A little over a year ago, Tower Paddle Boards started letting employees leave by lunchtime and offering 5% profit-sharing.
In every office, I’ve often felt, there are just a few people who do three times the work of everyone else, yet their reward is only marginally higher. As an entrepreneur, I’ve been managing my own productivity time—not on-the-clock-time—pretty effectively for over 15 years, and I’ve largely been able to work fewer hours than my friends in the corporate world. So when I started Tower, my company that sells stand-up paddle boards, I figured (or at least hoped) that I could hire just these types and give them a better deal in the process.
So while we operated on a standard eight-hour workday at first, just like most other companies, I wanted to put my theory to the test. And it also seemed like freeing up employees’ afternoons for the outdoor lifestyle the company promoted would be a natural fit. So on June 1, 2015, I initiated a three-month test. I moved my whole company to a five-hour workday where everyone works from 8 a.m. to 1 p.m. Over a year later, we’re sticking with it. Here’s why, and how we made the change work.
MAKING THE SWITCH
When we kicked off the pilot program, I told my employees I wanted to give them two things. First, I simply wanted to give them their lives back—so they’d have a pass to walk out each day right at 1 p.m. as long as they proved highly productive. Second, I wanted to pay them better for more the more focused effort that would take. Their per-hour earnings were set to nearly double overnight: we’d be rolling out 5% profit-sharing at the same time.
Prior to the switch, an employee making $40,000 a year would’ve been paid $20 per hour ($40,000 divided by 2,000 hours per year). With the profit-sharing program leading to about $8,000 per person, that same employee would now make about $48,000 but only have a baseline of 1,250 hours per year, so their per-hour earnings would jump to $38.40. And it was crucial to me that this didn’t increase the company’s expenses by a single dime—there’d be no increased financial risk to our bottom line.
In exchange, though, I had a big ask: I needed each of my team members to be twice as productive as the average worker. We had a high bar of productivity to clear before this, and that didn’t change. I told them they just needed to figure out how to do it all in just five hours now—but there’d be support: we’d all need to figure it out and were in this together. If anybody couldn’t, though, they’d be fired. The pressure was real, but so was the incentive to meet the challenge; their workweek had suddenly become better than many people’s vacation weeks.
The results have been astounding. We’ve been named to the Inc. 5000 list of America’s fastest growing companies the past two years (we ranked #239 in 2015). This year, our 10-person team will generate $9 million in revenue.
A LEAP OF FAITH, MADE FOR GOOD REASONS
To make sure we didn’t bite off more than we could chew, I termed the pilot program “summer hours,” and set the expectation that we’d go back to traditional hours in the fall. This made some room to keep an eye on anything that might go wrong. I was concerned that our reduced customer-service hours and shop hours would mean an equal reduction in revenue. My gut told me that attracting better people, making them happy, and getting out of their way would compensate for these limitations, but we’d need to prove that. I actually suspected things would go down a bit, but the net effect would be worth it.
The reality is that we didn’t take a hit at all. Our annual revenues for 2015 were up over 40%. All our numbers were improving, in fact. When I tell people my team only works five hours a day, their response is always, “That’s nice, but it won’t work for me.” The 9-to-5 workday (or worse) is so ingrained that it’s hard to imagine anything else…
In one generation, the Internet went from opening up new free markets to creating a series of Fake Markets that exploit society, without most media or politicians even noticing.
1. The open internet markets
American culture loves to use the ideal of competitive free markets as the solution to all kinds of social problems. Though the vaunted Free Market has no incentives to, say, take care of babies with cancer, a well-functioning market can definitely be a great way to see which provider offers the cheapest price for a roll of toilet paper or a bushel of apples.
Given that cultural predilection, some of the first things people made in the early days of the web were new markets. Perhaps the canonical example was eBay; anybody (well, almost anybody) could list their ceramic figurines for sale on eBay and participate in a relatively fair market. On one side, a gaggle of figurine aficionados, enthusiastically searching for the best deals. On the other, a bunch of figurine vendors, competing on price, quality and service. In the middle, a neutral market that just helps connect buyers and sellers through instantly updated information. Everybody’s happy!
Later, a seller could buy preferred positioning for their products in eBay’s search results, and some product categories started to be dominated by wholesale suppliers, but it still remained a relatively open system. Everybody’s mostly happy!
Not long after eBay started, Google launched, as a sort of market of content, with its PageRank system choosing which pages show up in our search results, ranked by the number of inbound links. On one side were readers, and on the other side we had publishers, and in between was Google using a mysterious but still kind of comprehensible algorithm to create a market where almost everybody felt like they could participate.
Contrary to popular belief: meetings are not the devil. We look at how to get more creative – and productive – with your weekly gatherings.
But there’s good news: Rapid experimentation with meetings in the past decade by startups and Fortune 500 companies alike has produced a new set of rules to consider. Here are three that seem to be universal: Of course, there’s no need to stop there.
All meetings must have a stated purpose or agenda. Without an agenda, meetings can easily turn into aimless social gatherings rather than productive working sessions.
Attendees should walk away with concrete next steps or Action Items. We love Action Items here, but we’re not the only ones. From Apple to the Toastmasters, the world’s most successful organizations demand that attendees leave meetings with actionable tasks.
The meeting should have an end time. Constraints breed creativity. By not placing an end time, we encourage rambling, off-topic and useless conversation.
Of course, there’s no need to stop there. Truly productive companies always continue tweaking to suit their specific culture. Here are a few highlights:
Apple
During the Steve Jobs era, Apple constantly worked to stay true to its startup roots while becoming the largest company in the world.
Every project component or task has a “DRI.” According to Fortune’s Adam Lashinsky, Apple breeds accountability at meetings by having a Directly Responsible Individual whose name appears next to all of the agenda items they are responsible for. With every task tagged, there’s rarely any confusion about who should be getting what done.
Be prepared to challenge and be challenged. There are dozens of tales about Jobs’ ability to aggresively question his employees, sometimes moving them to tears. While you probably don’t need the waterworks at your office, everyone should be willing to defend their ideas and work from honest criticism. If a person has no ideas to defend, they shouldn’t be at the meeting.
Leading a sales team is hard–it can be difficult to strike the right balance between encouraging top performance and overwhelming sales reps with impossible goals. Your success as a sales manager hinges on your team’s ability to perform well, but it can often feel like their performance is out of your control.
While of course it’s true to a certain extent that you can’t force skill into an untalented rep, there are certain steps you can take to set your team up so that under performers are more likely to excel. Read on for three surefire ways to set your reps up for success:
Set the Right Tone for an Environment of Excellence
In my career, as both a salesperson and a manager, I’ve consistently found that people generally conform to the expectations you set for them. If you act like a task is impossible, they’ll fail to deliver. If you act like reps are destined to underperform, they will. If, on the other hand, you set high expectations from the start, it’s more likely your team will rise to the occasion and meet them.
That doesn’t mean that you need to apply intense pressure in order to see results. Studies consistently find that the most successful salespeople feel happy, supported and positively reinforced. The best approach is to establish a culture where high goals are clearly articulated and meeting them is expected. Your job from there is making your team feel they have the capacity to achieve those goals.
It can be tempting to make excuses for reps who are underperforming, but holding them accountable for meeting their quota goals is better for them too, in the long run. Instead of going easier on reps who struggle, work with them to figure out what they need to do to meet their goals and outline a plan of attack.
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