Andrew Barnes and Charlotte Lockhart of 4 Day Week joined us on the podcast to discuss the 4 Day Week and the importance of measuring company productivity while working from home.
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.
Charlotte Lockhart is a business advocate, investor and philanthropist with more than 25 years’ experience in multiple industries locally and overseas.
As CEO for the 4 Day Week Global campaign she works promoting internationally the benefits of a productivity-focused and reduced-hour workplace. Through this, she is on the board of the newly created Wellbeing Research Centre at Oxford University and the advisory boards of the US campaign and the Ireland campaign for the 4 Day Week.
Learn more about the Andrew, Charlotte, and the 4 Day Week at: https://4dayweek.com/
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RealCrowd (00:00:00):
All opinion expressed by Adam, Tyler, and podcast guests are solely their own opinions and do not reflect the opinion of RealCrowd. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. To gain a better understanding of the risks associated with commercial real estate investing, please consult your advisors.
Andrew Barnes (00:00:23):
Yes, and I think if we start off, there are two premises that underline the four-day week as a concept and one is that you have to be able to measure productivity. And that was the key reason why I was initially testing the four-day weekend in Perpetual Guardian.
Adam Hooper (00:00:50):
Welcome listeners to another episode of the RealCrowd podcast. Today, we're fortunate to have Charlotte Lockhart and Andrew Barnes join us all the way from New Zealand. Andrew and Charlotte are leading the charge to help the world transition to the four-day workweek. When RealCrowd was considering our own experiment with a four-day work week, we came across their work and I knew we had to reach out. We talked today about the foundations of a successful transition, the parallels to the current COVID-19 crisis and, surprisingly, the importance of identifying the time that you aren't working as one of the major keys to success. As always, please send your feedback to podcast at realcrowd.com. And with that, let's get to it.
Adam Hooper (00:01:40):
Well, Charlotte, Andrew, thank you both so much for coming on today. You guys are our first guests coming from New Zealand. Beautiful country. I love it dearly. So thank you for jumping on today and having a conversation with us about the current crisis and also what you guys have been doing with the four-day workweeks.
Andrew Barnes (00:01:58):
Well, it's good to be here and there are worse places I can tell you to be in social isolation.
Adam Hooper (00:02:04):
That is for sure. That is for sure. So before we get in the conversation, why don't you both take a minute to give us a little bit of your backgrounds? I know Andrew, you have some background in the real estate space, on the wealth management side. And then we can get into what you guys are up to with the four-day workweek and where we find ourselves today.
Andrew Barnes (00:02:22):
Yeah, sure. Look, I was in the military way, way back and then went over to the dark side and became a banker. And then from there, moved a little bit more into tech, I floated a big technology business in Australia, and then came back into wealth and then into what is now trust companies. So I've been owner of Perpetual Guardian now since 2012 and that's New Zealand's largest statutory trust company.
Charlotte Lockhart (00:02:59):
I come from financial services background. And so I was working within the business for quite some time. And then as we brought on this whole four-day week gig, I've taken on the role as CEO of 4 Day Week Global.
Adam Hooper (00:03:13):
Fantastic. So the initial outreach for this conversation today was under very different circumstances, very different times and we, at RealCrowd, were doing some research towards the end of 2019 and came across your work with the four-day week as we were exploring doing that ourselves. So we committed to running an experiment here in 2020. It's been maybe a little bit derailed by the current crisis and, for reference, we're recording this in mid-April. But the initial premise was to talk about the four-day workweek as a concept and it's a concept that's getting more traction certainly within the technology industry here in the US. We're starting to see it spread some more.
Adam Hooper (00:03:58):
But before we get into that, too deeply, I'm curious, we find ourselves in a very different environment right now. A very disrupted work environment, which is, we're talking just before we started, the four-day week is a very different concept of the working environment together. So maybe we can talk a little bit about the current scenario of stay at home orders and most people trying to work remote or work from their homes. Have you seen any parallels between some of the changes that you've realized from the four-day experiment and in that work schedule that people can utilize or leverage for this very new disrupted work environment that's primarily remote these days?
Andrew Barnes (00:04:42):
Yes, I think if we start off, there are two premises that underline the four-day week as a concept and one is that you have to be able to measure productivity. That was the key reason why I was initially testing the four-day week in the Perpetual Guardian. The second is trusting your staff and actually giving them the challenge to say, "How would I change how I work in order to deliver the same amount of productivity in four days rather than five?"
Andrew Barnes (00:05:16):
Now, if you look at the situation that we find ourselves in, you've now got a whole bunch of people working from home. That requires trust. If you're not overseeing them every hour of the day, you then also have to know what productivity is. So bizarrely, the two key things that related to the success of the four-day week are actually fundamental when you're trying to make the shift to home working. And that's why our company, at least, this shift hasn't been that traumatic because we'd already disrupted the work pattern, we knew what productivity was, and we also knew that we could trust our staff.
Charlotte Lockhart (00:06:02):
And I think that's one of the biggest obstacles for businesses to take on something like the four-day week is that concept of being able to trust their employees to do this. And people often say to me, "Why aren't more companies doing it?" Reality is it's just leadership fear. But now, of course, we fear the virus more than fear [inaudible 00:06:25] trust our staff or not.
