Tower Grew By Over 40 By Introducing A Five Hour

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Stephan Aarstol

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Today’s interview is with Stephan Aarstol, Founder & CEO of Tower Paddle Boards, a direct to consumer beach lifestyle brand, based in San Diego, that started with stand up paddle board manufacturer and has now extended into surf, snorkel, bikes, skateboards etc. However, Stephan joins me today to talk about his new book: The Five-Hour Workday: Live Differently, Unlock Productivity, and Find Happiness, the idea behind it, how he has implemented it in his own firm and what has been the benefits for customers and employees.

This interview follows on from my recent interview – Over 50% of a customer’s experience is driven by how they feel – Interview with Colin Shaw – and is number 193 in the series of interviews with authors and business leaders that are doing great things, providing valuable insights, helping businesses innovate and delivering great service and experience to their customers.

Here’s the highlights of my interview with Stephan:

  • Tower Paddle Boards is not a lifestyle business but is a high performance business.
  • Two years ago Tower Paddle Boards was named the fastest growing company in San Diego.
  • Stephan and many of the other successful entrepreneurs around him are focused on completing their work as efficiently and effectively as possible.
  • Stephan wondered if those practices could be implemented in his own business.
  • As a result, Stephan wrote The Five-Hour Workday: Live Differently, Unlock Productivity, and Find Happiness as a way of documenting the why and what they have done to achieve this.
  • The basic hypothesis is that many good knowledge workers, in the USA, are doing 2-3 hours of good work a day but are taking 8-10 hours a day to do the work.
  • U.S. employees at large-sized companies only spend 45 percent of their time on primary job duties.
  • In the past 40 years in the US, productivity has gone up 80% and wages have only gone up 11%.
  • However, Stephan believes that he and his friends are not 80% more productive than they would have been 40 years ago but are 1,000s% more productive. Therefore, if executives are only seeing 80% more productivity then they should be angry as new technology can supported much greater productivity.
  • The 5 day a week, 8 hour work day is primarily a product of the industrial age in the US and the UK and it can differ significantly from other countries around the world.
  • The 5 day a week, 8 hour work day was invented in the early 1900s, was popularised by Henry Ford, and was driven by a desire to achieve a more sustainable and safer set of work practices.
  • In the early 1900s in the US, 1/2 % of the working population was dying or being injured on the factory floor every year and employers were facing 60-70% staff turnover rates per year. Therefore, something had to change and that change was to move to the 5 day a week, 8 hour work day.
  • But, now that we are in an era dominated by knowledge workers 8 hours concentrated and focused work is hard, not optimal and we don’t tend to disconnect, rest and take care of ourselves given the connectivity we now have at our disposal.
  • Right now in the US and the UK we are stuck in this dominant logic that more hours means better. With the changing nature of work and the tools at our disposal that is a broken assumption and it’s having a negative impact on our lives.
  • Here’s how Stephan introduced the 5-hour work day at Tower:
    • One day he announced that the following week he wanted to move the company to a 5 hour work day, from 8am through to 1pm with no lunch break.
    • Initially this would be as a 3-month pilot and as a way to give employees their ‘life’ and time back.
    • He added, however, that he only wanted people in the company that could work this way and that he would fire anyone that couldn’t adapt. This was the essential ‘pressure’ that was needed to make the initiative successful.
    • This had no impact on their salaries (ie. they were challenged to do the same amount of work in less hours for the same salary).
    • At the same time they introduced a 5% profit sharing scheme, health care and Tower Tuesday, a social initiative to maintain the social connection amongst employees.
    • This included changing their customer service help desk, distribution centre and retail shop hours to 5 hours a day.
  • This initiative changed the way that employees thought about work and how they approached it.
  • They rolled it out on June 1st 2014 and their revenues that year went up 42% and profitability was up to north of 30%.
  • Making these changes they expected to take an up to 40% hit from their customers. But, in reality, they have had no negative impact from customers as they have self adjusted to the new opening hours or hours that Tower are available to help.
  • The 5 hour work day forced Tower employees to communicate and operate more effectively and efficiently.
  • When you put constraints on things that is when you force a creative solution.
  • The lack of constraints in business is a horrible thing.
  • If you are not putting constraints on everything you do in your business then you are not finding those creative solutions.
  • Check the companion site to the book http://www.fivehourworkday.com, where if you leave your email you will get the first 48 pages of The Five Hour Workday, a bonus list of 38 amazing productivity tools and a free subscription to Tower Magazine.
  • To get started with this type of approach, start with yourself first. Figure out how you could get your own work done in five hours a day.
  • Once you have gotten comfortable with it yourself, start a pilot like they did at Tower to see how your own firm would deal with it but make sure you add in your own ‘pressure’ to give yourself the best chance of succeeding.
  • Stephan cites one example where the folks in his shipping and warehouse section figured out to get more out of the software they use, have reengineered their processes and reorganised the warehouse to make sure that they can do more within the reduced hours but also, when things get busy, they can still do the work they need to do without having to increase headcount. In the process they have reduced the average shipping processing time of a package from 5 mins to 2.6 mins. They did all this without any oversight from management.
  • Stephan tells a story of how he bought a new car (Porsche) and after he had had it for a few months the clocks changed to daylight saving time. He noticed that the clock was out and then the dealership called to check in with him and ask if he had any questions. He said yes and that his clock was out. The person at the dealership then said that was the primary reason why they called and they helped them switch his clock over. That level of proactivity, for Stephan, epitomes Wow service/experience.
  • That approach is also something that Stephan has implemented at Tower. They call it Project Happiness and is their way of giving.
  • We are an efficiency minded business but we are not trying to automate things that create hassles for our customers.
  • May companies are automating the wrong things.
  • They say they want to scale the unscalable i.e. answering the phone. As a result and to build that into the way they do things, when someone comes and works for the company they spend the first year in customer service. That way they get to know customers and the business intimately.
  • You want to automate your work so you can work faster but you do not want to automate the personal touch.
  • Check out Tower Paddle Boards, the book and supporting materials at http://www.fivehourworkday.com and their digital magazine at http://www.tower.life.
  • One day he announced that the following week he wanted to move the company to a 5 hour work day, from 8am through to 1pm with no lunch break.
  • Initially this would be as a 3-month pilot and as a way to give employees their ‘life’ and time back.
  • He added, however, that he only wanted people in the company that could work this way and that he would fire anyone that couldn’t adapt. This was the essential ‘pressure’ that was needed to make the initiative successful.
  • This had no impact on their salaries (ie. they were challenged to do the same amount of work in less hours for the same salary).
  • At the same time they introduced a 5% profit sharing scheme, health care and Tower Tuesday, a social initiative to maintain the social connection amongst employees.
  • This included changing their customer service help desk, distribution centre and retail shop hours to 5 hours a day.

