The CEO to CEO podcast is hosted by Kevin Campbell, CEO of Syniti.
This week's guest, Kevin Jones serves as Chief Executive Officer of Rackspace Technology. Kevin Jones is an accomplished business leader with 30 years of technology services experience and has led a number of global mergers acquisitions and divestitures, with an impeccable record for also leading business transformations.
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Kevin Campbell (01:10):
Welcome to this week's CEO to CEO podcast, and today I'm very excited and pleased to have on Kevin Jones from Rackspace. Kevin is the CEO at Rackspace, and we're excited to have you on Kevin.
Kevin Jones (01:26):
Well, thanks Kevin, for having me. I'm really glad to be here.
Kevin Campbell (01:30):
How about if we start with you telling us a little bit about your career journey and how you ended up at a CEO of Rackspace. You've done EDS, HP, Dell, HPE, DXC, and MV Transport along the way. Tell us a little bit about that journey.
Kevin Jones (01:49):
Yeah. Happy to. I've been in the technology industry for over 30 years. You mentioned some of the companies that I worked for. Most of my time, Kevin, has been spent in change, some type of change, either a turnaround, integrations, spin-offs, go-privates or IPOs. Most of my career has been the United States. I did spend six years in the UK and then I lived two years in Asia when I was running the Asia Pacific and Japan business for HP Services. Right before I joined Rackspace technology, as you mentioned, I had a terrific experience as CEO of MV Transportation. It was awesome. It was a company in a completely different industry.
Kevin Jones (02:32):
We were actually a customer of Rackspace and Rackspace moved us from our aging data centers, all over the world to a multi-cloud environment. Rackspace did a great job for us. They were amazing. We moved to the cloud successfully. Team hit all its deadlines and we saved a lot of money. So, it was great when, roughly 19, 20 months ago, I got a call to join as the Rackspace Technology CEO. I knew the company from competing against it for a couple of decades, so I jumped at the chance and it's been a blast. I mean, by far and away, the best company and team I've ever been a part of and wake up every day, excited to work with the best technologists in the industry.
Kevin Campbell (03:19):
If you look back on your career, pick out a couple of highlights or key learning points for yourself.
Kevin Jones (03:27):
It's interesting. I don't know, maybe it was 11 or 12 years ago, Kevin, I saw a quote, right? I was reading in my living room and I saw this quote that changed my life. This quote was, "If you have a 10-year strategic plan, why not accomplish it in six months?" To me, that was just really, really very empowering because I thought about it, and if you look at the actual amount of time that most actions take, it's not really that much, right? The problem is that a lot of people have too many priorities. They're given too many priorities and just human nature causes work to fill the elapsed time given, right?
Kevin Jones (04:08):
For example, if we give someone a month to do something almost without fail, right, almost every time it'll get done on the 31st day. Right? It's just how things work. That was something that was a life-changer for me, and also I'm just a huge believer in focus, right? When I came to Rackspace, for example, the company had 10 corporate priorities. Now I don't know about you, Kevin, but I cannot do 10 things at one time. Right? We reduced our focus to three and we said, "Look, we are going to be just the best in the world at these three things. We're going to stop work on everything else.
Kevin Jones (04:46):
We focus relentlessly. We set up really quick, sprint-type timeframes, went fast and the results were pretty good. Right? Just over a year later, got customer satisfaction at an all time high. We've had five record sales quarters, and we took the company public.
Kevin Campbell (05:03):
Not bad, in what, 18, 19 months. That's a lot to accomplish. Maybe step back a second and just, for people who might not be as familiar as I am with Rackspace, tell us just a little bit about Rackspace. What's your mission and purpose? Then, maybe tell us a little bit about how you differentiate yourself in the marketplace.
Kevin Jones (05:26):
Yeah. Happy to. Thanks. Our mission at Rackspace Technology is embrace technology, empower customers and deliver the future. What I mean by embracing technology, is that we're always going to be developing and exploring new technologies and mastering the most important ones for our customers. Empower our customers means we help our customers achieve their business outcomes, working with them, every step of the way. Deliver the future is exactly what we do for so many customers. And we really do it faster than they can do it themselves.