Charlotte Lockhart (00:06:27):
So we've had to jump change into this. And you've probably found in your business because you've already been analyzing this idea four-day week. You've already confronted the trust issue. Presumably, you've also already confronted what does productivity look like. So therefore, when you've got those ducks in a line, leaping to this isn't such a big thing. This, I think, is what we're seeing around the world, the companies that have done the four-day week thing and understand their productivity aren't needing to put this staff on full-time Zoom calls so they can supervise that they're working, which is a real thing. I don't know if anybody that's having that [inaudible 00:07:11]. Real thing.
Adam Hooper (00:07:13):
Yeah, luckily, we don't find ourselves in that position. We've got a pretty good amount of trust with our crew. We're fortunate there. But that's a really, really good point of the measuring of productivity and, as you said, we were already looking at doing this and we were already running this four-day week experiment within our company. So we had some metrics around that both internal and external. When we do our Fridays that we're not working, we have an autoresponder that goes out and we request people that are getting that autoresponder to fill out a quick survey so we can also test what the external input is from this change. For companies that are not already measuring productivity, in a way that can also be measured remotely. Obviously, changes from industry to industry, but what have you seen be effective for people that are maybe now have been caught off guard without those productivity measures in place? I mean, that's got to be a scramble for a lot of companies right now to try to figure out how the heck are we going to measure productivity with now a potentially completely remote staff?
Andrew Barnes (00:08:22):
Well, I think that's right and I think one of the difficulties now is that there are two things that you've got to play with. So one is that the overall amount of activity is down in a lot of companies. So the problem with that is that the easy way to have done this before would have just been to have looked at your profitability, your turnover, the number of clients you were dealing with, the usual matrix that you would have looked at in a business and said, "Well, actually, are those changing when we've got the staff working from home?" But the problem now, of course, is that you've got to adjust it for the overall drop in activity.
Andrew Barnes (00:09:03):
So what you can do is, you've got to start then looking at saying to staff, "How long? is it taking you to do tasks? How many tasks are you getting through?" If you can drill down to that level, you can isolate the way that productivity is actually happening even if overall activity in your company has dropped. It's not the easiest thing to do now, but you should be able to do it because your staff member can say, "Well, I did 10 tasks today." Now, did they normally do 10 or did they normally do eight because now they're not doing the commute, they're not being disturbed, children at home willing, or are they in fact then working longer hours? Because that's the next thing that you've now got to work out is that when there are no defined boundaries around your work day because you're at home, are staff in fact doing exactly the opposite to what we were proposing with the four-day week? Are they working longer hours?
Andrew Barnes (00:10:05):
So there are steps you can do, but it's clearly not as easy in lockdown. But we are getting company after company come to us and say, "Right, actually, we want to try it now," because they've had to realize that they can trust their employees, they need to get some grasp on productivity, and I think everybody is of the view that we don't want to come out of this unchanged. We have to [inaudible 00:10:32].
Adam Hooper (00:10:33):
Yeah, and that to me is one of the most interesting parts of this whole crisis to watch is what are some of those lasting behavioral changes that we're going to see coming out of this? Here in the US, most of us, I don't know if all the states right now, but the vast majority of the US right now is under some sort of stay-in-home order. That's a major, major behavioral change up and down the stack, from workplaces to retail to how do you go about getting your goods, how do you go about getting your gas, your servicing, your vehicles. It's a pretty dramatic change for a lot of us here. What is the status in New Zealand and how are people responding to those changes are in your area?
Charlotte Lockhart (00:11:23):
Well, we're in complete lockdown, so we're not just being asked to stay home, we are being told to stay home. Our borders are closed and are likely to be closed, they're predicting for at least a year. There is no travel. You are not really supposed to do anything else other than go for a walk around your very local area. You can't hop in your car unless you're planning to go to the supermarket or some sort of medical appointment. You absolutely can't visit friends and neighbors. The only real food shops that are open at the larger supermarkets. All of the smaller food shops, the butchers, the bakers, the groceries, they're all closed. You have to go to the to the larger things.
Charlotte Lockhart (00:12:19):
We're going for elimination rather than just flattening the curve, so quite a different environment. But our population seems to be very engaged with the idea of being behind us. We have a prime minister who is broadly adored, so that, I think, helps to rally people behind her. We don't have the division that other nations have around whether a leader is worthwhile or not. So that's what we have. Our workplace is quite different and was before COVID as well. We have quite strong labor laws. We have quite generous parental leave, and annual leave and sick leave, and various labor protections that don't exist in the US and they do it state by state. So I think that in the US market, this experiment with how we work differently that's been forced on us will have really quite far reaching consequences, I think, for the way that that people that people in the US work forward.
Adam Hooper (00:13:35):
Agreed completely. And again, the question is, will this be the catalyst that makes remote work more mainstream than it was before or will this be something that kicks off more of an adoption of the four-day workweek, right? If we realize that we can be as productive or more productive in whatever environment you find yourselves in these days, is that enough of a trigger to shift some of these very long-standing norms of what a workweek is or what that's required in favor of something that's maybe a little bit more respectful of that work-life balance? I think that's going to be really interesting to see how that changes.
Andrew Barnes (00:14:15):
Yeah, I think the challenge here is actually not going to be work-life balance that drives it. So it was interesting, the first country to actually come out and say that they were going to look to put legislation in on the four-day week was actually Russia. And the reason Russia were looking to do it was they have systemic unemployment. Now, I don't know what the situation will be in the US, but the commentators are saying that unemployment here in New Zealand could be at 13 and a half percent. 25% down on GDP and 13 and a half percent unemployment.
