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

I reach into my folder and I pull out a mirror that I carry with me. And I hand it to that person and say, "Would you look into the mirror please?"

You really do this?

Absolutely. Then I say, "That's they." Don't tell me what the problem is, tell me what the answer is. And if you don't tell me what the answer is, I'll tell you the answer and you won't like it. I submit to you that if more people handed out mirrors and more people looked into mirrors and said, "There is no they, it's me," we would all be much better off.

So we've got Irish setters and hand mirrors. Why would people buy into this philosophy and culture?

If you ask, "What really makes VeriFone different?" the answer is simple: We practice what we preach. People see constant reinforcement, on a day-to-day basis, of what we stand for. We almost have a religion -- and I use my words carefully -- of "Do as I do, not do as I say."

I communicate this to my people all the time: Life at VeriFone is not a spectator sport. You have a deep and fundamental obligation to live your professional life according to the VeriFone philosophy. If you don't like the philosophy, or if you think the philosophy is right but that Hatim is not following it, then you have a deep obligation to speak out. If you don't speak out, you have no right to complain.

What we're trying to cultivate in this company is moral authority. When I have moral authority, I can do anything. That concept is not understood very well in corporate life. People look for bullshit authority, not moral authority.

I know you worry that people who study VeriFone overemphasize technology. But the company could not exist without its electronic infrastructure. How is e-mail at VeriFone different from e-mail at other companies?

E-mail is powerful in this company because there are no exceptions. There is no paper. There are no secretaries. Period. I was interviewing someone recently from a very large bank. I told him about our e-mail system and he said, "Oh yeah, no problem, we have e-mail at the bank." And I asked, "Is every man, woman, and child on the e-mail? Does everyone in the bank have the power to e-mail anyone in the bank, regardless of rank? Does anyone in the bank have the power to send a message to everyone in the bank worldwide, just by hitting the equivalent of I_Staff in our company?" He said: "Oh no! The e-mail prerogative only goes from the CEO down three levels." Talk about people drinking their own bathwater! That's absolutely pathetic.

We put information into people's hands that most companies would be appalled by. We just don't see abuse. And it's more than information. We use e-mail very strongly as a vehicle to express emotion. I can't be more emphatic about this.

How do you express emotion over e-mail?

We do it every day. We recently had a major win in a market where we hadn't been having much success. Against all odds, we went after a big customer and won. When I got word that we had won -- and I'm so enmeshed in the organization that people just ignore the hierarchy and e-mail me that kind of news -- my first reaction, apart from pure joy, was: Why did we win? My next question was: Who are the key people who made the difference? Then I immediately sent out a message of congratulations. The e-mails and phone calls I got back were enough to make my eyes moist. That to me is what makes us tick. That's emotion.

What you're saying is that e-mail is not just an information system, it's a social system. It transmits the values of the company.

Exactly! Not many people think of it that way, but that's exactly what it is. I resonate with that big time.

So what are the rules of good citizenship in this social system? And what constitutes unacceptable behavior?

It's not all that different from a country. It's a free society. Which means we trust you. Which means there are no rules. Which means we expect you to behave responsibly.

It's interesting. As I think about the evolution of this company, it's almost like the evolution of a new democracy. People learn how to handle freedom. When we were younger, we had far more breakdowns in the social system than we have today. We used to see some of these e-mails, I tell you at times they almost made me cry. I'm a very emotional person. And I could see out-and-out abuse. You don't think I was tempted to clamp down? Of course I was -- it's very easy to revert to totalitarianism. But we stuck with it. And we are a much stronger company for it.

That's the spirit of the electronic infrastructure. What about the power of it? Can you demonstrate to skeptics that an online company is a more competitive company?