Kevin Jones (05:59):
Now, Rackers rally around this, right, because they understand it and it's what we do every day. That's our mission. In terms of how we're different, right, how we're different from our competitors. It's pretty interesting, Kevin. We're in a unique spot, right? We're on our way to becoming the leading pure play multi-cloud provider, so we've got a significant headstart on our competition and we've got really, I would say five major points of differentiation. The first is automation. We've got the highest automation in the industry and customers love that, right, because it really helps with quality pace, and this is because of our software, right?
Kevin Jones (06:41):
We've got the software called Rackspace Fabric. It's really the platform of the business. It's how we operate the company. Hundreds of thousands of customers are on it. So, you think of Rackspace more as a software-enabled business. We're not a heavy labor business like Kevin, you and I have managed a lot of these companies in the past. This is really much more of a software-enabled company. The third thing is fanatical customer experience. This is a deep in the DNA of the company, going over and above the call of duty to make sure customers are happy. Fourth is we're an end-to-end player for clouds.
Kevin Jones (07:19):
We do the upfront consulting, technology roadmaps. We do the middle part of a cloud engagement, all the integration and migration work. Then finally, we do the managed services at the end. The end-to-end nature of our service is really important for customers, so that we maintain continuity and knowledge of their environment. Then finally, scale. We've got 120,000 customers in over 120 countries and growing fast, so those are really our major differentiators.
Kevin Campbell (07:50):
I've heard referred to your employees, referred to as Rackers. I know there's a fair amount of passion amongst your Rackers. What as CEO, what do you think you need to focus on to get, right, so that they can be successful along with the software and automation that you have?
Kevin Jones (08:09):
Yeah. It's a great question. We'd love our Rackers. They are passionate and incredibly technically gifted amongst, amongst other things. And we have a lot of fun. But for me, Kevin, the most important thing I think one has to get right, as a CEO is your people and their priorities. Right? I do think strategy's important. I think longterm goals are important, but the most important thing to me is what our 7,000 Rackers are working on and what they're focused on. Have to have the right people working on the right things at the right time.
Kevin Jones (08:44):
What we did to help here, Kevin is we deployed a management system. Our management system is very focused and includes an intense cadence of meetings, all of our KPIs and performance indicators, to make sure we can make decisions, allocate resources accordingly. This discipline is vital, right, particularly when you're transforming and when you're going through change, I mean, left unchecked, my view is people will work on what they think is important and it's crucial, right, that we all stay aligned on what the business priorities are. So, for me, it's priorities.
Kevin Campbell (09:19):
You went public, as you mentioned recently. Congratulations on that. That's huge feat. How is it being a public company?
Kevin Jones (09:27):
It's great. It's great. I love it. I know Kevin, you've spent most of your career in managing very large organizations and public companies. I love it. I mean, I'm very proud, like you said, and thank you for saying that. I'm proud of what the team's accomplished with the IPO, particularly to do it during a pandemic. I mean, I think it's just a great accomplishment. We're in a great market. Team's performing well. We're really pleased to be able to do that. We just announced a sensational third quarter, with the highest revenue in the history of the company, highest sales in history of the company. We raised guidance across the board for 2020. We're in a fantastic market, tectonic shift in the industry to multi-cloud. Our team's executing well. So, the future is really, really bright for us.
Kevin Campbell (10:17):
Wow, and doing that in the middle of a pandemic, as you pointed out, is quite amazing. Speaking of the pandemic, what do you think that the impact that's had on your business, or maybe even the adoption of cloud, because everybody wants or asks me all the time, so I'd like to get from you, what's the impact of the adoption of the cloud based on the pandemic?
Kevin Jones (10:40):
Yeah. The pandemic was, it was a pretty interesting turn of events, right, because if you look at our transformation journey, we really wanted to go public, and then we were handed to the pandemic in February, March. Just to take a step back here, I actually have personal experience with pandemics. I lived in Asia 10 years ago when H1N1 was raging.around the region, actually contracted the disease when I was there. It's not the most fun I'd ever had, right, with H1N1, but I got over it in about a week. It wasn't a huge deal, but I did learn a lot, right?