Andrew Barnes (00:14:53):
A lot of businesses, a lot of companies, organizations are actually now saying we should think about bringing our staff back on a four-day week not for work-life balance reasons, but we're going to come back and try and do a deal, we'll pay 80%, you only work four days. So that is, I think, where we may see the catalyst. The challenge for all of us is that we don't want to see 80%, 80% work become the norm.
Adam Hooper (00:15:26):
Right. That then becomes a reduction rather than a four-day week, right?
Charlotte Lockhart (00:15:32):
And the risk, of course, is that you actually do 100% of your work because you're working from home, and you're far more efficient, and remote working works, but you're still only being paid 80%. And there's a risk for us economically that we need to be mindful of.
Adam Hooper (00:15:50):
Yeah, which I think is a good transition into more of the foundation of what you guys are pursuing with the four-day week and some of the core concepts to it. So I guess let's start, first off, why did you transition to this? Why was this something that came on your radar, and was something that you experimented with, and have now stuck with for some time?
Andrew Barnes (00:16:13):
Well, the start point was I read the rules on a plane that said the Brits are only productive for two and a half hours a day and the Canadians for one and a half hours a day. I looked at that and thought, "Well, why is that happening? Is that happening in my business?" And I figured that actually, it probably was. So the start point was a very simple experiment of a two-month trial where I wanted to know if I would see changes in behavior in workplace if I traded a day off for my staff and they changed their behaviors when they were at work so that I got the same productivity in four days rather than five. Just an academic experiment in a way to see if that would occur.
Adam Hooper (00:17:08):
This wasn't a small undertaking, just so listeners are aware, right? This was a fairly sizable undertaking at a sizable company to experiment with something like this. How was that reception taken?
Andrew Barnes (00:17:23):
Well, I mean, it depends who you're talking to. My board, my leadership team, I think…
Charlotte Lockhart (00:17:30):
Most of the staff.
Andrew Barnes (00:17:31):
Most of the staff. Everybody told me it couldn't be done and impossible and luckily, I own my business. So it was easy enough me to say, "Well, fine. If this goes wrong, it's going to hit my back pocket." But I have a hunch that it might work. So yes, I mean, in New Zealand terms, we are a reasonably large business and so it was a it was an interesting experiment. Certainly, we're not a small company in New Zealand terms and we just thought we'll give it a go.
Adam Hooper (00:18:08):
To echo some things we talked about before, maybe you can walk us through how does that look like from an actual execution process? You have this idea, we're going to try this experiment. Did you then go and try to set up some of the parameters that you're defining productivity around? What was the process? Because this is a very foreign concept still in the US, right? We've seen some of it in the technology space. We've seen some bigger companies' experiments in other locations around the world with different work units. But by and large, I would say this is still a fairly unknown concept here in the US.
Adam Hooper (00:18:51):
So for listeners out there, maybe they're interested in this, they're intrigued in this and own their business or maybe work for a company and they want to try to take it to their higher ups or something like that, what does that process look like from here's an idea, here's something that sounds and concept interesting, how do you get from there to actually experimenting this or implementing this?
Andrew Barnes (00:19:13):
Well, the first message that I think we would say to everybody thinking about this is don't actually overthink it. It's actually not as hard as you might believe. And the reason it's not that hard is that the it works on a very, very simple assumption and that is engaged, empowered, happy, fresh workers will be more productive than not. So the starting point for me was to say, "Look, I don't know how I'm going to make this work. So what I'm going to do is I'm going to give you a month as a team to work out what it is you're going to do differently. Also, to work out how I should judge productivity," because I think in a lot of specially office-based businesses, we have absolutely no concept of what productivity actually is. What we do is we use the amount of time you're in the office as a surrogate for productivity and we have a view what the company produces at the end of the year. But in terms of actually breakdown by teams, by individuals as to how productive you are, frankly, in most businesses, we don't have an idea about that.
Andrew Barnes (00:20:33):
So we said to people, "Right, first of all, in your teams, work out how we should judge you." Now, in some teams, that's very easy. There are demonstrable outputs that you can measure. In other teams, that's not the case, especially those that are working behind the scenes in your organization. But we got a shape after about a month of how we should judge people and then we launched the two-month trial. Now, the real reason for actually saying to people, what are you doing with your day and how do we measure your productivity is actually not to understand productivity. It's to understand the work that you're doing or the activities that you're doing that aren't productive. How many meetings are you attending that you shouldn't attend? Are they dragging? How much time are you spending on the internet? Have you got time to concentrate or are you being disturbed?
Andrew Barnes (00:21:30):
And so all of those things together, when added together, lots and lots of small little hacks of work, lots and lots of small changes, that's what delivers the improvement in productivity. It generally isn't rocket science. Most of this is about better time management by individuals that, combined, delivers the better output. And the reason why it works is we're actually giving people something that they can't put a value on. We're giving them time. We're giving them time at a point that is valuable to them.
Adam Hooper (00:22:11):
Yeah, and that's a very interesting distinction. It's not necessarily about figuring out hacks to boost your output more than you were before, but reducing those distractions so that you can have more focus when you are doing the work. And I know, personally, that was something that I noticed very quickly was my ability and drive to say no became much stronger when I realized I had one less day to take that extra phone call with someone that maybe wasn't going to affect the business. The ability to have a much more harsh lens that I can run through which activities am I doing that are truly productive. Being able to cut a lot of those extraneous activities that really aren't moving the needle, that aren't impacting my productivity was a really big change that I noticed when we went to this experiment. So I'm curious, is there anything beyond that of the reducing distractions rather than increasing net output? Is that a fair way to look at it?
