CEO Summit: CorPorate culture

Recruiting & Retention
Henry Sauer

Leading HR for Rackspace over the past 10 years, Henry has experienced extreme growth throughout his time with the company (from about 400 employees in San Antonio to 6,000 employees globally). From a talent perspective especially, Rackspace exists within a highly competitive industry.The ability to attract and retain the team they need to build and sustain a successful, lasting company has been challenging, albeit a valuable learning experience.

Their business is fundamentally built on creating positive customer experiences and outcomes. Rackspace realized over time that they can’t effectively do that by commanding people — it’s tough to mandate good service. In truth, Henry shared that this happens through the discretionary efforts of their team.

Henry took time to highlight three big ideas that have served Rackspace well from the get-go:

1. Articulate a clear and inspiring vision for the company. For Rackspace, that is to be recognized as one of the world’s greatest service companies in existence.
2. Provide fanatical support to customers in an effort to accelerate success.
3. Take the time to clearly define and live up to company values. Rackspace has integrated these values within their retention and recruiting processes. For example, they provide a 3 day training program for new managers called “manager detox”. The intent is to help these leaders ‘unlearn’ some of the tactics they’ve used to manage people in other environments, and translate their skills to manage people at Rackspace based on company values.

Following that, Henry was very transparent in sharing three ideas that haven’t worked:

1. Road recruiting, where managers have run their own separate process to secure talent. They’ve ended up hiring the wrong kind of people as a result.
2. Agency hiring, where they outsourced the process of recruiting new talent outside of the core company. In most cases, they didn’t know/understand the Rackspace culture well enough. As a result, the agency identified people who weren’t a good fit. 
3. Using money as their sole retention agent. At the end of the day, the risk of employees leaving a company isn’t alleviated by cash alone. 

Three fresh ideas that have worked:

1. Promoting their referral program and making their referral program work. Currently, 30 - 40% of hires are made as a direct result of employee referrals.
2. Investing in their in-house recruiting team, which allows people who fully understand the culture to screen candidates and identify new hires.
3. Paying deliberate attention to optimizing their physical office space. They’re in an old shopping mall with a wide open floor plan, providing a ton of space for employees to congregate and collaborate. No one has an actual office, including the CEO.

Following Henry’s talk, the group discussed how closely tied retention is to the strength of the Rackspace vision. Henry shared that times when Rackspace has failed in delivering “fanatical support” have been when they’ve experienced the greatest culture and retention problems. This observation has led the company to purposely dial back growth at certain times to be sure support can always keep up with sales.

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EF CEO Summit

Presented by Rackspace

The CEO Summit is an ongoing series designed to support Austin-area CEOs in strategic, high-impact areas of their business. These invite-only events bring together CEOs from ventures of all stages to share tips and unusually candid advice based on real experiences.

For the first CEO Summit, held this spring at Austin's Capital Factory, we asked six executives to share their insights on CORPORATE CULTURE. Successful corporate cultures are key in attracting and retaining the best talent, promoting innovation and driving performance. As the stewards of corporate culture, CEOs must understand better than anyone else what promotes great culture, and what doesn’t.

The CEO Summit is organized by the Entrepreneurs Foundation of Central Texas, and is made possible through the generosity of companies like Rackspace and the Capital Factory.