The Virtual CPA Success Show: Episode 74
In this episode, our host, Jamie Nau, Summit CPA's Director of Virtual CFO, and Jody Grunden, Partner at Anders CPAs + Advisors, discuss the 4-day work week with Morgan Witham, CEO of COLAB, and how she implemented it with her team and is finding success.
[00:00:01] Jamie Nau: Welcome to today's podcast. I'm very excited about today's topic, but before we get to the topic, I wanna let you know I'm also very excited about today's guests. So as always, we are joined by Jody Grunden from Summit CPA and Morgan Whitman from COLAB. So Morgan, if you wanna give a little bit of your background as well as COLAB's background, we really appreciate that.
[00:00:22] Morgan Witham: Great, and thank you for having me here. So my name is Morgan Withum and I'm the CEO at COLAB. We are a digital agency. We call ourselves a web-op agency, which is not a widely known term yet, although we are on a mission to change that. But the work that we do is really about designing and building website platforms through an iterative process and in a way that really sets our clients up for future success.
[00:00:47] So we're kind of done with this old model of launch it and leave it with our websites and really focused on this ongoing iterative process to continue to improve, continue to learn from data, continue to build out features. And kind of the other key part for us is really focusing on the holistic organization or company that we're working with.
[00:01:05] So you may think of a website as being primarily housed and owned by a marketing team, and that's certainly the case. Usually our primary point of contact is a marketer. Where we have found tremendous success over the course of our existence for 14 years is really using the information that we build, especially in the discovery and strategy phases of what we do to figure out how we can support, not just passively support, but really drive an organization forward.
[00:01:32] So we're very much focused on the vision, the long-term goals of our clients and not only focused on just a website design. So it's really built into how we build websites. We've got pretty strong points of view on how to build it in a way to allow it to live on indefinitely, to be scalable, to be flexible, and to really drive value.
[00:01:51] So, that's who we are. COLAB is based in Richmond, Virginia. Like I said, we've been around for 14 years. It was founded by Eddie O'Leary. And I joined the team about five years ago. My background is non traditional in the digital space. The first 12 years of my career was actually as a mergers and acquisitions investment banker.
[00:02:10] So finance and really learning about how businesses grow and scale and ultimately sell over time was where my strong suit was. And as Eddie was scaling the business, I think he is, as typical entrepreneurs are, best in that visionary state.
[00:02:28] And so I came on to really take the nuts and bolts of creating a strategy, and building a team to execute on that strategy. So I've been in the industry for five years now. And I’m glad to be here to talk about something that I think may strike a lot of your listeners as impossible and crazy, and I'm gonna work my hardest to debunk that.
[00:02:49] Jody Grunden: I’m all for impossible and crazy for sure. And I've known Eddie for probably close to 10 years. And he said it wasn't until he brought you on and took away his own title as CEO and appointed a new CEO that the company really started flourishing and it really changed the way that he, as an entrepreneur, looked at things.
[00:03:11] And so, a lot of kudos there. I mean, that's gotta be a tough one, I would think for him, you know, with him not speaking here, I mean, how do you think he took that initially–taking the CEO title off and giving it to someone like yourself who had really no experience in the creative agency space?
[00:03:30] Morgan Witham: It's a totally fair question. In fact when Eddie first broached the idea with me, which we had known each other prior to coming on board. I had worked with his wife for a really long time and I think my first response when he asked about it was, You know, I'm an investment thinker, right?
[00:03:44] I don't know anything about digital agencies. And you know, I think a couple things that I think speak very highly to his credit. One that was intentional on his point. He was like, that's the point. You can't get sucked into the day to day, which is accurate. I would be totally useless to our WordPress and developers or our UX UI designers in the thick of it.
[00:04:03] And so it was a very intentional decision on his part. Get somebody that can really focus on growing and scaling the business and not focus so much on the work. And I think the second thing that really speaks to his credit is because, to your point, Jody, you know, I could see that [title] being difficult to let go.
[00:04:20] And I had that same trepidation when I first started of, is this gonna be a strange push and pull and am I gonna step on toes and is he ready to really let go? And from day one, I think he's been very clear on, ‘You are in the decision-making seat. This is your responsibility.’
He really handed the reins over to me at the beginning and said you use me as a sounding board, and when we need to discuss things together, let's do it. But ultimately you're the decision maker.