Charlotte Lockhart (00:23:19):
Absolutely. And I think the other thing to be to think about, of course, is that you start to respect your time, but other people start to respect your time as well because they respect their time. So it's about paying respect. But what really worked for us was the way that the staff were very collaborative around how they found the various different hex that might be needed. And that's why people say, "Oh, well, that would work in your business, but wouldn't work in mine," we'll I don't know. Have you got stuff that can work collaboratively? It's the collaboration.
Charlotte Lockhart (00:23:52):
I had a very [inaudible 00:23:53] young lawyer tell me once said it would never work in law. I worked for a law firm with 350 lawyers who all seemingly have degrees and I challenged him and said, "So you're telling me that if all 350 of you got together with all your clever degrees that you couldn't work out how to work differently in a collaborative way?" And that, I think, is the key thing that's why it will work in an office-based environment. It's why it works in manufacturing. It's why it works in all sorts of different areas because it's about how the people who are impacted find ways to help each other go home on a Friday.
Adam Hooper (00:24:33):
Right. And so, what you said there too was empowering those that are going to be subject to this to define their own internal metrics or their own internal measures of productivity helped with that baseline rather than coming from the top down of this is how I view productivity, rather, getting that collective engagement around how to define what successes, I guess, with this. Is that pretty helpful or how have you seen that dynamic play out in some of these different implementations?
Andrew Barnes (00:25:08):
You know, that's absolutely right. But I keep coming back to it, it's the identifying of the time that I am not working, that I am not producing, that really drives this. And so that got to come from the bottom up, not the top down. I can tweak a process from the top, I can bring in a consultant, I can re-engineer a system. But what that doesn't do is change behavior of the employee within each hour. So for example, we did a few things when we were doing the trial.
Andrew Barnes (00:25:43):
One of the things we did is we checked the amount of time the company collectively was spending on the top five internet sites in New Zealand. They were not work sites. These were social sites. The amount of time that people spent dropped 35%. Now, we'd have expected 20% drop, 20% fewer people in the office, dropped 35%. That's a behavioral change where people are saying, "Actually, I would rather get my work done and have a day off than go on Facebook." So that's part of what this is about. It's not just the traditional process re-engineering, it's about changing behaviors under mutual respect that Charlotte talked about
Charlotte Lockhart (00:26:36):
You can see how it easily happens. People think they've been very productive and they go on to, for example, a news site to see an article that is pertinent to their job and then you get distracted by the sports results. So it's that shift of behavior that people are looking for and that's the same in the COVID stay-at-home space as well. And our staff, very fortunately, they've gone through this mechanism in terms of what it looks like in their workplace and now they're going through the same exercise in terms of what are the distractions when I work from home. The refrigerator, the chores, the children, my partner trying to do a Zoom call while I'm trying to do a zoom call, all of those various new ways of working that we have to try and work out how we do that differently isn't the same as when we're working in the office, but the skills to find it are the same.
Andrew Barnes (00:27:42):
Yeah, we had this thing that was again, it's not rocket science, it was a little [inaudible 00:27:47] that one of our staff said is that, "Look, I need to have my quiet hour. I need to have the hour and I'm concentrating." So everybody has a little flag or a flower or something that they put in a pot and that is for a period of time when they need to concentrate. Now, you can't have it in all day, it's just for a period of time that you need to concentrate. And the reason for that, of course, statistically, you get disrupted every 11 minutes in an open plan office and it takes you 22 minutes to get back to full productivity. So by doing that, you could have an hour where you weren't disturbed.
Andrew Barnes (00:28:22):
Now, that's the same discipline that you've got to apply when you're at home. And of course, it's understood that, actually, that quiet hour is probably the equivalent of two to three hours of normal disrupted work. So if you can put that sort of structure around your day, and we tweaked that in the office, we moved the meeting table so they weren't next to desks, you couldn't eat your lunch at your desk because eating your reheated curry would disturb your colleagues at the time. We had phone booths if you are going to do a disruptive call of some form and we had a big, soft furnished back booths where if you were having in house meetings, you went in there and deaden the sound. So there were lots of little things that then people did that, effectively, drop the noise, drop the interruptions and then, with better control of diary, you then ended up with much better productivity. Now those lessons are equally applicable at home as they are in the office.
Charlotte Lockhart (00:29:29):
I think one of the things we find over and over again, though, is that people try and overthink this. It's one of the best biggest pieces of advice is, is just don't overthink it. Make the decision that you're going to do it and just accept that some of this you're just going to have to work out along the way because what will work in our business won't necessarily work in your business. I often say my four-day week does not look like your four-day week. Say for example, you guys are taking Fridays off, our staff take all sorts of different types of time off. We can't close on Fridays with our business, so we have staff who come in late in the morning or leave early in the afternoons, take two afternoons off a week, take two mornings off a week. Some big people do take a full day off, but it's not a Friday. And some people do take Fridays off.
Charlotte Lockhart (00:30:20):
The advantage of doing that in an organization the size of ours is that Friday off doesn't suit our business, point number one. But two, it's also not the day off that everybody wants. It's the time off that everybody wants. The one I use a lot is we've got a staff member whose husband's a chef, Well, a Friday would be useless to her because he's working on Friday and he works [inaudible 00:30:45] on Sunday, so that would be a third day that she'd have off where he wasn't off. So she used to take off the day that he was rostered off in the week and that works.
