A closer look at companies executing leadership excellence

In May this year, Stephan Aarstol effectively doubled the per-hour earnings of every employee at his business, Tower Paddle Boards. Yet payroll didn’t budge. Aarsol did this by exploiting the insight that, for startups, time is a more malleable resource than money. So instead of giving his employees salary raises, he reduced the company workday to five hours.

Aarstol, you may recall, is the guy who froze during his 2012 pitch on ABC’s Shark Tank, but still walked off with $150,000 from Mark Cuban. Today, he and his team of nine operate the San Diego-based online paddle-board business.

Here are some ways the 5-hour workday has helped Aarstol’s team thrive:

Employees are trusted to use discretion 
Tower’s official hours are from 8 a.m. to 1 p.m. Aarstol estimates people stick to that 70% of the time, although when things get busy they work longer.

Employees are both ambitious and disciplined
Workloads haven’t changed, so the policy is, in effect, a challenge to work smarter. Eager to join the exodus at 1, employees check email less, eschew social media, and minimize chitchat.

Teams set and follow their own deadlines
In preparation for the shift, Aarstol instructed his staff to read The 4-Hour Workweek, by Tim Ferriss. The book emphasizes the 80:20 rule (80 percent of productivity comes from 20 percent of effort) and urges workers to analyze everything they do to identify what creates value and where waste creeps in.

Everyone is a stakeholder
At the same time Tower shaved its workday, it introduced 5% profit-sharing. Together, those policies nearly doubled everyone’s earnings.

A boss who practices what he preaches
Aarstol himself works more than 25 hours a week but tries to model the moderation he wants others to enjoy. If things are running smooth, he might take off for three weeks to Africa, or Colombia, or Southeast Asia–something he’s done each of the past four years.

Be more focused, have fewer meetings—and then go home early. It sounds like a dream, but Tower Paddle Boards in one company that’s proving it can work.
Kudos Towers!