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Business Ideas: 3 Business Lessons From Visa Founder Dee Hock
Today we’re going to look at how a former brick mason refused to settle for less than he felt he deserved and went on to build one of the most successful financial companies in the world. This is the story of VISA founder Dee Hock and the top 3 lessons that you can learn from his success.
“Money motivates neither the best people, nor the best in people.” – Dee Hock
Dee Hock (born 1929) is the founder and former CEO of VISA. In 1968, when credit cards were first starting to get popular, Hock convinced the Bank of America to release control over their BankAmericard credit card program. He started a new company to control the credit cards. It was called National BankAmerica and later changed to VISA.
Hock came from a modest household. His father was a utility lineman and after marrying his high school sweetheart, Hock’s first jobs were working in a slaughterhouse and for a brick mason. He became interested in the banking world and walked away from three separate jobs at respected financial companies because he thought they were too hierarchical and controlling which limited his creativity.
Hock went looking for an opportunity to build a different type of organization, one that valued the creativity and enthusiasm of its employees. The result of this plan was VISA. Today VISA has over $8 billion in revenues and processes over 60 billion transactions per year.
Action Item #1: Hire People Different From You
Action Item #2: Be A Leader
Action Item #3: Empty Your Mind
“Failure is not to be feared. It is from failure that most growth comes; provided that one can recognize it, admit it, learn from it, rise about it, and try again.”
“If you don’t understand that you work for your mislabelled ‘subordinates,’ then you know nothing of leadership. You know only tyranny.”
“Given the right circumstances, from no more than dreams, determination, and the liberty to try, quite ordinary people consistently do extraordinary things.”
Fortunately, there are a number of techniques for handling risks. The nature of a specific risk and the circumstances (extent of exposure, available resources, and so forth) often dictate which technique, or combination of techniques, is most appropriate. Basically, there are five methods for dealing with risk. It is easy to remember these by thinking of the acronym STARR.
Sharing—Sometimes, when a risk cannot be avoided and retention would involve too much exposure to loss, we may choose risk sharing as a means of handling the risk. By sharing risk with someone else, an individual also shares potential losses. That is, the individual’s own loss may not be as great if it occurs, but the individual may have to pay a portion of the losses experienced by others.
Transfer—Risk transfer means transferring the risk of loss to another party, usually an insurance company, that is more willing or able to bear the risk. Some non-insurance transfers of risk occur, such as when one agrees to assume the risk of another under the terms of a written contract.
Avoidance—As the name implies, this technique deals with risk by avoiding the risk in the first place. This usually means not undertaking an activity that could involve the chance of loss. For example, by never flying, one could eliminate the risk of being in an airplane crash.
Reduction—Sometimes, when risks cannot be avoided, they can be reduced. Risk reduction can work in one of two ways: it can reduce the chance that a particular loss will occur, or it can reduce the amount of a potential loss if it occurs. For example, installing a smoke alarm in a home would not lesson the possibility of fire, but it would reduce the risk of the loss from the fire.
Retention—Retention simply means doing nothing about the risk. In other words, people assume or retain the risk and, in effect, become self-insurers. For example, the insured would pay a smaller portion of the loss than the insurer, such as paying a deductible.
Critical Illness Insurance Broker | Dr. Marius Barnard, Creator of Critical Illness Insurance
A message from D. Marius Barnard, the creator of Critical Illness Insurance, speaks about why he was compelled to create a financial plan that acts as a financial doctor to assist patient in their overall recovery. If you are interested in Critical Illness Insurance in Canada, please contact us.
Financing your Family Business without Going Broke
Financing is indispensable for the success and growth of your family business. But after you’ve already tapped out your personal funds, and perhaps those of friends or other family members to get your business up and going, you’re going to have to find a way to keep the lights on without going broke.
That means you’re going to have to borrow money or obtain credit from a variety of institutional lenders. Business loans and lines of credit will allow you to cover expenses, buy new equipment, manage cash flow, purchase inventory, create new products or services, or expand your business when the circumstances are right.
If your business is new and doesn’t have an established credit history, you may need to provide collateral to secure a loan or credit line. This could be any personal assets that you cannot otherwise monetize or afford to spend on the business, but can be utilized as security. Your best bet would be to approach a local bank or credit union where you have a personal relationship and a history of sound money management.
If your business does have a positive credit history for at least a year or two, the commercial bank that issued your business credit card is a good place to go to apply for a line of credit. Make sure that you’ve paid the balance on that card promptly each month, and if necessary, let the bank know that you’ve been shopping around and intend to move any accounts to the lender that can provide credit with the best terms. Most banks will want to keep you as a customer.
Regardless of the age or reputation of your family business, or where you go for financing, you’re going to have to prove to every lender that it is a financially solid concern, with the capability of long-term survival. So make sure you have all your paperwork in order, including all financial and tax statements, all profit and loss history, as well as a list of contacts for credit references.
You’ll also need to provide a pro forma to each potential lender. This will be a description of how you intend to utilize your loan or line of credit, how it will affect your cash flow, and how you anticipate paying back the money you’re going to borrow.