[00:04:51] I think the biggest challenge when you're a founder is, there is a lot of inherent emotional ties to the work that as somebody in my role who is responsible for 30 some odd people and I take very seriously and keeps me up at night, there's still a very different relationship with that.
[00:05:16] I think the emotional letting go and when you're no longer in the seat where you are in the thick of the day to day or making decisions, but you're still holding on to some of the very natural anxiety that any founder would have, that's where there’s been a good challenge, but one that we've worked through together.
[00:05:34] It's been a wild ride. I thrive in a very steep learning curve. So for me it's been exciting. We've got a phenomenal team. Those kudos do not belong to me. I would have very little impact if it wasn't for the rest of the leadership team and the team that we work with day in and day out.
[00:05:52] So that's just kind of the approach that we take on it. I think I'm also very honest with my team about what I know and what I don't know, so there's very little ego in terms of being able to say, I don't have the answer, but one thing I'm really good at is finding people who do have the answer. So I think the ability to learn and be resourceful has made it work really well.
[00:06:15] Jody Grunden: Kudos to you.
[00:06:17] Jamie Nau: It sounds like quite the adventure and definitely not an easy undertaking to jump into that role, especially with your background. So it sounds like it's been successful, which is awesome.
[00:06:26] So let's talk about one of your key initiatives or one of your recent initiatives, I guess. It's a thing that everybody dreams about, everybody talks about. I was actually having a conversation with my kids last night, young kids in middle school.
[00:06:39] We've been in school for a couple months now; my son asks why are you there so few weekend days and so many school days? And I was like, well, I don't know. Let's talk about it. That's what we’re talking about today. You have been able to successfully move your team from a five-day work week to a four-day work week. Let's start at the beginning and talk about how this was approached with the team.
[00:06:56] Morgan Witham: I'll kind of back up a little further even when this idea kind of started percolating in my head. It started last October. I was listening to NPR and they had an interview with another team and I can't even remember what the industry was now, but they had moved to a four-day work week, and they were talking about what they learned along the way.
[00:07:15] It's like the ideas you get when you’re in the shower or when you're driving. And I remember listening to it and being like that is duper awesome in theory.
[00:07:35] I didn't realize it until later, but I had been noodling on it and chewing on it for probably two months after that and just being curious. And so I really started to do a lot of research. Who's doing this? How do they set this up? What are the pitfalls they find when people do this successfully?
[00:07:52] Why is it successful? When it fails, why does it fail? Over the course of two months, I shifted from the initial thinking that I was doing in my head, to making a really long list of all the reasons why there's no way in hell that it would work. And that list was incredibly long.
[00:08:07] But my initial noodling was not at all “Do this; we should figure this out.” It was like, this can't work for these dozens of reasons. And then, I think it just kind of translated into curiosity. I started doing a lot of research and after the course of doing research, and shifting my mindset into “why the hell not? why couldn't it work? Why shouldn't it work?”
[00:08:30] I kind of very intentionally, for fear of being laughed out of the room, instead of bringing it up in our weekly leadership team meeting, I kind of picked off my leadership team members one at a time, and started off very candidly with. “Hear me out. Let me throw an idea out there and just kind of let me get through my thinking before you ask questions or tell me I'm crazy.”
[00:08:55] And I kind of went through an elevator pitch with them of why I think we should do it. Did I have confidence that it was gonna work? Absolutely not. But where I think it could be beneficial, what I learned in my research. And then after planting the seed, and to all of my team's credit, none of them looked at me like I was crazy, which was good.
[00:09:14] I at least felt like they were open-minded and in listening mode. So in a leadership team meeting, I really kind of pulled out, here's what I found. Here are some of the benefits they're finding. I think we are certainly not alone. I know we're not alone.
[00:09:30] We actually just had a sales call earlier today, and across all industries, finding and retaining talent right now is incredibly difficult and difficult in a way that I have certainly never seen in my 20 years of working. And it is not industry agnostic. It's happening everywhere.
[00:09:50] And we are not special in that. We are finding that to be the case as well. And so I really started thinking about it. We also compete for talent with not just very large agencies, but also very large companies that compete for the exact same talent in house. And so, what Capital One might be able to pay versus what a smaller agency might pay, there's a differential there.
[00:10:13] It's an appropriate differential and the work is very different and the work environment is very different. But how are we gonna compete? We can't throw money at it as the only solution. It could be a solution, but it's not the only solution. And just really thinking about it, and I think the pandemic has had this effect on a lot of people as well and kind of forcing us to sit down and really think about what's important.
