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Creating a four day workweek
Productivity | 22 Dec 2019
The more I think about it, the more amazing the idea of the four day work week is. It has been proven to increase productivity, reduce stress, and increase employee loyalty.
It can also significantly impact gender inequality, conservation efforts, and better mental health in the workplace.
Andrew Barnes first tried this idea with his company, and the result were so amazing that he’s dedicating his time to evangelizing the idea around the world.
What we learned from this episode
-If you can’t measure what a productive week looks like in your company, you’ve got issues.
-The dangers of presenteeism.-Why the agreement was much more personal than you would think.
-Productivity goals are based on a team, not individuals. So, as a team they are obligated to work very hard over four days.
-Don’t be confused, this isn’t just about lopping a day off the week. This is a much more fundamental shift to remove work-for-time and got to work-for-output, yet with the benefits of being an employee.
-Some people choose not to opt into the policy. They would rather work five days. -They got better productivity analysis because both sides (ownership and employees) were active in the agreements.
-A majority of millennials say they will trade salary for time.
-Why Andrew is a big enemy of gig contracts (hint – it’s the availability and lack of protection)-All legislation around work is still fixed on time, which is a big problem.
-If we don’t take care of the mental health of today’s workforce, we are going to be paying for it in the future.
-The biggest barrier to achieving a 4 day week is getting over the idea that “working harder is working longer”.
-The way to implement a 4 day week is not to mastermind it, but just put the challenge to your team and ask them how they will achieve it. Then get out of the way.
-Imagine the impact of taking 20% of cars off the road every week.-At what point does offering a 4 day week become an ethical decision? An economic one?
-Andrew’s decision to go to 4 days was an economic one, not just a humanitarian one.
What you can do right now
-Think about what it would mean to offer a four day option to your employees.-Better yet, think about restructuring your agreements around productivity and not time.
“What you are giving people is the gift of time. That is the most valuable thing you can do.”
“The productivity gains that we’ve achieved have been done largely through better time management, not technology.”
“In all the deals I’ve done, in all the transactions we’ve been in over 40 years, this is, without exception, the best thing I’ve ever done…You don’t get many chances to change the world.”
Today, our guest is Andrew Barnes, the founder of Perpetual Guardian and architect of the four day week. And this is Work Minus the Fifth Day. Hi, Andrew. How are you?
I’m very good, Neil. Good to talk.
So, I’m really excited to speak with you. We are talking on a Wednesday. Is today a workday for you?
Sadly, it is a work day, not actually work in my business. It’s the stuff I’m doing for our city. I do some managing of museums and things like that.
Your company burst onto the scene almost two years ago now because you tried this crazy little experiment about just knocking off a day off your work week. And it has resurfaced with a lot of other discussions come up. So, we wanted to reach out to you and just get some history and context. So, why don’t you start off sharing with us why you guys are famous, what’s the crazy thing that you did at your office, and what the effect has been?
Well, what we did is we run a project we call the 100-80-100 productivity week. And what that means, in essence, is we pay our staff 100% of the salary, they only have to work 80% of the time, though that’s provided we get 100% of agreed productivity. And so, what’s different about this to other campaigns that have been started around work life balance is they’d focused on the work life balance component. What we did is said, actually, for businesses to do this, they have to be able to see the economic rationale that sits behind it. And so, that’s why we linked it to productivity and we thought that it would be possible to deliver the same amount of productivity over a shorter working week and that’s been borne out.
So, let’s go back. You used the term agreed productivity standards. Now describe the industry that your company is in.
The best way to look at us is we’re a cross between a law firm and a financial institution or an insurance business. So, we supervise capital markets here in New Zealand, but we’re also the largest philanthropic and private client trustee company in New Zealand.
So, what are some of the ways that you all have measured your productivity?
Well, right at the start of the concept, which was driven by me reading an article that said that people were only actually productive in the United Kingdom for two and a half hours a day, that I started to say, well, actually, why is that and is that happening in my business, how much presenteeism, how much non productive work or activity is going on in my company. So, the thesis was to sit down with the staff and say, “Look, I’ll give you the day off. But you’ve got to give me the productivity. So, you’ve got to think about how you will do things differently at work so that you can deliver that productivity.” Now that can be working smarter, it can be having more chances to concentrate, it also can be cutting out things that you know are not work or productive, for example, surfing the internet. And you’d say, well, actually, it’s more important for me to have the day off than to do that in the office. And that really is right at the heart. This is a very personal engagement, if you will, between myself as the business owner and my team.
