Ready for a Change? How about a Five-Hour Workday?

Stephan Aarstol is the founder and CEO of Tower Paddle Boards. He founded the company in June of 2010 after picking up the sport early that year. Tower was named one of the top 10 success stories in the history of ABC's “Shark Tank” by Entrepreneur Magazine. He has implemented a radical concept called the five-hour workday, and he has written a book about this experience called The Five-Hour Workday: Live Differently, Unlock Productivity, and Find Happiness. You can buy the book here.

Q. Wouldn’t you want Apple stores to be open for more than five hours a day? 

 As a consumer, I really want everything I use open all the time. We all do, and we're being trained to more and more. When I need to shop for something Apple, I want to go immediately. You always want more.

But the reality for me is that the Apple store isn't exactly something I need to be open 24/7. I would guess their hours are 10am-8pm, so that's currently about ten hours, seven days a week. That works for me, but if they dropped it to five hours, I don't think my quality of life would be negatively affected one bit.

The town I grew up in, a town of 150,000 people, doesn't even have an Apple store. Most don't. And quality of life there is just fine, truly remarkable really. Even there you can get an Apple product the next day, and in places like San Diego with emerging services like Amazon Prime Now I can get one in two hours.

That's nearly as fast as I can go to the Apple store myself and return home, without wasting 1.5 hours of my time. Retail is evolving fast, so long store hours are becoming less relevant across the board.

Q. Is the key that the store be open five hours or that people only have five-hour shifts?

 What I'm advocating at Tower is that the five-hour workday is the critical piece. I'm not really saying every store or business should be open only five hours. That is much more dependent on the type of business. A lot of people assume that if you have a store you have to be open all the time, the more the better, but that's just not the case.

We've proven that you can break away from that mentality and things really don't fall apart. You should not only be calculating revenue per square foot, but also revenue per hour open.

The sky doesn't fall if you only answer the phone 8am-1pm Monday-Friday. When we do say we'll answer the phone, we actually pick it up and you talk to someone really knowledgeable. No phone trees. No dodging customer interaction in the name of “efficient.”

The argument I'm making in the book and in our business is simply that we can work less and achieve the same or more output. Five hours isn't perfect for all business types, for sure, but it's a step in the right direction. It works well for us.

Q. What types of positions and organizations are well-suited for this concept?

A lot more than people would assume. At Tower, the whole company went to a five-hour workday. This includes customer service hours. No real downside. This includes our warehouse operation where there is very physical labor with unloading containers, as well as outbound shipping, inventory counting, and purchase order creation and execution. No downside. This includes our physical retail store front. We just reduced the hours there and we get the same number of walk-ins, just at a faster clip. No downside.

The takeaway is that this works not just for knowledge workers that sit at desks, but for really any function that can be assisted by software. There is software for pretty much all warehouse functions. Same thing for customer service functions. If someone is essentially being paid for their productivity, not their time, it can work.

Q. How do you know if a five-hour workday increased productivity or reduced waste (that is, eight hours simply wasn’t necessary)?

It's very transparent to see the productivity gains in certain areas of our business. Other areas are less visible, but I'd argue even more pronounced. This move to a five-hour workday was based largely on empirical evidence of my experience as an entrepreneur and my peers.

At Tower Paddle Boards, prior to moving to a five-hour workday, our shipping department had an average order processing time (charge order, print order, pick order, pack order, label order, get customers tracking number, all the computer work, etc.) of five minutes. A few months after making the move, without any managerial oversight, the team was able to reduce this time to 3 minutes by learning more expertise in using the software they already had, and by a total re-organization of the warehouse space.

Our website and phone activity numbers provide an even more interesting occurrence. Prior to the move, our phone hours were 9 am to 5pm Pacific Time, Monday to Friday. We moved the customer service to 8 am to 1pm, same days. If we look at May 2015, the month just prior to the move, versus May 2016 (one year into the experiment) our number of unique visitors to the website was consistent at about 36,000. It's been consistent for the past four years.

Inbound call volume went down 34.7% and the number of those calls answered went down 42.7%. This may sound atrocious on the surface, but consider the fact that Amazon.com doesn't take phone orders at all, and they're taking over retail. Add to that the fact that revenue from the site and phone orders only went down 1.2%, and overall revenue for the company went up 21.2%.

Productivity is defined as the rate of output per unit of input. That's what this is about--small experiments at sharply reducing our input while still trying to tweak up the output. The five-hour workday imposes an artificial time constraint, and that pressure brings better means.

In less visible areas, like business development, marketing, sourcing, human resources, finance, communications, travel, education, and operations, we don't really have the resources (or motivation, really) to do highly controlled experiments like with our shipping and customer service. But the productivity gains here are even more pronounced.

The time constraint forces us to identify and use productivity tools to accomplish our jobs faster, while still being a high growth focused company. We detail thirty-eight productivity tools that we use, our secret sauce, at FiveHourWorkDay.com. These are tools that can save any company countless hours and literally millions of dollars.

Q. What types of positions and organizations are not well-suited for this concept?

The one type of job that the five-hour workday will absolutely not work ideally for is jobs where people really are being paid to cover a certain amount of time. A job like a fireman, policeman, emergency room nurse, or store clerk at 7-11.

