“Maintaining our culture is my number one stress factor,” says Lanham Napier, President and CEO of Rackspace Hosting. As the leader of one of FORTUNE’s 100 Best Companies to Work For, Napier knows a thing or two about creating great cultures. In the following interview, Napier reveals  why process takes a back seat to relationships, who he calls his “all-time business hero” and why companies should have a “fun budget”.

When you hear the term ‘Empowering Employment’ what does that mean to you? When I think about Empowering Employment, I really think it’s about positioning people to do their best and do great work. As individuals, we will all build on our strengths so that we can do great work, and what we as a company do to create the right conditions under which Rackers can do great work. I think it’s really the intersection between a company and an individual on a journey to greatness.

Technology skills are some of the most in demand right now and probably some of the hardest to come by.  What is Rackspace doing to recruit this segment of the workforce? In our company, we recruit based on values first and then technical aptitude second. Technical aptitude can be something a candidate already brings to the company or something we test for and then develop later. We have an in-house training program, Rackspace University (RU), to help people develop their technical skills. The nice thing about technology is that it’s always moving so there’s always a new piece of work Rackers [Rackspace employees] can sink their teeth into.

There’s clearly this culture of creativity and innovation at Rackspace.  How do you maintain that culture? Maintaining our culture is my number one stress factor, and here’s why: I care more about building a great company than I do a big company.  When I look at the world, there aren’t that many big companies I would actually want to go work for. I want to work in great companies. I want to work in a company that’s loved by its employees and loved by its customers. At Rackspace, we’re committed to building a great company. Our culture has to create the right conditions where Rackers willingly volunteer their best. The number one factor in building that culture is the manager, because the manager shapes the team, how it operates, and the norms within any given team unit. Number two, we try to keep small teams. When a team is small, everybody knows each other, there are personal connections, and you work for the people on that team. The vast majority of interactions take place down at a team level, and the manager is responsible for that team. So we are proportionately investing our culture resources into building great managers.

How do you maintain communication between teams? We do lots of things where we have town halls, we have off-sites, we have what we call the “fun budget” so departments get to take time together to connect with each other. We give them the freedom and latitude to create connections because, ultimately, it’s about helping maintain a personal experience here. Our company is relationship-based, not process-based.

Aside from technical skills, what are the soft skills that you really value in employees? Number one: A willingness to serve. Number two: Being able to commit to our company and cause ahead of themselves. Number three: Commitment to greatness and wanting to do great work – not just really good work. Number four: Passion. Our company’s full of passionate people who care about each other, technology, and our customers. Somebody who has those attributes is going to do very well here.

You speak so passionately about the culture at Rackspace and growing Rackspace.  Are there industry leaders that you look to? The reason I’m passionate is that I actually love these people. They’re great people. They walk through the door every day, trying to do good work to take care of their families and save for retirement, and put their kids through college.  So this is what life is about: to try to make these advances for our families. Probably my all-time business hero is Herb Kelleher, the founder of Southwest Airlines. What I admire about the leadership at Southwest is that they’ve figured out how to help people to do great work through their culture.

What advice do you have for peers as they seek to fill the skills gap and foster job growth at their organizations? In terms of filling the skills gap, it’s about creating a workplace where special people want to show up and do great work. The only way to win the talent war we are currently in is to start with great people to begin with. This means you have to have a culture where people want to show up and volunteer their best. After that, it’s about taking the time to really invest in people so that we can close whatever gaps are present. We need to hire people who have the capability and then invest in that capability so that they can follow through and deliver.