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Why Rackspace Was Named One of FORTUNE’S 100 Best Companies To Work For

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We at Rackspace got some great news this morning: FORTUNE magazine ranked us No. 29 on its annual list of 100 Best Companies to Work For. This is our sixth time to be named to this prestigious club in the last seven years, and the highest ranking that we’ve achieved. This recognition is a reminder that creating a great company culture is only half the battle. Sustaining it is a constant challenge.

It’s humbling to think that other companies now look to Rackspace for insights into how to build and nurture a great workplace. In that spirit, I’d like to share a few things we’ve learned over the years from our experience and from studying other great companies. I hope to shine a light on a few of the elements that make Rackspace such a special place to work, and to inspire you and your company to find your own way onto — and up —next year’s list!

Perhaps the most important lesson we learned, early on, was to appreciate how vital company culture was to the success of our business. We started 15 years ago as a managed hosting company, helping companies run their websites and handle other digital computing chores. At first, like other IT companies you might have dealt with, we did everything thing we could to keep customers at arm’s length. We basically refused to talk to them. But we eventually realized that we could distinguish ourselves from our rivals through exceptional customer service.

Check out this video for a glimpse of Rackspace’s culture:

The lesson that quickly followed is that great service cannot be commanded — it has to be volunteered. When we chose to make Fanatical Support our central value and our key differentiator, we had to create a work culture that would empower employees at every level to do what they judged necessary to delight customers. We authorized them to spend the time they deemed necessary, and even to spend money in the form of service credits. We encouraged them not just to have a transaction with a customer, but to also build long-term business relationship. That approach allowed our Rackers to be heroes for their customers, which makes anyone feel good. What’s more, it makes them want to volunteer their best.

In business we often talk about “discretionary effort.” It’s when you stay late to finish something so that a customer wakes up the next day to a solution, not an unsolved service ticket. It’s when you go that extra mile to bolster your team’s commitment to a project. It’s when you see a problem, take ownership of the solution, and move forward even if those responsibilities aren’t in your job description. Fanatical Support gave us a way to encourage and harness discretionary effort. More than that, it made volunteering their best the norm for Rackers.

Every day, Rackers are empowered to come in and wow our customers. Our belief is that if we put the right Racker with the right specialization and expertise in front of the right customer, he or she will deliver extraordinary results. Rackers believe this, and our customers know it. In a recent tweet, Ed Guiness – aka @KiwiCoder – told the world that Rackspace’s customer service had “ruined” him for other providers. That’s marketing you can’t buy or force, and it all comes from a time when Ed had to get in touch with an expert and picked up the phone, started a chat, posted a tweet or sent an email and someone stepped up to take ownership of the issue.

Some companies espouse great corporate culture and strive for engagement mainly as a way to reduce employee churn and encourage applications, both of which reduce recruiting expenses. And to be sure, we see those benefits from our efforts. But for Rackspace — and I imagine this is true at other companies on FORTUNE’S list — striving to create a place where employees burn to offer up their best work is integral to our business. It’s what allows us to deliver Fanatical Support, which is the main reason customers do business with us.

Do we sometimes fall short in our culture and in our support? You bet we do, every day. You can see many of our wins and losses on our Twitter feed. We’ve sometimes slipped by denying Rackers the resources they need to serve customers well. Maintaining a winning workplace gets harder as our company gets bigger and more dispersed across the U.S., Europe, Asia and now even Australia. But the magic thing about a strong workplace culture is that it stoutly defends itself. Rackers speak up on behalf of their customers, and on behalf of the resources they need in order to serve them. Our Rackers always pull us back to our values. And our customers, by telling us about their evolving needs, always pull us toward our future.

We’re honored to share a place on the FORTUNE 100 Best Companies to Work For list with so many great companies (two of which we’re proud to call our neighbors here in San Antonio: USAA and NuStar Energy). We’ve learned from many of them over the years. And in the spirit of open collaboration, we’re glad to share our lessons learned. Every great employee deserves a great place to work. The greatness of the people who call themselves Rackers is what drives me to come in each and every day and provide them the best possible place to invest their time and expertise.

— Lanham Napier is CEO of Rackspace.

About the Author

This is a post written and contributed by Lanham Napier.

Lanham Napier was the CEO of Rackspace from 2006 to February 2014, and now serves as a consultant to the company's leaders. As CEO, he avidly promoted the workplace culture that drives the company’s famed Fanatical Support®. This passion for empowering customers has made Rackspace the acknowledged leader of the open cloud.

Napier joined Rackspace in April 2000, a couple of years after its founding. He recognized early on that the company’s employees—dubbed Rackers—and its unique culture of customer service, would be the keys to its success. Napier strove to give Rackers the same exceptional support that they provide to the company’s customers. That approach has won Rackspace recognition by FORTUNE® magazine as one of the 100 Best Companies to Work For, and by Bloomberg Businessweek as a Top 100 Performing Technology Company.

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  • Chris

    Reading this makes me even more excited to start with Rackspace in a few weeks.