Note, however, that we have a retail store, and we just reduced our open hours with no major ill effect. I think this is actually possible for a lot of retailers without much loss. More and more retail is going to e-commerce anyways, so I'd argue those same retailers ought to be spending less time manning the retail storefront and more time figuring out how to tap into extending their storefront presence online, where it's an automated 24/7 operation without need for any staffing.

Q. What if employees want to work longer hours to make more money—that is, they don’t value the free time as much as more money?

This is truly the beauty of the five-hour workday. You are shifting the baseline from an eight-hour day to a five-hour day, and in doing so compressing the amount of “have to” work. The rest of your time is freed up to do what you wish. It's a major psychological shift.

In the case of a company and employees, what we've found is that many of those employees still work long hours at times but it's a voluntary effort. They're not working because they are “on the clock” or someone is looking over their shoulder. That's a big distinction. This is how entrepreneurs, free agents, and the self-directed work, and it's empowering. When you don't “have to” work, it just seems less like work and more like a hobby.

People still have psychological needs. If you look at Maslow's Hierarchy of Needs pyramid, earning money from work is really only meeting very basic needs such as employment, food, sleep, and at some levels empowering a basic level of relationships. But our work also satisfies many higher psychological purposes of esteem and self-actualization. Self-esteem produces an innate need to achieve, earn the respect of those around them, and develop confidence. The need to self-actualize involves a desire to be creative and solve problems. These are all things we can do with our work.

The question is what do you do with all the time you've freed up, and this is a very personal question. As it should, it varies wildly from one person to the next. Some people want more time for sports and outdoor activity. Some want to spend more time with friends and family. Some want to exercise more. Some want to cook more. Some want to learn new skills or educate themselves for their next step in life. Some want to advance within the company or their industry. Some just want to make more money.

With your afternoons free to do with as you please, you can pursue whatever path you choose and therein lies a lot of happiness and a far better quality of life. More importantly, what you want to do with your new found free time changes over time as you go thru different phases of your life. The five-hour workday empowers you to shift focus from time to time without making huge sacrifices in your area of employment.

What we've found at Tower is that different people have different wants. I have a very young company, so mine is probably different than most. When we made the shift, people just did what they wanted. One guy drives UBER after work. Our filmmaker still sleeps in the office at times as he absolutely loves what he does. Our operations guys voluntarily went to China and lived in a factory for 3 months last fall. Some people surf. Some people spend more time on their relationships. Some people work on side gigs and side businesses.

I have an 11-year old son so I made a commitment to catch more of his little league games. This year I went to every single game and he had about twenty-five of them. It was an amazing season where they started 1-7, then battled back to win the championship. That amazing season was a shared memory we'll both have forever and it started with just a mindset change.

Q. What do you do if a project is behind schedule?

The five-hour workday is a new baseline. Nothing else has changed. If people are not producing, they will be fired. If schedules are not met, that's a problem. Everyone is on salary at Tower. If it's crunch time, employees are still expected to clock a fifty to sixty hour weeks on occasion if they need to in order to get their work down.

This is kind of a funny question because the whole idea of setting a schedule or setting a timeline for completion of a project is widely acknowledged as an essential management tool to ensure people are being productive. You are basically creating an arbitrary time constraint, usually for long term projects. Everyone agrees that this is needed or companies would not be very productive as projects would bloat. Like a sponge they would fill more and more time needlessly. Nothing would ever get "finished.”

This is the exact same principle at work in creating a daily time constraint of a five-hour day. If tomorrow you are told that you only have five hours to finish your work or you will be fired, you magically get it done. Now imagine this same pressure every day. It won't magically happen overnight, but over time you will learn better habits. You will identify tools that allow you to accomplish things faster than you do today. That learning will create a sustainable competitive advantage in productivity.

Q. How does a five-hour workday compare in appeal and effectiveness to tele-commuting?

Telecommuting is a work-around that's been invented by knowledge workers because employees know and understand that they really only do two-three hours of truly productive work in a day, but the bosses want you to clock eight-ten hours. In fact, most of the bosses are most concerned with what time people show up and leave the office. All the smart people are finding ways to remove themselves from the office environment altogether so they are free to get their work done quickly and free up the rest of their day. They've created their own five-hour workday, just at home.

I know a guy that has a job that is 100% telecommuting in a high-position at major corporation earning in excess of six figures. He's been doing this for a long time and is doing great at his position. At the same time, he's built a side business with five franchises, one doing over $1M in sales annually. He literally rented an office that he uses primarily as a cash counting room. There are tens of thousands of high-performing employees like this out there. Their companies are oblivious, but no cares because performance and productivity are great.

The problem is that companies are losing big in one way. They're not getting their smartest people to work together in one room. Thus they're not enjoying the benefit of idea sex--allowing smart people with different backgrounds and different expertise to bounce good ideas and thoughts off each other and serendipitously stumble onto great ideas.

Telecommuting is a bad solution when you compare it to just shortening the day to five hours and giving smart people their free time back just the same.

