At VeriFone It's a Dog's Life (And They Love It!)

Hatim Tyabji is sitting at a small conference table in his office in Redwood City, California, about 25 miles south of San Francisco. This, it should be noted, is nothing short of miraculous. As president and CEO of VeriFone Inc. http://www.verifone.com, Tyabji is a perpetual-motion executive. He travels up to 400,000 air miles per year -- visiting customers, cajoling employees, sizing up markets. When he's not in the air, he's working on his laptop. That's because he has banned all secretaries and paper correspondence at VeriFone. Tyabji receives more than 100 e-mails per day and conducts all business -- from granting raises to approving budgets -- through the company's electronic infrastructure.

At the moment, however, Tyabji is talking about Irish setters. Specifically, he is pointing to a poster on his office wall. The poster consists of twelve blocks, each with a photo of an Irish setter. The first 11 blocks show the dog standing, thoroughly oblivious to a command to "sit." Finally, in block twelve, the Irish setter sits. "Good dog," reads the poster.

"To me, that is the essence of leadership," Tyabji declares. "Human beings are worse than the Irish setter. Leadership is an ongoing, nonstop, continuous process. I can't get disillusioned when I say 'sit' and nobody sits. So I just keep repeating the message."

It's working. In North America today, it is virtually impossible to eat at a restaurant, rent a car, or stay at a hotel without your credit card experiencing a close encounter with a VeriFone terminal -- the hardware (and, increasingly, software) through which retailers "swipe" credit cards to receive authorization from Visa or MasterCard. That's increasingly true in the rest of the world, too; sales outside the United States are growing by 50 percent each year. Since 1990, the company's total revenues have doubled to more than $300 million.

But what VeriFone does is not nearly as remarkable as how it does it. This is a company that knows what it stands for. Hatim Tyabji's job is to remind his people when they forget. Four attributes define the VeriFone business model:

• Global Reach. Tyabji declares that VeriFone has no corporate headquarters, recognizes no national origin, and is at home everywhere in the world. It generates roughly one-third of its revenue and stations more than half its workforce outside the United States. This global reach creates enormous advantages over the rag-tag band of local companies against which it competes.
• Location Independence. Like their CEO, VeriFoners spend lots of time in airplanes and at their computers. It's all part of an obsession with "forward deployment" -- a drive to stay physically close to customers. One-third of VeriFone's 2,500 people are away from the office at least half the time. The very concept of "the office" doesn't count for much. VeriFone executives live wherever they choose. Tyabji has a home in northern California, but VeriFone's chief information officer lives in Santa Fe, New Mexico, and its head of human resources lives outside Dallas. Why? Because they like it.
• Electronic Knowledge Network. How does such a radically decentralized organization hold together? Through robust computer networks. All corporate information is available online, worldwide, for immediate access. The company's top 250 people, for example, track sales down to the last week, the last day, even the last hour using RevWatch. Another database tracks which people speak what languages -- a useful tool for solving the day-to-day communication headaches that come from doing business around the world. Another system posts the travel itineraries of everyone in the company, including flight details, hotel reservations, and phone numbers.
• Time Compression. VeriFone calls it the "culture of urgency," and it is the company's ultimate battle cry. Tyabji boasts that VeriFone has achieved a 24-hour workday. Software projects, for example, routinely follow the sun. Programmers working in Bangalore, Paris,
  Dallas, or Honolulu ship code back and forth to keep the development process moving while they're sleeping.

Applying these principles has made VeriFone a devastating competitor. In 1986, when founder William Melton recruited Tyabji to become CEO, the company was privately held, had revenues of about $30 million, and was barely breaking even. Today VeriFone is 12 times as big, is growing by 20% a year, and is publicly traded (with a market value of more than $600 million). Last year, the company shipped its 4 millionth system. Its market share in North America is a stunning 60 percent.