Adam Hooper (00:30:57):
I think that was one of the challenges that we came into this was just the logistics of how do you do that. We're a small enough crew that it was weird to have one or two people there if everybody else is gone to cover any customer service or inbound leads on that day. Do you round robin it? Do you have a strict… again, in our case, we just went to a no-Friday schedule. How do you see the implementation of this across… depending obviously on company size, whether or not you need someone to be there to cover customer service throughout the full work week. Is it generally a pretty flexible arrangement that you see have the most success or is it more of a full shutdown on a day or is it just really case by case?
Charlotte Lockhart (00:31:49):
You see, you're overthinking it.
Adam Hooper (00:31:54):
I am overthinking it.
Charlotte Lockhart (00:31:54):
What I hear from some of the companies around the world, like yours, they take a single day off. Generally, they are the smaller organizations, under a hundred people, is that there is a whole sense of hey, we're all in this together, we all have Friday off. So there's a team sense with that, which obviously you don't get if you're scattering it throughout the week. But it is very individual to how businesses… some people take Mondays off, some people take Wednesdays off, some people take all sorts of different things off. But you've got to find your own way.
Andrew Barnes (00:32:30):
And I think the reality is why we do it in a way where we're very flexible about it, Charlotte says we have people who take afternoons or come in late and go home early, whatever it is, we don't actually even think about that now. Each team organizes its own roster and they understand that customer service standards cannot fall. So that's an absolute prerequisite for anything. The reason why we allow the flexibility… we have this chap who takes a couple of afternoons off a week. For example, he walks home, he's getting fit, his daughter brings his granddaughter around, they do grandfather-granddaughter stuff. Two afternoons a week, they don't have tea together, daughter comes around and she takes granddaughter home. The guy tells the story and he cries. Now, that's what makes it work because he is getting something that is so precious, he will do anything to avoid losing that gift.
Andrew Barnes (00:33:40):
Now, more to the point, do you want to be the team member who has to look him in the eye, if you've been taking the mickey a bit and you've not been putting in so your team loses its four-day week option, are you want to be the person who can look the guy in the eye and said I did that to you?
Adam Hooper (00:34:01):
Accountability, right? That is so key to this and I think, like you said, the trust of before, that's absolutely crucial.
Charlotte Lockhart (00:34:09):
That's the primary reason why it doesn't slide. There are some people who say, "Oh, has it slid back over time?" It doesn't when people feel accountable to each other. Respect my time and I respect your time and you do the same.
Andrew Barnes (00:34:24):
We have a little mechanism too. Because of the way our employment legislation worked, we had to find a way to get round the employment legislation that doesn't contemplate that working pattern. I's normal days of work, normal hours of work, normal start time, normal finish time. So when you've got this flexible regime, it doesn't fit. So what we actually did is we didn't change people's contracts at all. You are contracted to the company five days we normal working debt. But you then opt in to what we call the productivity policy, unless you do it on an annualized basis. The productivity policy says that I'm committing to do what we call 100-80-100. It's 100% pay, 80% time, provided we get 100% productivity.
Andrew Barnes (00:35:18):
Now, part of that policy says that if you don't deliver on your side of the bargain, hundred percent productivity, we can get you back five days a week. So there is a stick. We've only ever had to use it once, but there is a stick that basically says if you start sliding down and we don't get our side of the deal, then actually, we'll revert to the old way. The reason we did that was if you looked at the French experience, the French legislated a shorter working week, 35 hours, initially, they got a bit of a spike in productivity and they certainly got better work-life balance. But then over time, people defaulted to the same patterns of work as they had before just in a [inaudible 00:36:10]. so productivity itself fell. So what we are trying to do was designed something that actually maintain that productivity. And in fact, productivity, of course, didn't just maintain, it actually went up.
Adam Hooper (00:36:27):
Yeah, I think the long-term tracking and impacts of this is something, again, with our experiment, we're still in the middle of. But that was one of the conversations we had just mentally and what kicked this off was I think we did overthink it once we started thinking about it. But the initial premise was when we have a three-day weekend, we come back so refreshed, so energized, so ready to just dive in headfirst and just get the work done that why aren't we just doing that all the time? And then the question was, well, at some period, you just adjust to now you've got a three-day weekend and that's just the new normal and you feel that same mental mind as you did when you're working the five-day workweek. I'm curious, because you guys have been running this experiment for some time. I mean, it's no longer an experiment. That's how you're running your business. How is the mentality or the psychological piece of that has that maintained? Is that improved? What is the actual team mental impact, I guess, happiness impact of this change?
Charlotte Lockhart (00:37:42):
Well, I think no one wakes up in the morning and says they want to come and work for a trustee company, right? We're a really poor [inaudible 00:37:50]. You're quite [inaudible 00:37:52], we are not. We [inaudible 00:37:55] wills, and trusts, and we're part of the [inaudible 00:38:00] market for our financial services. Boring. For us, this has been a really key way to attract great staff who are looking to work for a progressive style business. And so I think some of the happiness quotient that comes into our business comes from the fact that the type of people that we attract and the energy in the workplace isn't just from the four-day week concept.