About Stephan (taken from his Tower bio)

Stephan Aarstol is an entrepreneurial thought leader and online marketing expert. With over 15 years of Internet experience, Stephan has worked with a large variety of startups, from ecommerce and medical imaging to educational toys and youth backpacking. As the CEO and founder of Tower Paddle Boards, Stephan attracted an investment from billionaire Mark Cuban on ABC’s “Shark Tank.”

Stephan founded Tower Paddle Boards in June of 2010 after picking up the sport early that year in the waves of La Jolla shores. Like anyone else whose tried the sport, he’s been hooked ever since. In 2012, Tower was named one of the top 10 success stories in the history of ABC’s “Shark Tank” by Entrepreneur Magazine.

With only four employees, Stephan has grown Tower from $3,000 revenue in 2010 to a projected 2014 revenue of $5,000,000. Before founding Tower, Stephan started a number of niche ecommerce businesses, including high-end poker chip company BuyPokerChips.com. The site began as a solo venture side job and resulted in $2.5M in sales over its first five years. Stephan is an avid backpacker and has a passion for leading revenue-increasing initiatives for startups and high-growth organizations.

Stephan holds an MBA in New Venture Management from the University of San Diego and lives in San Diego today.

Connect with Stephan on LinkedIn here, say Hi to him on Twitter @StephanAarstol and, if you feel like it, send him an email: [email protected].

Photo Credit: watts_photos Flickr via Compfight cc

Source: Customer Think