Once you’ve secured funding, make sure you stick religiously to a repayment schedule. As you continue to display credit worthiness, you will be able to increase your credit limit, borrow at more favorable rates, and most important, keep the business going without going broke.
Al Krulick is an award-winning journalist with dozens of years of writing experience. He writes and blogs for Debt.org.
“Succession Planning for a Family Business” Part 1 of 3
Michael Gray interviews attorney John Hopkins for Financial Insider Weekly about how to determine which child gets what proportion of your family business and some unique issues that come up when planning for the future of your family business. Part 1 of 3.
Part 2 of 3
Part 3 of 3
Prospecting and Philanthropic Planning
Author Margaret May Damen, CLU®, ChFC®, CFP®, Founder and President of the Institute for Women and Wealth and two faculty members from The American College discuss who the most likely prospects for philanthropic planning services are and how to find them.
James Olan Hutcheson on “The Six Reasons Why Family Businesses Fail”
James Olan Hutcheson describes the six reasons for family business failure: a poor business concept; inexperienced management; poor planning; inadequate capital; inadequate financial controls; and “the family effect”.
Dirk Junge on Family Enterprise Governance
What leads family enterprises to succeed and flourish across generations? Dirk Junge describes family enterprise governance as the key factor for longterm success.
Powerful Questions and Listening – the tools of succession planning by Family Wealth Coach
You know the old saying, “Children should be seen and not heard?” If ever there was a time to discredit that saying, it is when you’re in the midst of succession planning.
We’ve all had that feeling when you sense that your input is not as legitimate as other’s in the room. It can be incredibly intimidating for heirs when there are multiple generations at the table. It’s critical that you foster an environment with your heirs where that feeling isn’t allowed to take hold, and where their input is just as valued as others in the room.
It can be a serious problem if people feel like they “aren’t being heard.” How can you create a succession strategy if people aren’t communicating? If there isn’t powerful communication then it may be difficult to know what matters to your heirs, and what makes them tick. You may not know what tools or resources they might need, and it could be incredibly difficult to get a grasp on the pressures they feel. And the reverse is equally true. These are all things you want your heirs to understand and know about you, as well.
The most compelling tools of succession planning are powerful questions combined with powerful listening. Powerful listening doesn’t mean just sitting quietly and “listening” so that you can then jump in with a response. Powerful listening is about trying to hear more than the words—it’s about trying to hear where those words are coming from. What are the motivations behind those words? Ask open-ended questions, and wait for a response—and then listen.
It’s also important to keep in mind that sometimes too much respect can really impede communication. If 1st generation wealth holders are held in reverence by the 3rdgeneration, then that 3rd generation may not communicate openly. We understand that it can be difficult for the 3rd generation’s views to be taken as seriously as the 1stgeneration’s. After all, the 1st generation has had far more experience. But keep in mind that one day it will be the 3rd generation making all the decisions, so it’s critical that they feel like they are “being heard” in order for the succession plan to work smoothly.
The Wealth Report 2013: Examining High Net Worth Individuals from around the world
Creating wealth, it seems, is hardwired into us as a species. The total number of HNWIs around the world is increasing once more, despite the global economy still suffering from the aftershocks of the credit crunch and the ensuing financial crisis. much of this wealth creation is taking place in the world’s new economic powerhouses, but london and new york are still considered the most important cities for the super-rich — at least for now…
Emerging Market Insights – Jorge Mariscal – UBS Wealth Management
Jorge Mariscal, UBS’ Wealth Management’s Regional Chief Investment Officer for Emerging Markets, explains the reasons why it is interesting to invest in these markets now, than it used to be. The main reason for this is that historically emerging markets may have been associated with instability and lack of certainty regarding development. However today many emerging economies are actually less volatile than developed ones, enjoying lower levels of debt, moderate inflation and better fiscal accounts.
Investors based in developed economies tend to underweight emerging markets is because of a more general human tendency to invest in what is familiar. This instinct, however, to favour the familiar over the unknown can lead investors to miss out on growth opportunities elsewhere, and to overvalue domestic assets over international ones.
Davos 2013 – (Bloomberg) No Growth, Easy Money — The New Normal?
No Growth, Easy Money — The New Normal?
How do investors and policy-makers navigate in a world of loose monetary policy and low economic growth?
This session was developed in partnership with Bloomberg Television.
• Ray Dalio, Founder and Chief Investment Officer, Bridgewater Associates, USA
• Anshu Jain, Co-Chairman of the Management Board and the Group Executive Committee, Deutsche Bank, Germany; Co-Chair of the Governors for Financial Services Industry for 2013
• Jin Liqun, Chairman of the Board of Supervisors, China Investment Corporation (CIC), People’s Republic of China
• Pierre Moscovici, Minister of Economy and Finance of France
• Brian T. Moynihan, Chief Executive Officer, Bank of America, USA
• Ignazio Visco, Governor of the Bank of Italy
• Francine Lacqua, Editor-at-Large and Presenter, Bloomberg Television, United Kingdom
The American Family Financial Crisis
Some pretty alarming statistics of the American family’s financial reality. Let’s all change this with one step at a time and make sure that you have a process for making smart financial decisions in your life. It’s time to take charge of our finances and reverse this trend.