Visa International has overhauled its management structure, scrapping one that it had concluded was inflexible and resistant to change.
The realignment, announced to staff members this week, affects virtually all aspects of the San Francisco-based company's strategic planning, project management, operations, and administration.
The changes have top management reciting the modern management mantra of teamwork, which is at the heart of the new structure. But officials also have had to address uneasiness among staff members wondering how they fit into Visa's most radical reorganization since the early 1980s.
While there has been no wholesale churning of personnel - familiar names fill most of the key slots on the organization chart, and Visa officials stress they have no downsizing or layoff plans - bureaucracies are being broken up, reporting lines are less rigid, and job descriptions more fluid.
About 2,200 people, half the Visa employment base, are directly affected by a decided flattening in the hierarchy. The effects are expected to filter through other parts of the organization, including Visa U.S.A. and the other Visa corporations around the world.
Visa Latin America is said to be furthest along in adopting the team- based precepts.
The aim is "to be responsive to an environment that requires both flexibility and speed," said Visa International chief executive officer Edmund P. Jensen.
"By instituting these changes, we are effecting a change in management philosophy, not just realigning functions and personnel," Mr. Jensen said.
The new approaches are centered in, and were engineered by, the products and systems groups that report to Wesley C. Tallman, who in turn continues to report to Mr. Jensen.
Emerging as Mr. Tallman's lieutenants in a renamed "strategic initiatives and processing services" group are the technologist William Chenevich, product development leader Francois Dutray, an as-yet unnamed head of operations and administration, and Christopher Schellhorn, the recently appointed president of the Visa Interactive home banking unit.
But Mr. Tallman, as president of strategic initiatives and processing services, is less concerned with traditional titles than with functions - as they apply to the people reporting to him and to the teams that will form around specific projects, only to be disbanded and reconstituted around different needs as they emerge.
For example, Mr. Chenevich relinquishes most of his oversight of day-to- day operations to take charge of a business and technology strategy group. He will have three people reporting to him; only one - Todd Chaffee, in the emerging-technologies unit - is in place.
Mr. Dutray, who as head of initiative management will oversee the execution of strategies and the handing off of programs to the regions, supervises four sets of initiatives: information under Deborah McWhinney, infrastructure under Wolfgang Heinrich, electronic commerce under Linda Elliott, and relationship environment under Peter Gustafson.
The last pertains to "relationship cards" and any other products that might strengthen Visa members' ties to customers. Mr. Gustafson helped lay that groundwork managing debit and smart card activities.
The operations and administration group includes the "process functions" of applications development (managed by Chris Beckstead), processing and network services (Ronald Olive), quality assurance and testing (Gretchen McCoy), and program management (Una Somerville).
Ms. Somerville, recently the project manager for the Visa Cash smart card launch in Atlanta, will play a key support role in the handoff of programs from the initiatives group to the regions.
Mr. Tallman said Visa set out to demolish the inflexible, "functional silos" that tended to form around products and become self-perpetuating bureaucracies. He envisions a leaner headquarters staff, reallocating resources to teams built for specific purposes. Team members are chosen according to their skills; members are redeployed upon projects' completion.
"We took the basic strategy that we had, and the organizational structure did not match up with the vision we had of our future," Mr. Tallman said in an interview.
He described the new organization as future-oriented, "a zero-based, bottom-up approach, rather than being top-down and self-pertuating."
In decrying "silos" and bureaucracies, Mr. Tallman sounded much like H. Eugene Lockhart, president of the rival MasterCard organization. Mr. Lockhart launched MasterCard on a top-to-bottom culture change process in early 1995, the operative words including openness and teamwork.
Visa has not done anything so sweeping since its devolution of power from headquarters - where both the Visa International and Visa U.S.A. staffs are based - to what are now five other autonomous regional bodies. That decentralized, "reverse holding company" structure was introduced in 1981, reflecting the vision of Dee W. Hock, Visa's first president, who retired in 1985.
Visa has continually wrestled with power-sharing issues. Visa U.S.A. entered decentralization with the biggest staff and storehouse of expertise, and other regions had to come up to speed. In recent years, product development swung back toward centralization under Mr. Tallman, whose concern about responsiveness was a key reason for the current steps.
Mr. Tallman said the restructuring decisions have been in the works more than six months in a project known as Visa 21, a reference to the coming century. It was managed almost entirely in-house with a great deal of employee input. Consultants were brought in only "to help us organize a discipline to accomplish the goals."
"The troops were frustrated by our hierarchy and wanted change," Mr. Tallman said. "They are happy now, but want to know where they fit in the new organization," which has been the subject of group and one-on-one meetings all week.
An outsider who had recently been in contact with Visa executives said "people were nervous" in anticipation of the announcement.
Mr. Tallman reported receiving positive feedback in employee meetings, and a string of congratulatory E-mails. One Visa International staff person described the changes as "exciting."
A consultant familiar with Visa, Stephen White of the White Consultancy in Atlanta, said the realignments "are sure to affect a lot of folks." He was unable to judge the effectiveness of the flatter organization, but said, "They were on the right track if they wanted to become more nimble. It's fair to say they needed that."
Mr. Tallman said all the executives in key positions on his organization chart had fully bought into the new structure. Several high-profile Visa managers are not there, for various reasons.
International marketing, headed by John Bennett, reports directly to Mr. Jensen, indicating the strategic standing of the Visa brand and image.
Richard Lonergan, an executive vice president and electronic commerce expert who reported to Mr. Dutray, will have a "market response" assignment, reporting to Mr. Tallman on initiatives that require special attention.
Richard Hagadorn, who was executive vice president of credit products, will be joining Mr. Chenevich's strategy group.