I like the fact of how you’ve almost entered in this contract with your workers on a much deeper level than what we typically think of an employee contract. There’s a lot of expectation out of each other. There’s a lot of accountability that I’ve heard as you tell your story, as people talk about I don’t want to screw this up for the rest of my colleagues that are out there, too.
That’s exactly right. I had a stint in the military many years ago. And it was one of my observations that nobody ever went over the top for a flag or a mission state. What they did is they went over the top for the man on their left and the man on their right. And so, way we’ve designed this is that you as an individual opt in to the productivity week. But the goals are set on a team basis. So, you have accountability, not to me, you have accountability for people that you work with. If you decide that you’re not going to do what you need to do, then it’s their four day week that you’re putting at risk. So, what we do is we say we give you the productivity. If you deliver the productivity, we will gift you a day off a week, it’s a gift. Your contract of employment remains five days. So, in theory, if a team decides or does not deliver the productivity over a period of time, we have the right to say, well, guys, back on the fifth day. So, it’s a very personal engagement. There is give and take on both sides.
We’re talking about days of the week and four days, five days, but it’s also a bigger deal. It almost seems like you restructured your company, you removed this dependence between time and work, and you put it back on just tell us what it means to be productive, get that work done, and however long it takes you to get done, then you agree to that. Do you feel like it’s been a restructure in that way or was it always like that?
You’re absolutely right. That’s exactly right. The conversation is about productivity and output. I don’t pay an individual in the company to sit on their seat for five days. The salary is quite often in businesses, we don’t do it very well, we’re not really aware what productivity is. But that’s what you’re paying for, you’re paying for output. Now, the reality is I’m therefore indifferent whether the productivity is delivered over five days. Some people, believe it or not, don’t opt into the policy, they will prefer to come in five days a week. So, I don’t care whether it’s over five days or four days, theoretically, I have no concern if it’s three days or two days. Where I think this will go ultimately is that people will have a conversation with us and will say, “Look, I’d like to try and deliver my productivity working at weekends or in the evenings or maybe on the first three days of the week.” Whatever works for them. And as long as we can maintain our service standards, that’s a non negotiable, then logically, I should be okay with that because that’s what I’m paying for. And so, part of this process is we got the staff as well to tell us how we should judge them. So, we actually got better productivity analysis out of the whole scheme as well because we now have a base point that both sides have signed up to.
I feel like that’s really the revolutionary point that comes out of this. Not that you stopped working on Fridays, but it’s the idea that you define work specifically for productivity and define it so that everyone knows what that means. Because if you back up and you say I want to implement this at my own company, but I have to come up with those metrics. I don’t even know what it means to be productive. That’s a problem. If you don’t know what it means for your employees to be productive, you have other issues, and you’re trapped in a system that you need to get out of.
Yeah. That’s absolutely right. And just to be clear, we don’t, for example, in our business, because we’re a customer service business, we don’t close. So, we don’t have everybody off on a Friday. Now, equally, that’s important because what you’re giving people here is the gift of time. That is the most valuable thing that you can do. I have a guy in one of my businesses who he takes two afternoons off a week in his productivity policy. He walks home. And he tells the story he walks home and his granddaughter is brought round and he does things with the granddaughter in the afternoon. And then 5:00 o’clock, his daughter shows up and they have tea together. And when he tells the story, he cries, because what this is doing is giving back that balance, those things that are so precious to us. So, as a consequence, that individual is extraordinarily loyal to the company. He’s very engaged. He knows absolutely what that means to him and therefore he’s acutely aware of the obligation on the other side for him to deliver what we’ve agreed so he continue to enjoy that.
Yeah, that’s a beautiful thing. And I really believe that time is one of the best gifts you can get from anyone. Because it really is the limited resource that we have. It’s not about the money. It’s about the time and the way we use it. And if we’re free to use it how we want, it’s an amazing thing. So, that’s a great point.
Yeah. And look, you look at the research will indicate that over 80% of millennials, so what will be the majority of the workforce shortly, say that they will trade salary for time. So, this is a train that’s coming down the track, it’s coming to every single business, which is that you’ve got a workforce that is actually looking to find a different way. Now we can either deal with that using gig. I’m a huge enemy of gig contracts. Or we have to rethink how employment is structured in the future needs to be made flexible to accommodate those sort of wishes. And our problem is that legislation across the world is all fixated on days, times, normal hours, and you don’t get the word productivity anywhere in the legislation.
Good point. You tease me out with the gig economy stuff. Why are you such a big enemy of gigs?