Kevin Jones (11:17):
I learned a lot about how pandemics move across countries, the effects of quarantining, although I never thought I would ever use that knowledge again. Just thought it was one of these bad things that happened to me, but you fast-forward 10 years later, and I don't know how you felt Kevin, but December and January when we saw COVID-19 start to pop up, my antenna was up, right, because my previous experience. So, we started testing our processes and our systems in January and February, because I knew the most important thing we had to do was protect our Rackers, right? That was my number one priority.
Kevin Jones (11:52):
So, if we had to flip the switch and go to work from home. We had to make sure that we could continue to operate the company and our 120,000 customers could continue to keep running. So, we tested, tested, tested. March 9th, we started working from home. Went off without a hitch, seamlessly, no disruption to any customers, no operational issues. It was absolutely brilliant. Since then, what we've seen from the pandemic is, first of all, our productivity has increased. Our customer satisfaction has increased.
Kevin Jones (12:22):
You've seen our sales pipeline and sales results, right, continue to accelerate. Really, this is because what the pandemic did, is it just reinforced customers need to save money. The cloud is great for that, right? Customers, in a lot of cases, had to scale way up in some industries or way down in other industries. Cloud's great for that. Then, also some customer's businesses were irrevocably changed, right? Brick and mortar, in some cases, wasn't working anymore, so they had to pivot to new business models. Multi-cloud is great for that. All of those things together really helped us just to continue to accelerate the momentum that we already had.
Kevin Campbell (13:05):
What your status of return to office around the world today?
Kevin Jones (13:11):
Yeah. Great question. Look, we've extended work from home to the end of March, at least the end of March 2021. Now, we have opened a few satellite offices, 10% capacity, just for some countries where the pandemic is currently under better control, but we're going to monitor this very closely and we're only going to open if it's really, really safe and we've got the right protocols in place. We'll be really, really, quite careful here. There's no reason for us to rush into it, and we have to protect our Rackers.
Kevin Campbell (13:45):
Let's talk about M&A. You've had a lot of experience with M&A over the course of your career. What role does M&A play in the past for Rackspace and what role might it play in the future?
Kevin Jones (14:03):
Well, look, I'll definitely talk about M&A and I would love your view too, Kevin. You are an M&A genius, right? I know from what you did with Accenture and other businesses, you've probably forgotten more about this than I'll ever know. But look, M&A to us is, a core part of our strategy, right? We look for deals where one plus one can equal three. If you look at what we've done since our LBO four years ago, we've acquired four companies. We just acquired another one and it's really helped revolutionize our service offerings.
Kevin Jones (14:36):
When we buy a company, we add it to our platform. We love the benefits we get from the people that come over, the capabilities, the customers. If you look at the deals that we've done, they've helped us enter some new markets, create new revenue streams, get ahead of our competition. M&A for us, we're looking for acquisitions, companies that are growing, right, that can have an accelerated impact on our blended revenue growth. That's important. Also, we like acquiring businesses because they bring in exciting talent.
Kevin Jones (15:09):
For example, this Onica acquisition that we did just over a year ago was spectacular, right, incredibly successful. Now what we've done is we've got an integration playbook. We've got an Integration Center of Excellence, that we used for Onica. We're now using it for Bright Skies, the acquisition we did in central Europe a few weeks ago. We'll use it for future acquisitions.
Kevin Campbell (15:29):
When you're looking for an acquisition candidate, what do you think is the look for the perfect candidate, if there is such a thing out there, or maybe what are the things that you say, "Hey, if this exists, it's not going to work." How do you spend not too much time looking, because that's part of the trick for you and I, is to make sure you spend time on it, but not too much time.
Kevin Jones (15:54):
Yeah. Yeah. Look, I mean, first of all, if you look at our go- to-market strategy, one of the things that we're trying to do and is trying to do is move the tip of the spear more to professional services, right? The advisory consultancy, a lot of things you're very familiar with. If we can find additional professional services capability, that's fantastic. If we can go and find targets that are, that have technologies where the puck is going, right, like internet of things, right? Artificial intelligence, machine learning, data edge, that's really a huge plus. Applications, right, application modernization. Growth. Obviously we talked about that.