Charlotte Lockhart (00:38:37):
One of the things that Andrew also often talks about is that this will shine a real spotlight on your management and people's ability to lead a staff in a way, and I think COVID's throwing us all in further disarray as far as that's concerned, and who will survive this will be the people who can manage teams properly and who can lead their companies in amazing ways. I think that's important now more than ever, but it's that imagination of leadership that people are drawn to and that's the company that we're all told we should be in. But leaders are very easy, just getting the red pen out on the Excel spreadsheet and cutting costs and cutting staff. This is a different way to lead.
Andrew Barnes (00:39:31):
I think the other side of it is I always remember when we first implemented it, some of the staff reported that they would be in cars, our branded cars, driving, and people would be giving them the thumbs up sign. One of our staff got an email from somebody that said, "You've got to make [inaudible 00:39:52] New Zealand."
Charlotte Lockhart (00:39:54):
Don't mock it up.
Andrew Barnes (00:39:55):
Don't mock it up. So we are slightly unique in that we are the pioneers of this in this country and some could argue we're one of the most high profile pioneers of this around the world. Now, that is also an important part of how it works, I think, for us as well. Now, later companies won't not necessarily get that same pioneering spirit, but at the moment, most companies that pick this up are still at the cutting edge of what, ultimately, I think, will become a movement. It will become the norm. So there is a little bit of of that as well, but I think that the reality is the big driver is this cultural change. I want my staff to be the best they can be in the office. I want them to be the best they can be at home.
Adam Hooper (00:40:51):
It doesn't sound doesn't sound so bad, does it?
Andrew Barnes (00:40:55):
No.
Charlotte Lockhart (00:40:56):
No. And I think the interesting thing is, of course, it's a journey as well and you will find that your four-day week that you do now were iteration to slightly different things at other times. When Henry Ford introduced the five-day week into his business, it took him three years to get it across all aspects of the business. And so I think that's another quite important thing. If you can't make it work across your whole business, doesn't mean you shouldn't try it in part of your business, and learn, and iterate so that you can get it through the whole business.
Adam Hooper (00:41:32):
Andrew, you mentioned a bit ago the productivity didn't just stay flat, you actually saw an increase in productivity once you switched to this.
Andrew Barnes (00:41:43):
That's right. That's right. I totally undercooked it because we had absolutely no idea what would happen. I just wanted it to stay the same. The reality is, I think, productivity has probably gone up about 20, 25% in our company. But you alluded to the experiments by American companies, obviously, the famous one is Microsoft in Japan with 39.9% improvement in productivity when they tried it. Now, one of the things that drives this comes right back to why I said the start point for us was to say to staff, "how should we judge you?" Nobody tells you that they are less productive than they actually are. In fact, they tell you they're more productive than they actually are. And we actually had to pull back the benchmarks a little bit in a few teams and say, "Look, seriously, you might think that's what you're doing, but it ain't that good."
Andrew Barnes (00:42:45):
So as a consequence, not only do you eliminate the unproductive time, but you also have a team signing up for a level of activity that they might have delivered, but in a lot of cases, probably that was slightly on the aspiration side and that binds to deliver better productivity. We call our four-day week policy a productivity policy for a reason. I'm a businessman. I'm not doing this, I didn't start this for work-life balance, I started it to do the tradeoff. Can I get better productivity if I change how we work? And so any business is my argument should be trying this because why wouldn't you not want better productivity?
Adam Hooper (00:43:36):
Again, I think depending on the business and I guess maybe the question back to you guys would be office work is fairly straightforward. You said even manufacturing, you see this in. Are there other industries that are better suited for this or some that are more challenging for this that you've seen maybe aren't set up just structurally that they can take advantage of this or is this just across the board universal to all employment sectors?
Charlotte Lockhart (00:44:09):
I think culture is really important. Let's stop, not worry just at the moment about the industry. If you've not got a reasonable culture in your business, then this is going to fail. If you say to your staff, "I want you to work four days, I'm going to pay you for five," no one's going to believe you if you've got a culture of distrust. They're just going to think you're looking to create redundancies. So it's really important, first and foremost, to look at your culture and make sure you're leading a company with great culture. Once you've done that and then you go down the collaborative, there are always going to be industries where this will be easier than others. But that doesn't mean that with the right imagination from yourself and your staff, you can't find a way to reduce the number of hours that you work.
Charlotte Lockhart (00:45:05):
Some industries, and we were speaking to one of the quite well-known companies here, they know that their average staff work hours is 53 hours. Well, you're not going to get down to 32 suddenly, are you? Because that's more than a 20% drop. So what we're essentially saying is look at your business and work out how your employees can work lease time for the same amount of money and still give you the type of return that you need in the business. So that's where it's so individual to your business or to your industry and it'll be different for different departments.
Andrew Barnes (00:45:42):
It's one of the great things about this one whenever we talk about this, that people will look at us as if we've got two heads and then they will pause. And then they will come up with an example of an industry, quite often one they don't even work in, that will prove that this will not work. But if you think about it, what industry in any part of the world is working absolutely optimally? So there will never ever be a better way of working because that's what they're saying. They're effectively saying, "That's it. How we're doing it today, it's as perfect as he can be." Now, we know that that's not true because we know that industries continue to evolve, businesses continue to evolve.
Charlotte Lockhart (00:46:36):
One of the industries or workplaces people would often say it'll never work in schools and yet the US is full of schools that are working four days. They're doing it for budget reasons. There's a whole pile of schools and-
Andrew Barnes (00:46:53):
Stanford's just introduced it for the medical school, yeah.
Charlotte Lockhart (00:46:57):
It just takes the wit of men.