Well, gig I think is a long con. And I think you sit there and people say that it’s work when you want. Well, it isn’t. It’s make yourself available to work when you want. And the gig operator decides whether you get it and there have been many articles written about those algorithms that are essentially looking at your availability and how often you make yourself available and that in turn drives you to the top of the list to get those jobs. And if you’re not available widely, you’re dropped down the list. So, ultimately, you have to make yourself available as often as not. But the real challenge for me is that you’re doing that often without the protections of minimum wage, holiday pay, sick pay, superannuation, you probably don’t even get holidays. That is actually just building the pressure on workers. And if you look at the research that’s coming out from all over the world, the pressure on the generation that is actually getting into gig, then finding it very hard to get out of because nobody’s really invested in the future, that that generation is beginning to be the most stressed. And now we’re at a point that one in four, one in five of our workforce has a stress or mental health issue. There’s a price to be paid for all of this and it will be paid in the future. I think we need to recognize that actually, in our society, there are minimum standards, and we need to ensure that our citizens are healthy. Because otherwise we will be picking that cost up in increased care, increased funding for mental health issues, etc., etc., down the track. And we can see that coming now.
Completely. We always somehow we find a way to find the money later on when we need more of it, but to really offer these very reasonable outlays so that people can have less stress in their life just for some reason doesn’t strike us.
No, it’s a pandemic. It is absolutely a pandemic. I was reading something the other day that the American Health Service kills 240,000 people a year as a consequence of misdiagnosis, usually occasioned by stress or overwork. I mean, that’s a price that we’re paying today.
I want to talk a little bit about technology and your company’s connection to technology now that you’ve shifted almost fully to this idea of productivity and getting things done. Does it change whenever someone now comes to you with a request to say, “Hey, I think this will make me more productive. I think this automation will help us better.” Has that relationship with technology changed?
Funnily enough, not yet. Because the gains that we have achieved have largely been achieved with simple time management. So, changing people’s behavior, if you are only productive two and a half hours a day, I only need to get another 45 minutes of productivity out of you in that day to be able to give you the day off if you can do that over four days. So what we found is that we’ve got much better time management skills, and that’s broadly by the way with the results that Microsoft achieved in Japan, it was basically time management. But what now has happened is part of the process when we went through the trial ends, we’ve implemented the policy that people have started to look at, well, yeah, if we do that, that will give me more time. If we do that, that will give me more time. So, we’ve now got a very measured strategy for bringing in technology. As I said, the real beauty of this is it’s actually a low tech solution that most companies could implement, and would get much better productivity out of it. And therefore, it’s a very low risk strategy to adopt. You don’t need a raft of technology to come down the track.
So, when you go out and you do your talks to people and you share your ideas, what are the most common and there’s a lot of illegitimate obstacles that are out there, but maybe some legitimate obstacles that people have to work around to implement something like this?
Well, look, the biggest challenge you have is that we’re all a creature of our upbringing or conditioning and every CEO, every board member has had it drummed into them since they started in the workplace that working longer equals working harder. And so, that’s a very, very big hurdle to get over because this is counterintuitive. I had this in my own board, people saying, well, hell, if they can do it in four days, why don’t we just get to work even harder and keep them for the fifth, which is not understanding the psychology of what’s going on in the business place. So, the first hurdle is actually, one, you’ve got to persuade leaders that this is actually a low risk strategy. The second is you’ve got to persuade them to get out of the way. And again, as a leader, you’re there because you can do solutions. And so, what you find is we say to companies, well, how about this, and they then start planning about how they’re going to do it and what works and what doesn’t work and research the least productive day. The way to do this is to put the challenge to the staff, let them come up with the solutions, and then get out the way. And that is how you will then get, in our view, an effective four day week productivity policy. So, what works for us won’t work for you. So, you’ve got to find what works for you. And the best people who can tell you that are the people working for you.
I think that’s the most admirable thing about how you went about it was that you had this idea, you approached other people about it, but then you said I don’t know how it’s going to work. We have to ask, and you asked, and people came up with really great ideas. So, I think that’s the big takeaway for me, too.