Kevin Jones (16:37):
Geographic expansion is something else. As multi-cloud continues to accelerate all over the world, geographic expansion, if we can acquire companies that get us into different countries, that's awesome. Then finally, partnerships. Our business model here at Rackspace Technology really treasures our partnerships. They're very strategic to us. If there's an acquisition target, that's got particular relationships in a part of the ecosystem that we like, then that's another important factor.
Kevin Campbell (17:11):
What about, you already talked about the importance of culture and the strong culture of your Rackers. How do you get guess or at least make an educated thought that somebody's going to be able to fit into that culture and be additive to it?
Kevin Jones (17:31):
Yeah, it's a great question. I mean, look, we spend a lot of time with the targets and we try to be really, really open and transparent about our culture because I do think it's the number one, most important thing to make an acquisition successful. I don't know if you agree, Kevin, but I really think this is critical. We invite them in, we have lots of conversations, and because we've got a very unique culture at Rackspace, right? We are fanatical. It's an extremely passionate workforce, extraordinarily technical. We invent things, right? We're also quirky and we have a lot of fun.
Kevin Jones (18:09):
That usually makes us a really attractive acquirer. Typically, we found this a strength. We haven't found any potential companies that we were looking to buy say, "Well, I don't really like that culture." Everybody adores it, so far, anyway. But we have to make sure, right, that the two cultures are going to match because we're very entrepreneurial here. If we've got a company that maybe isn't as entrepreneurial and it's probably not a great match. The other thing that's important is that the people that we bring over, right, that they understand what great career opportunities they could have.
Kevin Jones (18:46):
Because, to me, it's very important to retain the executives from the companies that we're acquiring. These are incredible people, entrepreneurs, ambitious people that have built businesses, a lot of times, from scratch. We want to make sure that they feel like they've got a great place where they can be entrepreneurial and where they can continue to be technical, if that's what they want to do as well, and they can thrive in that environment.
Kevin Campbell (19:10):
Exciting. I got to imagine though, from everything I've heard about Rackspace, you guys have an exciting culture. I would imagine that a lot of people are excited to join. That's a real plus, a selling point for you in the process. Let's switch to one of my favorite topics, which is data. What role does data play in the Rackspace go-to-market?
Kevin Jones (19:34):
Oh, it's huge. Right. This, and I just think we're scratching the surface, and this is why you're in such a great business, Kevin. We're big believers in data. Incredibly, right, as you know, 90% of the world's data has been created just in the last couple of years, but only 1% or less is analyzed. Enormous data out there that can be mined, can be used for insights. In terms of internally, I'll start there first and then maybe we can talk about how we interact with customers in it, but internally I'm all about data, right? I'm a financial guy.
Kevin Jones (20:05):
I really like a lot of data. In the management system that I talked about earlier, data is very important, so we can make fact-based decisions, right, and we can make sure that we hold ourselves accountable for our goals. So, data analytics very important. One of the positions that I created when I came to Rackspace was Chief Data Officer. We got an amazing executive in this role. His team is using all the data in ways we never had before. We've got propensity models all over the place now, propensity for customers to buy more, propensity for customers to churn or be unhappy.
Kevin Jones (20:43):
Lots of other data, as well as just the basic KPIs we use to run the company. Yeah, we love data. We love to use it to operate the business, and I actually think it's been one of the keys to making our management system so successful.
Kevin Campbell (20:59):
Externally, how do you take that knowledge you've learned internally and now help your customers turn data into insights for their businesses?
Kevin Jones (21:11):
Yeah. Great question. If you just think about our offerings, just to tell you how important data is to us, we've only got four offerings in the whole company. Multi-cloud is one offering. That's private and public cloud, application security and data. It's one of four, and really what we help our customers with is we help the customer's decision-makers analyze the data, leverage the data, using lots of toolkits, including AI and machine-learning. The data services that we offer our customers, data monitorization, artificial intelligence, machine-learning. By the way, that's a great service offering for us because we've had so much success internally, right, having the highest automation in the industry. Analytics and business insights is another offering. We have data strategy and governance and then data management.
Kevin Campbell (22:06):
That's great. Let's wrap up with two of the favorite questions I like to ask all the CEOs we have on, which is, what's your thought on mentoring and what have mentors done from you over the years?
