions, we would quickly dismiss them. But Hock is known as the founder and former CEO of VISA International. He explains that he founded the organization on "chaordic principles". This business now connects over 20,000 financial institutions, 14 million merchants, and 600 million consumers in 220 countries. That's a compelling argument for allowing the man to speak.
Hock's book is a masterfully written broadside against the dominance of today's command-and-control institutions. He is far from alone in the outlines of his historical perspective. According to this, over the last three centuries we have increasingly sought to structure society according to reductionism, specialization, more technology, more efficiency, more linear education and processes, and more hierarchical command and control. The goal has been to create an organization in which leaders can pull a lever and reliably produce a desired result.
Hock goes further than most who share this perspective when he talks of the "dominator organizations" that have ordered resources and people so as to produce large quantities of uniform goods. Instead of the expected results, claims Hock, what we have produced is "obscene maldistribution of wealth and power, a crumbling ecosphere, and collapsing societies." This apocalyptically gloomy view may be trendy, but has only a passing resemblance to reality. (For a brief alternative view, see "The Truth About the Environment", related to this review.) Readers need not share Hock's assessment of today in order to learn from, agree with, and help to implement his alternative vision of chaordic organizations - those that are simultaneously chaotic and orderly.
The positive vision expounded on in Birth of the Chaordic Age sees organizations of the future as being the embodiment of community, based on shared purpose calling to the higher aspirations of people. Hock puts this general description into more specific form by explaining how a chaordic organization is formed by attending to six elements in the proper order: Purpose, Principles, People, Concept, Structure and Practice.
Hock claims that VISA was formed according to this description - the unusual organization is owned by its member banks, which combine competition for customers with cooperation by honoring each other's transactions across borders and monetary systems. If this is true, then you may persist in reading the book for its vision, despite some annoying peccadilloes, such as Hock's talk of "Old Monkey Mind" (his rational thoughts).
One of the best books on life and business I have read.......2005-02-22
I have two regrets after reading it. One that I can't give it more than 5 stars, and that I did not read it a long time ago. I read this book to learn more about Hock's views on complexity and organization, what he describes as a "chaordic system." While I met that purpose, I also discovered much more.
The personal narrative about failure and disappointment before Hock's leadership in the creation of VISA is something I needed to read years ago before I went through frustrating set-backs in my own career for related reasons.
What's more, Hock's understanding and recommendations for harnessing the power of complex systems is brilliant. If you could read only one book on leadership and complexity, I would strongly encourage this book to be it.
Part of what I find so amazing is that Hock is able to express a great deal of cutting edge philosophy and social science thinking as he tells a business story.
Read this book and share the ideas within with others!
A Fascinating Man, a Fascinating Story & a Bit of Frustratio.......2005-02-07
This is a book that is fascinating and frustrating by turns. It's about one of the most fascinating and effective and least written-about business executives in the world, Dee Hock.
Hock is the founder and CEO Emeritus of Visa. Visa is an organizational form unlike anything anyone had ever seen or, for that matter since. It combined the efforts of organizations that were normally at each other's competitive throats. But that's not all.
In the process of getting Visa to work, Hock and the other folks that he worked with, also managed to create the payment system that is Visa. To realize how big an achievement this is, consider the fact that the check-clearing system in the Federal Reserve still does not work with a fraction of the efficiency of the Visa-approval and payment-clearing process.
I'd known about Dee Hock for years, and I was fascinated by him and by the process that must have gone into establishing, actually inventing, Visa. I snatched up this book when it came out hoping that it would contain the story of Hock and the Visa adventure. It did. That story is compelling and well written.
But there's more to this book than that story, and the "more" includes lots of bits of value and many bits of frustration.
Take the title. Birth of the what Age? "Chaordic." Try looking that up in the dictionary. It's not there. Do we need a brand-new word to describe what Hock is describing? Maybe, but I'm not sure.
I'm quite sure I don't need some of the other strange things that he does with language in the book. There is, for example, "Thee Ancient One." That turns out to be a tractor. Then there's "old monkey mind."
Old monkey mind is the term that Hock uses in several different ways throughout the book. Sometimes it's used to refer to logical, linear, left side of the brain. Sometimes it's used to refer to old thinking patterns. Sometimes it seems to be a kind of alter ego for Hock with whom he has conversations.
That kind of language is cute but it's more appropriate to a book of whimsy. Here it gets in the way of understanding. And there's a lot here to understand.
Whatever else Dee Hock is, he is certainly one of the most fascinating intellects that I've come across. He's clearly a man of principle. He's had an amazing life, starting from poverty, rising to heights of business where he created one of the great financial institutions in the history of the planet. Then he walked away from that achievement with less ongoing compensation than Jack Welch's apartment rentals. Hock's mind is supple and rich and dips into sources that span time and geography and cultures.
Hock's life and the story of Visa are fascinating, and it pulls us along, but there's real meat in his observations about organizations and how they work and how they ought to work. There are penetrating insights into the ways that organizations have an impact on the Planet, on the economy, and on individual lives. There are insights and observations about what it means to be human.
In the end, I think this is really two books. One book is a story that goes from start to finish. It's the story of Dee Hock. It's the story of Visa. It's a fascinating story, filled with lessons and examples. It's worth buying the book that's between the cover for.
Then there's the other book that is a collection of bits of observation and thought. They're not presented in a coherent way, just plopped down into the story in separate chapters throughout the book. This is a book with less organization and more random insights. It, too, is interesting and worth the price of the book.
In the end, you can get two books - both wonderful, for the price of one.
Books:
- Managing Enterprise Content: A Unified Content Strategy
- Managing Risk in the Foreign Exchange, Money and Derivative Markets
- Mapping Security: The Corporate Security Sourcebook for Today's Global Economy (Symantec Press)
- Mastering the Trade (McGraw-Hill Trader's Edge)
- Mathematics for Finance: An Introduction to Financial Engineering (Springer Undergraduate Mathematics Series)
- Microsoft .NET Distributed Applications: Integrating XML Web Services and .NET Remoting
- Microsoft Office 2003: Introductory Concepts and Techniques, Premium Edition (Shelly Cashman)
- Modeling the Supply Chain
- Payment Technologies for E-Commerce
- Payment Technologies for E-Commerce
Books Index
Books Home
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- Gideon Lincecum's Sword: Civil War Letters from the Texas Home Front
- The Spiderwick Chronicles
- Human Anatomy & Physiology Laboratory Manual, Cat Version
- Looking for Life in the Universe: The Search for Extraterrestrial Intelligence
- New Babylonians: Contemporary Visions of a Situationist City
- The Tipping Point: How Little Things Can Make a Big Difference
- The Case of the Glamorous Ghost
- History: Fiction or Science
- Mardi Gras Treasures: Float Designs of the Golden Age
- Northwest Native Harvest
Banks & Banking
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Credit Scoring For Risk Managers: The Handbook For Lenders
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Subprime Consumer Lending (Frank J. Fabozzi Series)
The Bank Director's Handbook: The Board Member's Guide to Banking & Bank Management (Bankline Publication)
Paying with Plastic, 2nd Edition: The Digital Revolution in Buying and Borrowing