Yeah. And then the next point is I will sit down in a room somewhere and somebody will say what I’m doing and then they will look away, pause, come back, and they’ll have tried to pick the one industry that will absolutely prove that it won’t work. I had a guy sitting next to me in Wellington. And he turns around and said, “Well, it won’t work in dairy.” And I said, “Well, why not?” He said, “Well, cows need milking twice a day.” And I have to say, I hadn’t thought about the implications of dairy on the four day week. But for him to be right, the way we run our dairy farms today has to be the best it will ever be. There can never be any better way or better solution. And that’s what shows that it’s wrong. We are not at the pinnacle of evolution. There are always new ideas and what you’re saying to people is, hang on, let’s think about how we might do something better. And that’s all we’re saying here. And you’ll surprise yourself. Your staff will surprise you with their ideas because you liberate them and you give them the chance to say, actually, we could do this because it’s not their job on the line. It’s actually their chance to have a better life.
I really love what you said about we’re not at the pinnacle of evolution right now. Because a lot of times when we talk about automation, we talk about artificial intelligence, it’s almost like saying we’ve done our best here and let’s just freeze it as it is now, which that’s a very scary mindset for me to look at the future and say we’re just going to codify everything right now, put it all in algorithm and just put on autopilot. Because I don’t feel like we’re at our best now. But to actually take some time off of work to give people more time with their family to do these things they need to do, that feels like that’s a path that can lead us to a better place and can lead us to better work even.
Absolutely. Look, if you could take 20% of cars off the road every day, what would that do to pollution, climate change? What would happen to infrastructure? Certainly in Auckland here, if we did, it would add about 1.5% to our GDP because we have terrible congestion and so the less congestion would drive economic benefit. As I said, one in five of your workforce, one in four has a stress or mental health issue. So, already a chunk of your workforce are not productive. If they have chance to structure their work week to have chance to recharge and decompress, you’ll probably get better productivity from those people. And then, you move to things like gender pay suddenly start to say to women coming back into the workforce, stop negotiating a four day contract, negotiate on output, not time. And that then opens the door to more women in the C suite and closing the gender pay gap. There are lots of angles to this. And it starts from rethinking how we work and how we structure work.
That’s one reason why I was so excited to speak with you because on one level, a four day workweek sounds like it’s just a gimmick thing, just some new hack people are doing. But it really opens up this profound question of what does work mean? What does it mean to judge our work based on time? If we can stop at four, why don’t we go to three, two, one?
Well, absolutely. And that’s why we do 100-80-100. So, basically, that means if you’re already on three days a week, we apply the same math. So, your three days a week is times by 80%. So, everybody gets the benefits of this. It’s not just somebody working and we call it the four day week, it’s a lot easier to describe it that way. But what we’re basically saying is we’re saying to every employee in the company, if you can deliver us the same productivity, you only have to work 80% of the time. And that’s why we think the message is so positive.
I feel like I need to ask this question. The stats are undeniable. People who work less have less pressure on them are going to live better lives, less stress on them, less anxiety, they’re going to be healthier, they’re going to work better, they’re going to be more productive. At what point does this just become an ethical decision for business leaders to say we have to do this. Otherwise, we’re engaging in ruining the lives of the people around us. Do you think it will reach that point where it just becomes a matter of ethics?
Well, it may well become a matter of ethics in due course. I think before it becomes a matter of ethics, it’s going to become a matter of economics. So, let’s look at Microsoft’s trial in Japan. If you are recruiting software engineers in Japan or you’re a software engineer in Japan, who are you going to work for now? The Microsoft or the competitor? So, as I said, this is a train that’s coming down the track. What we’re seeing now is more and more companies engaging in the four day week campaign, and quite often they are companies who have seen shortages in their industry, are trying to work out how do you attract the best talent. Now you’ve got a generation that’s starting to focus on time. You come up with a solution like this which gives people time with protections, with salaries, with an investment in their future. If your biggest competitor does this, what do you do as a business? So, I think the economics of this will be the first driver. And I think later on it will probably then move over into the broader field of ethics. But I’ve always made no secret of the fact that I am a businessman, first and foremost, I made this decision on the basis of economics. If it had gone wrong, it was going to hurt my back pocket. It was a commercial decision that I made. And I think, wherever you look around the world, the trial results are broadly consistent. You get an uptick, a material uptick in productivity. So, actually, from an economic perspective, are you actually serving your shareholders to the best of your ability if you’re not doing this?
Well, Andrew, my last question is this. In my research, I’m sure there’s other examples, but the change from a six day work week to a five day work week, a lot of people point back to Henry Ford, his plans and giving people time off for that. And the other major changes that he brought in and those mindsets. If we look 100 years into the future now, somebody’s coming back and said Andrew Barnes started this thing, obviously, there are other companies there, but let’s just say you get to take credit for it. What do you hope is that legacy that people will say this is what started and here’s how it ended up in 100 years from now? What do you hope that is?