Kevin Jones (22:24):
Mentors have been critical. From a critically important, I am a huge believer in the power of mentors and their impact on developing leaders. My advice for people when adopting mentors is to be proactive, right? Speak up. Personally, for the last 30 years, how I've approached this is, I've never given my mentors a chance to say no. I just adopted them. Right? I just did it, just start a meeting with them, asking their advice, being relentless. It evolved. Sometimes mentors, for me anyway, sometimes mentors know they're my mentors and sometimes they have no idea or they might not even know me.
Kevin Jones (23:05):
A lot of times I'll just copy people. I'll look at what they do. I'll study it, if they're good, right? What I found over the years, is there's very few people, who've got everything, right? There's usually bits of people that are really, really strong. What I've tried to do over the years, is find the best of each executive. For example, the best financial CEO that I ever knew was the HP CEO, Mark Hurd, right? He was unbelievable. The best operational CEO I ever knew was Ron Rittenmeyer of EDS.
Kevin Jones (23:40):
The best customer-oriented CEO I ever knew was Meg Whitman of eBay and HPE. Still to me, to this day, the best technological strategist that I know is Michael Dell. Then, there's dozens and dozens of other folks all over the world that, I've really just tried to take the best of what they're great at and try to adopt some version of that for myself.
Kevin Campbell (24:04):
I think that take the best and leave the rest, is one of the things I've tried to do too. Last thing is career advice. What's the best career advice you've ever gotten?
Kevin Jones (24:17):
Kevin, the best career advice I ever received was, basically what to look for when picking leaders, right? When you pick your leadership team, what are the most important characteristics to look for? Because as you know, right, it's really all about the team. If you've got a great team, you can do anything, right? You can change the world. I have really 11 major leadership characteristics that I sent around to the company and that we all talk about. I'll talk about the top three, which to me, are 75% of the jobs. If you can do these top three, then to me, that's a huge gate that you've passed at 75% of the job and also completely controllable, completely controllable. You don't need any special talent. You don't have to be born with, born a genius or anything like that.
Kevin Jones (25:05):
Anybody can do this. Number one, the first thing I look for when choosing a leader is, will this person take responsibility, right? Will they take responsibility or will they be the type of leader that when the going gets tough, they'll make excuses, right? They'll point at others, blame others. That to me, is the most important thing. I've got somebody who's going to take responsibility, then I know they've got a great chance of taking the [inaudible 00:25:33]. By the way, I can usually tell within two or three minutes of meeting someone, if they're the type of person that will take responsibility or not. That's number one.
Kevin Jones (25:40):
That's by far, to me, the most important. The second is execution. Again, like responsibility, completely controllable. It still baffles me why this is so difficult to get right. If you look at the global workforce as a whole, not at Rackspace, we crush it with execution, but in general, execution to me is just very simply can the person execute or do you need to follow up to get things done? Just very simply. You've got those people, the people that you assign stuff to, you know it's automatic, right?
Kevin Jones (26:09):
It's going in, it's going to happen. Then, the folks that you're not sure. Right? THen you got to, maybe you're going to have to remember to follow up with them. Those types of folks don't usually do as well in my organizations than folks that can execute. Again, completely controllable. It's all about doing what you say you're going to do, and it builds trust over time. This is probably, Kevin, why they say, "Strategy is nice, but execution is worshiped." Right? It's really, really quite important, I think. Then the last one for me is pace. Will the person move at lightning speed? Right?
Kevin Jones (26:43):
I'm Unforgiving about wanting to go fast, lightning speed. As you know, Kevin, in our industries, this is how we were brought up, right? If we didn't move fast, then our companies would fall behind and eventually die. Right? We were trained to this as we kind of grew up in these companies. Particularly in technology, if you're not moving fast, you're going to have a struggle, but if you can, you can get ahead of the competition, and it's just much more exciting place to work, I think, if you're going fast.
Kevin Campbell (27:11):
I agree. I always tell my team that management's job is to be impatient, right? Because, we've got a specific period of time and we've got to move quickly. Kevin, thanks for being on. Really enjoyed talking with you today and I think you gave a lot of great advice for our audience. Thanks for being on with us, and everybody, thanks for joining us on this episode of CEO to CEO podcast and join us next time when we'll talk to another great CEO.
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