Andrew Barnes (00:47:00):
Indeed.
Adam Hooper (00:47:01):
Yeah, we talked about a little bit before, it's just such a cultural norm that it's safe, right? No one's going to get in trouble for saying, "I'm going to work a five-day workweek." You're not sticking your neck out for that and I think it's being open to naturally in the entrepreneurial space, technology space is where we're seeing most of this because that spirit to challenge norms is how you build interesting new companies, right?
Charlotte Lockhart (00:47:32):
Yep.
Adam Hooper (00:47:33):
So the ability to just challenge this classical norm of has to be a five-day work week, eight to five, that's just what it is. How are you seeing some of the more or I guess some of these less risk-taking either cultures, in terms of countries, just societal cultures or business cultures, how are you seeing some of the more conservative businesses approach this change?
Charlotte Lockhart (00:48:00):
Well, there's four-day we can pretty much most countries around the world now. Turkey, and Russia, whole swathes of Asia, Europe, Africa. It really just comes down to, are you going to be the industry leader or not? Industry leadership or country leadership or leadership of any form recognizes that the future of work is not going to look like the way we were working six weeks ago because [inaudible 00:48:41] now and the future of work is going to be different. So you have to be a leader in what that is because otherwise, you're a follower and when you're a follower, someone else's employing all the good staff.
Charlotte Lockhart (00:48:55):
Andrew often says, if you're a software developer in Japan right now, are you going to work for Microsoft or their competition? You know you're going to want to work for Microsoft, right? Because they have this innovative way that they can consider workers to be.
Andrew Barnes (00:49:13):
I think what's going to be a circuit breaker, come back to where we started that, that as a consequence of the COVID pandemic, when we come out of this, we will have structural unemployment. But we've also started to see a few benefits. We've seen that carbon emissions are massively down. We have probably got better family cohesion, generally, as a consequence of people being able to spend time at home. We've probably got better diet and probably more exercise, bizarrely, because people are consciously now starting to think about this. How is mental health subject to the isolation component coping at the moment? We find that one in four, one in five of the workforce at any point in time has a stress or mental health issue.
Andrew Barnes (00:50:11):
So we know that there are significant economic benefits of adopting flexible working and/or the four-day week. Now, those arguments, I think, will start to come front and center post-COVID because we're all going to be working out how you restart the economy. Now, I'll give you a specific New Zealand example. Tourism is one of our largest industries. We've locked it down. It's not just vaguely shut down, it's finished. If you give people a day off a week, you're going to get more people using hospitality in the future. Is that a tool that we will use to restart our hospitality? It's a possibility? So I think that governments, which have been very hesitant for the most part, they've been the odd exception, governments will actually start saying that we need to start rethinking whether we bring this tool into our armory because actually, all the evidence suggests that the adoption of flexible working is something that will add significantly to GDP.
Adam Hooper (00:51:23):
And so I guess the natural question is, a catalyst like this with the COVID crisis, is now a good time to try to look at this policy and implement something like this on the return or do we need to get back to some form of stabilization before we take stock of what his productivity even in this new normal and then address maybe what that might look like?
Andrew Barnes (00:51:49):
The question really is, when do you think we're getting out of this? So I think if you're happy to drift along at the moment not knowing what productivity is, not working out how you engage staff, not worried too much about how your business is performing in COVID, then keep going the way you are. But I think if you are starting to think about it, then actually now is a great time to experiment with this. You need to make sure, by the way, that your staff are putting boundaries around. It's part and parcel of probably your discipline around making sure there are boundaries when there are no boundaries.
Andrew Barnes (00:52:29):
So my suggestion for most companies is what have you got to lose at the moment? You've got a highly disrupted workplace, you've got a highly disrupted economy. Actually, even making some of these experiments just starting to rethink about this because there is a thesis to say that for a lot of companies, they will find that homeworking is far more productive than their office. And if that's the case, actually is the norm, when we come out of this, homeworking, and you go to the office to socialize? That's the one day a week when you come to the office, to hang out with your colleagues have a few cups of coffee, do a few general meetings. You could run an argument to say that for some industries, that's where this goes. So now, I believe, is the time to experiment. Now is the time to get your staff engaged. And talking about this in an era when, let's face it, people are worried. giving them something that says coming out of this, there's going to be something better, it very well be a very positive message for your workforce.
Adam Hooper (00:53:47):
Like you said, I think it loops back to the original point you're making of trust and productivity. Those are two things that are so crucial to managing a workforce in this current crisis is do you have that same amount of productivity and if you haven't taken the time to define what productivity is, whether you switch to a four-day workweek or whether you are just managing your resources more effectively during this time of crisis, that's probably a good place to start for most right now.
Charlotte Lockhart (00:54:21):
I think the reality is we've got two things. Is your business going to survive, point number one, and is your business going to be one of the ones that will thrive once we come out of all of this? Surviving is going to realistically be something that everyone's trying to do and they're going to do that with traditional methods, cutting costs, cutting stuff, cut, cut, cut, but what will thrive look like? Because you've got to be cleverer than that if you're going to thrive. So the businesses that will do well in the end, whether they do well through this or whether they do well after this, are the ones that will have been able to have imagination in terms of how they got through. The traditional methods just aren't going to be enough.