Well, I hope that will be the legacy in a way. I mean, I didn’t do this for fame or anything else and we fell into the campaign because it simply just went global on us and we never expected that. But look, for me, this is part of what it is to be human. That life isn’t just about work. We have to recognize. And we say it is our mantra, we want our people to be the best they can be in the office and the best they can be at home. And that also means contributing to society. So, one of our gifting days a quarter, we ask our staff to gift that day back to charity or community service. And what we’re really trying to do here is say that, people need to have a whole life and my formative years in business was spent working every hour God sends, it cost me a marriage, it cost me better engage with my children. I just don’t think that that’s the way to go. So, if I’m doing this for anybody, the starting point was I didn’t want my kids to do what I had to do. And if I can just make the lives of a few people better as a consequence of this, then actually, it’s been worthwhile. And I will say that in all the deals I’ve done and all the transactions we’ve been in over broadly about 40 years in business, this is without exception the best thing I’ve ever done. I make not a cent from it, but you don’t get many chances to change the world, and for better or for worse, I think this is mine.
We really admire you for what you’re doing. We’re happy to talk with you to have your story shared out there. You have a website. You have a book coming out. Tell us about how we can stay in touch with you.
Well, we have a website so www.4dayweek.com. We have an open website, we put all our research, all our contracts, exactly how we did everything, research stories from around the world. That’s all on the website. We’re always happy to engage where we can and help. That in turn has led to the book, “The Four Day Week”, which comes out in the States in January. And the reason for that is I just can’t drink this much coffee in that we’ve got business leaders all across the world who contact and say, look, if you’re in town, or can we have a chat. And so, what I’ve done is I’ve written this book, which has all the experiences and ideas that we used. All the profits from the book are going into two charitable foundations, one in the UK, one in New Zealand, we may have a third in America shortly. And that is to fund research. So, to make it easier for companies to do this, to be able to go and say to boards or to their shareholders, look, this is the impact. This is not a big risk. We are funding research around the world to provide more data so that companies can see that moving to a four day productivity, 100-80-100, whatever it is policy actually makes good economic sense and has material benefits as far as your employees are concerned.
Well, we’re excited to be a small part of that, hope to get your message out, save you a few coffee trips so that people listen to this can get out there. But thanks so much for being on the show and we’re excited to continue to promote these ideas.
Thanks, Neil. Good to talk.
Innovator, entrepreneur and philanthropist Andrew Barnes has made a career of market-changing innovation and industry digitisation. Most recently, in New Zealand, Andrew triggered a revolution of the entire fiduciary and legal services industries, and the transformation he has led as the founder of Perpetual Guardian has positive implications both locally and globally (as evidenced by his announcement of the four-day week, which made headlines around the world).
The result has seen him establish 4 Day Week Global and the 4 Day Week Global Foundation with his partner, Charlotte Lockhart. Their vision for this is to provide a community environment for companies, researchers/academics and interested parties to be able to connect and advance this idea as part of the future of work. Through this work he is on the advisory boards of both the US and Ireland 4 Day Week campaigns and the board of the newly created Wellbeing Research Centre at Oxford University.
Andrew is a director of Complectus Limited, the company encompassing Perpetual Guardian and several other trustee businesses, is the director of Coulthard Barnes, chair of both the Regional Facilities Auckland board and the publicly listed New Zealand payroll provider, PaySauce. PaySauce recently launched a new draw-down service to give employees interest-free access to money they have already earned as soon as they earn it aimed at preventing people having to resort to pay day lenders (which charge up to 700% interest).
Earlier in his career, Andrew identified the opportunity for the evolution of real estate in Australia and was chairman of realestate.com.au at the time of its IPO on the ASX. Later, he becameCEO of Bestinvest, a US$5.7billion, UK-based investment management and advisory company, leading the sale to private capital in 2007. He was managing director of Australian Wealth Management Limited, a major Australian wealth management and trustee business that he led to IPO in 2005. Andrew holds an MA from Selwyn College, Cambridge and an ACIB (UK), and has attended the Program for Management Development at Harvard Business School.
Andrew also saved the historic classic racing yacht Ariki from near-ruin by purchasing her and undertaking an extensive restoration project which saw Ariki re-launched in April 2018 at the National Maritime Museum in Auckland where she is now berthed.
Andrew is a sought after keynote speaker and is regularly asked to address audiences internationally on subjects as diverse as governance, philanthropy and business, leadership, entrepreneurship, team culture and change management topics.