Companies & Industries

Tricks of a Master Motivator


Chairman Graham Weston of Web-hosting service Rackspace explains how employee engagement helped the company survive the financial crisis

Texas-based Web host service company Rackspace was hard hit last fall when Lehman Brothers declared bankruptcy, and the financial markets went haywire. The onetime startup, which had grown by over 50% annually over the years to become a company with 2,600 employees, had just managed to pull off an initial public offering when its stock price tumbled and its business slumped. One major reason Rackspace avoided a downward spiral was that it was able to keep its employees engaged throughout the downturn.

Now, the company's share price has returned to the level where it was one year ago. Here, Rackspace (RAX) Chairman Graham Weston shares his insights and strategies for keeping employees committed even when times are tough with Senior Writer Emily Thornton.

Drawing out each employee's strength is our core management strategy. When employees join Rackspace, they take a test to identify their strengths. I've taken it myself.

We concentrate on strengths because we want to be one of those companies that really adds to your life. To us, achieving greatness is every employee's job. We need each employee to give fanatical support to their customers. So we place a premium on employee engagement.

Employee engagement is not about crazy perks. Our work is more about how can we make you be at your best. How can we find a role that fits you? We believe that's a more sustainable model. Our philosophy is to say "look, you're who you are. Let's figure out how to find work that fits you." Whatever strengths you have, we're going to concentrate on making them great. It's very hard to change a weakness. It's much easier to improve a strength. Think of how hard it is to lose weight. That's a weakness that is very hard to change.

A year later you'll be heavier than you started because you're trying to change a weakness. It's so obvious. Strengths give you energy. If you have an aptitude for something, it's much better to say we're going to work on making your strengths great.

Full Disclosure Builds Trust

Transparency matters, so we pull people together and disclose all of the company's financial information. Its progress. Its trials. Its failures. Since we were founded in 1999, we've done this on a quarterly basis. During this recession, we made our meetings monthly. We tell people where we actually are rather than having them wondering. Because we share all of this confidential information, we have to consider every employee an insider which means the average employee cannot sell any of their shares in the company. But it's important, we think, to use transparency as a way to build up trust and confidence.

Then we lay the foundation for programs that will help people to contribute to the situation. We're in a terrible pickle in our industry, and there's a lot of negative energy. We wanted to find a way to harness that energy differently. So we said "hey folks we need your help. Don't wait around for a fat cat to help you. We need to look out for our interests." We held a big contest to come up with ideas on how to tighten our belt. That sort of program does more than just save us money. It gets people to start thinking about our business and about where the waste is. We gave a response to every suggestion, whether we pursued it or not. That helps people feel trusted and connected.

We also give constant feedback. At Rackspace, when anyone receives a positive e-mail from a customer, we share it with the entire company. When we win a new customer, we ring a bell. We pat ourselves on the back because it gives our leaders a chance to voice that this is what we want. It's a sense of clarity. It's a sense that if you want to know what this company wants from you, it wants to invite you to strive for greatness. It's not possible to be unless you really have a clear mission and people know they really play a role.


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