Adam Hooper (00:55:16):
Yeah. Charlotte, before you were saying the companies that have a strong culture are ones that tend to do better with this transition. Given almost everybody's company culture has been just dramatically upheaved right now, anything that you've seen or any suggestions on how to maintain some sense of that company culture or is this a good shake up to try to redefine what that company's culture is?
Charlotte Lockhart (00:55:45):
I think this is an opportunity for leaders to really show what they're worth. Leadership, to a certain extent, is like being a great parent. The kids at home will feel safe if mom and dad have a calm, and steady, and decisive way of acting. The workplace is no different. Staff will respond to a culture where leaders take positive and firm action. That it has a sense of direction, but also has a sense of inclusiveness. We're all in this together a few. One of the great reasons why the four-day week implementation, the way we talk about it, works is it's a pact between our employees and ourselves around how are we going to make this work? And when you consider that it's a pact where both of you benefit…
Charlotte Lockhart (00:56:48):
So one of the criticisms I sometimes get from people is like, "Employees shouldn't have to have the risk of a four-day week being taken away from them. They should be able to have this anyway." It's like why? Why? Nothing exists without the other. The business exists with its staff and the staff exist because of the business. And so when you work on the basis that we both need each other and we're in it together, then that's the company culture that you want to create and people will do it. Andrew talks about his days in the military. Do you want to do your military thing?
Andrew Barnes (00:57:25):
It's a thing. In the dim and distant days, I was in the Royal Navy. People always say nobody goes over the top for a flag or a mission statement. We talk about mission statements in companies all the time and we're all meant to look at that thing and it's meant to inspire us. You go over the top for the person on the left and the person on the right. That simple. And this is what this is about. I have respect for my colleagues, and they have respect for me, and we're all in this together. If we do this together, we all benefit. It's very, very simple psychology as opposed to the traditional let's impose a process and from the top down.
Adam Hooper (00:58:11):
Yeah, I think that's a great approach to it and one that I wish had an easier time being shared and accepted. Respect for one another and, again, accountability is crucial to any successful work environment.
Charlotte Lockhart (00:58:27):
and I think leaders now need to understand that the main thing that these staff have is fear. Right now, they are probably the most scared that they will ever be. So creating a leadership and a culture which helps those people feel safe is really what's going to get you through.
Adam Hooper (00:58:50):
Very good. Well, I know you guys have to run here pretty quick. Maybe to wrap it up, I think it would be good for listeners out there that are either looking at doing this or intrigued by this conversation. Maybe just a quick hit, a couple of pitfalls that you've seen out there in implementations and a couple must-have requirements before you start an experiment or a shift like this. Any thoughts on that? And then we can get you guys on your way.
Charlotte Lockhart (00:59:21):
Don't overthink it.
Adam Hooper (00:59:23):
I see there was. I was overthinking it again, wasn't I?
Andrew Barnes (00:59:25):
First executive [crosstalk 00:59:27] rule, don't overthink.
Adam Hooper (00:59:30):
Just commit and do it, huh?
Charlotte Lockhart (00:59:32):
It's a bottom up process and management's biggest pitfall is trying to solve all the problems before they take it to the people.
Andrew Barnes (00:59:44):
The other thing is that this is not that scary. Look, we obviously have set up 4 Day Week Global, so we have the website 4dayweek.com. On that website is a pile research, pile of articles, the white paper we wrote when we did our original trial, the research that went alongside that. There is obviously my book, The 4 Day Week. It's written as a practical guide, all the profits from that are going to fund global research and the benefits of shorter working. So we're absolutely committed to this. But the reality is there's lots, and lots, and lots of data and if you look somewhere around the corner, there will be a company in your area that's during the four-day week.
Andrew Barnes (01:00:36):
One of the great things about this movement is that people are prepared to share for the most part. They will give you a steer on what works. We talk to companies every week from all over the world where they pick up the phone and say, "Actually, we're thinking of doing it. We've read the book. We think this is a strategy that we'd like to adopt. How do we do this?" And you'll find that people will share. It's not that scary because at the end of the day, all you have to do is run a trial and if it doesn't work, you can say at the end of that, "Guys, didn't work. We'll keep working five days." But your team will at least love you for having tried. So what's the worst that can happen? That you'll have a more engaged, empowered, enthused, loyal, creative team even if you fail.
Adam Hooper (01:01:35):
Pretty limited downside, it sounds like.
Charlotte Lockhart (01:01:38):
It is. While Amazon are obviously not sending out physical books at the moment, you can download the book digitally. And there is also an audible version of it. So if people are thinking about what is their post-COVID workplace going to look like and wanting to do some research, it's a very good place to start.
Adam Hooper (01:01:58):
Perfect. So the best place for listeners get in touch with you all, 4dayweek.com, is that the best place for folks to go to?
Charlotte Lockhart (01:02:05):
Yep, 4day week.com. And we've got all sorts of research out there from our researchers and others around various things that play into why this is a good idea and how it works.
Adam Hooper (01:02:19):
Fantastic. Charlotte, Andrew, really, really appreciate you guys coming on today. Wish we were able to do it in person. But alas, here we are. We got it done. Really, really appreciate your time and thank you so much for coming on and sharing all of your insights on the four-day week with us.
Charlotte Lockhart (01:02:37):
It was a pleasure.
Andrew Barnes (01:02:38):
Pleasure.
Adam Hooper (01:02:38):
Perfect. Well, listeners, that's all we've got today. That's the inside scoop on the four-day week. As always, send us a note to podcast@realcrowd.com with any questions. And with that, we'll catch you on the next one.
