It’s been just over 100 years since Henry Ford ignited a labor revolution — and throttled up his company’s productivity — by, in part, introducing the eight-hour workday to his some 14,000 employees.
Now, a much-smaller enterprise is borrowing a page from that history.
One year ago today, during a year in which Tower Paddle Boards made the Inc. 500 list of the fastest-growing companies in America, it implemented a workday of just five hours. Think that’s a joke? It’s not. The company’s CEO and founder, Stephan Aarstol, states unequivocally that it’s been a productivity booster. He’s even written a book about the policy, “The Five-Hour Workday: Live Differently, Unlock Productivity, and Find Happiness,” a self-published effort scheduled to be released in July.
The short day is also, of course, a recruiting and retention tool. Furthermore, it underscores Tower’s purpose, which is to build itself into a major beach lifestyle brand. But there’s a more world-view business principle behind the short-day policy.
“Everybody intrinsically understands the idea that if you put constraints on [spending] money, you’ll get better results,” says Aarstol. “What people don’t realize is that you should put a constraint on time as well.”
The common workday of eight or nine hours “trains the work force to be lazy,” he says. “Time is like a sponge. If you have eight hours to do something, you take eight hours. But if you tell people to get the same amount of work done in five hours, they start working at a faster pace and find creative solutions to stuff.”
Aarstol famously appeared on the ABC reality show “Shark Tank” in 2012. Billionaire entrepreneur Mark Cuban agreed to give him $150,000 the company needed in order to pay off a loan, in exchange for a 30% equity stake in the company — despite Aarstol losing his train of thought and freezing up for an agonizing minute-plus during his presentation on the show.
That year before that, Tower had generated $260,000 in sales. Five years later, annual sales are expected to reach almost $10 million in 2016. That compares with $7.2 million last year, so the short workday doesn’t seem to be getting in the way of growth.
Meanwhile, there is a catch to this story. Tower Paddle Boards has just 10 employees (an 11th will come aboard next week). Three manage shipping from a warehouse and staff a small retail storefront. The rest are not even involved with the paddleboard business, instead focused purely on developing new business streams.
There is also a working factory that’s used only to produce prototypes of paddle boards, while the manufacture of the company’s actual products is outsourced overseas.
But Aarstol insists that the way he went about implementing the five-hour workday offers lessons even for large companies. He initially told his workers that it was a three-month, “summer hours” experiment. The message was: “This summer you’re going to have your afternoons off, but in exchange for that I want you to figure out how to do what you do in just five hours.”
He says, “Any company could find a benefit from doing that. You’re going to find a lot of solutions in that three months for how people can work faster.”
There is no lunch hour at Tower Paddle Boards, which means there’s also no “after-lunch coma,” Aarstol says. The employees at the warehouse and store work from 9:30 to 2:30, while the others, who work at a separate headquarters site, are in from 8:00 to 1:00. “They’re not actually working all that much less,” he says. “It’s just a bit more of a compressed day.”
Much of the improved efficiency has been enabled through the use of inexpensive, cloud-based software tools, Aarstol says. That relates to some of the thinking behind the short-day policy.
“I consider everyone in the company a knowledge worker,” the CEO says. “Everyone selects and uses software systems, designs and optimizes their business unit and their workspace, and optimizes the tools they use to do things efficiently. No one has a ‘manager’ above them that designs systems which they then just implement. Everyone has to get creative, find solutions, and push certain metrics.”
Importantly, Aarstol adds, there is no logic behind applying the same-length workday to knowledge workers as Henry Ford applied to factory workers in 1914.
“We’re going through a transition of tools for knowledge workers that was very similar to the transition of tools for the industrial revolution that made factory workers 10 times as productive as they were before,” he observes. “All of a sudden your ability to get stuff done gets easier and easier.”
But, he continues, “The eight-hour workday is sacred. Very few people have stopped and asked, with a blank slate, what a knowledge worker’s day should be like, how could it work better, how should you manage people’s energy?”
Aarstol says that at companies where he’s worked, there were always people who were able to be several times more productive than everyone else was. His recruitment philosophy is to find and attract such people for all company positions. “It’s a renegotiation with them: I’m only going to take a few hours of your day, because I know you can run circles around other people. And then you can do consulting on the side, or have a bigger life, or whatever.”
Many companies today go the opposite way, he points out, exerting pressure on their increasingly productive work forces to boost productivity even further by working more than 40 hours a week, and in some cases substantially more.
“This is recreating the robber-baron class,” he says. “Companies are hugely profitable, wages are stagnant, and they’re even laying people off and telling those remaining that they’re lucky to have a job.”
Aarstol acknowledges that no one is forced to leave work after five hours. Indeed, some employees were initially uncomfortable with the new schedule, and even now, when there’s a new project they occasionally put in more hours voluntarily.
But, he adds, sometimes he’ll make a point of leaving the office at 1 PM for two weeks at a time “because I want everyone to know that it’s OK.”
That doesn’t necessarily mean Aarstol stops working when he leaves. He says his own total hours worked haven’t changed much since the short day was implemented.
“Like a lot of entrepreneurs, my hobby is building businesses,” he says. “I don’t paint or surf. It’s what I’d do if I weren’t getting paid. But some people work so they can raise children, or maybe someone wants to coach Little League or [pursue other] passions that are very productive things within society, leading to happiness for themselves and the people around them.”