Q. How does a five-hour workday compare in appeal and effectiveness to flex time?

Flex time is another new attempt at giving employees a better work-life balance, and it’s twice as terrible as telecommuting.

In extreme cases of flex time, businesses essentially don’t have set working hours. If somebody likes working at night, they can come in and work at night. If somebody likes taking five hours off in the middle of the day, they can do that. This all of a sudden makes it really hard to track when people are coming, when people are going, and nobody really knows how long anybody is there in the offices.

This is just another version of the idea behind telecommuting to give talented and productive workers a way to enjoy the fruits of their productivity by getting out of the office. But this one is even worse because nobody knows when anybody will be there, and communication cycles (and the projects that depend on them) essentially work as if everyone is telecommuting. It just shifts to email-centric communication, and there’s no idea sex.

I look at our business like a football team. Everybody's got to be on the field at the same time, for us to accomplish our best. You’ve got to know you can count on your teammates to be there, and perform, and inspire you to perform at your highest level too. And from an operational standpoint, flex time is like having six players on the field instead of eleven.

Q. If a company wants to give the concept a try, how should it start?

There is a risk-free way to try the five-hour workday that pretty much any company can try: just do summer hours. Tell all of your employees that summer hours will now be 8am-1pm with no lunch. Everyone can all go home at 1pm so long as their work is done. In the fall, it's going back to our regular hours. Enjoy the summer. That's the give. The ask is that they need to figure out how to get everything done that they were doing before in a full day, but now in just five hours.

This is very different from just asking people to be more productive. Most people won't even believe it. Once they get a taste they'll start to see their job a little differently. Instead of seeing it as the weekly grind, they'll start to just see it as this thing they do in the mornings to empower this amazing lifestyle they have.

The best part is that when you roll back to regular hours the company will enjoy the benefit of all the new found productivity. Every worker will have dipped their toes into becoming their own efficiency expert.

If you're really an enlightened company, you'll find what we found. You'll find that a reduction in the baseline office hours doesn't negatively affect productivity at all, and in fact it does quite the opposite.

Q. How long will it take to see results?

Workers will start finding creative solutions pretty quickly. It's a challenge. I'd recommend creating a sharing mentality where people can learn from what others are doing. The collective learning will help everyone individually.

For some people this will work well, and for others it won't work so well. Some people won't change any of their work habits and just take this as a reduction in hours. They've been trained to work one way for so long that it's going to be hard to change things. We've had that happen here, and I've had to fire people.

Other people will go through cycles. There will be bursts of highly productive time, and also lull times. You've moved to managing people’s energy, and this comes and goes. I experienced this myself and it probably took three-five years before I sorted it all out and could perform at a high-level on a relatively consistent basis. Still, there are ebbs and flows, but the mentality shift is where the benefit comes in. People start focusing on output, not hours clocked. They start analyzing inputs and outputs, and in doing the measuring everything gets improved.

We're only a year into this on a company wide basis so I honestly don't know how things will work out. So far, I've been very pleased with the results. Our goal is to build the biggest beach lifestyle company in the world and do it working five hours per day. As we move along that path, the proof will be in our collective performance. If we're building a company faster than yours and you're working longer hours, clearly you're doing it wrong.

The biggest results here are not from a small tweak in your current reality, but from completely re-mapping your future reality. It's not only about increasing the productivity of your current team, but more importantly about recruiting and retaining the most productive talent from other companies.

If I offer $60,000 for a five-hour day and another comparable company offers the same for what surely will turn out to be a ten-twelve hour workday, where do you think the best employees will gravitate? Where do you think the future CEOs and the future entrepreneurs will gravitate?

Q. What are the downsides of this concept?

That's a question I get frequently. I see no downside to a five-hour workday. Really, it's just a more optimal solution to knowledge work all around. That's why entrepreneurs like myself are thriving in today's new work world, and why I believe in time that this will be rolled out to entire companies. It's just one idea though, and I'm sure it can be optimized more. I'm hoping this book sparks that larger discussion.

More importantly, the fact that I get this question all the time means that most people just assume that the current eight-hour workday is some kind of optimal level. The implication is that if we move away from it there has to be some pros and some cons. I think this is all based on a faulty assumption.

I'd argue that we as a society have just never really looked at optimizing the work day for knowledge workers. Instead we just defaulted to what Henry Ford invented for factory workers 100 years ago. The world has changed quite a bit since then. It's completely changed in the past twenty-five years. Very few of us work on factory floors today. I'd say it's a bit insane to assume that a workday invented 100 years ago for a totally different type of work force is even remotely well suited to the work we do today.

Imagine if a company did not change how they did marketing for even ten or twenty years? Imagine if a company didn't reassess how they distribute their goods and services every so often? Imagine if a company didn't assess how to use new technologies to transform their entire industry every few decades? They would go bust, without exception. Yet when I tell people we're experimenting with a five-hour workday they look at me like I came from Mars.

As they say, people learn to love their chains.

Ready for more? Check out the book The Five-Hour Workday: Live Differently, Unlock Productivity, and Find Happiness. You can buy the book here.

Disclosure: I received product from Tower Paddle Boards.