[00:10:35] So, I'm also no different in that regard. I've had my own kind of personal journey over the last couple of years of thinking about what's important and a little bit of reframing there. And I think all those things kind of culminated in one. When you do a lot of reading about the history behind the five-day work week and the history behind nine to five, it just felt more and more obscure and I think I just really bought into this idea of neuroscience tells us that neurons can't connect.
[00:11:07] We can't kind of connect these ideas and create new neural pathways when we're actively thinking that work happens when your brain is at rest. And how can we get to a point where we're not? And I think a lot of agencies share this, where you just go, go, go, go, go all the time.
[00:11:23] And you're in meetings with clients all the time, and you're doing work all the time, and there's very little time to think and connect the dots and let things kind of maturate and come to fully formed ideas. And I just kind of bought into that idea of like, if our brains were able to rest, what other ideas might come up?
[00:11:44] How might we enjoy our lives a little bit differently? So one of the things that in my research became very quickly apparent was this idea of incorporating the whole team, the whole company, into building this policy for a few reasons because I don't have all the answers, and I also knew that I wasn't gonna catch all the blind spots or all the pitfalls.
[00:12:06] And there's no way to kind of address that with a policy out of the gate. So we decided to pilot it. We rolled it out to the team. In a really honest manner, which was, you know, we wanna do this for quality of our lives. We wanna do this to set us apart from other agencies. We wanna do it to really find and retain the best talent.
[00:12:26] And, and we want our hypothesis is that we can also start working towards developing even better work when we have time to kind of have creative outlets and think about this. So a couple things we did through the course of that pilot, we set up very clear KPI from the get go. We did not want it to be ambiguous.
[00:12:42] We didn't want it to be. Totally subjective. We needed clear, measurable kpi. So set kind of a handful of metrics on the production side, finance side. And then obviously employee engagement. We had a whole kind of slew of things that we were measuring on the employee engagement and kind of satisfaction scale.
[00:12:59] And we're really honest about, here are all the things that we don't know the answer to. If four day work week doesn't work, do we go back to five days? Not sure; how are clients gonna take this? Don't know. If I find that I need five days to do the work instead of for, does that mean I'm no longer a fit at COBLA? We don't know yet.
[00:13:16] And really kind of, and we even started to treat it the way we treat some of our projects, which is have a raid log where anybody can jump in and be like, this is a risk. So for instance, we got flagged throughout the, you know, very early on our statements of work have our normal business operating hours.
[00:13:32] That's a Friday. What do we do? What's our kind of call if the client calls on a Friday, how are we gonna handle that? Who's gonna respond to that? So, we just tackled them one by one, kind of every week we went through it. Got feedback from the team, and the message from the get go is, if we succeed in that, we'll do it together.
[00:13:50] If we don't succeed in that, we'll do it together. But this isn't just a leadership team coming up with a policy and rolling it out. This is, we've gotta figure it out together. So I think that that was kind of what went into our approach for the initial pilot.
[00:14:05] Jody Grunden: With your management team, do you approach the entire team itself, not just your management team, but everybody was put in phases. Okay. And they were pretty much all, all in favor of it or did you have a lot. I'm not sure. It's kinda like your reaction. What was the total when you brought it? Because I remember when we went fully remote.
[00:14:26] Morgan Witham: When I brought up the team, it was like, they thought I was joking. And, it went from there.
Jody Grunden: What was the impression that your team felt, management versus you know, everyone else?
[00:14:37] Morgan Witham: Leadership team had more trepidation at the beginning. Same trepidation that I had the like and that was, there was one moment.
[00:14:45] And talking about it with the leadership team I thought, we can't do this. This isn't gonna work. And it was when my COO asked, okay, so if this doesn't work, Do we revert to a five day work week? People will mutiny. Everybody's gonna be so mad. That's when I had, that was my one moment of, oh, we can't do this.
[00:15:04] This is not cool . How that translated between then and making the decision to pilot it and roll it out to the team was realizing and, and we were, you know, simultaneously which yeah, in hindsight was too much change at once, making the change to Agile and so, The more we talked through that, like, okay, well let's play out some what if scenarios, what's gonna happen.
[00:15:24] The more we talked about it, the more I then kind of realized it's not just black and white. It's not just a four day work week or five day work week. Okay. So if, if it really doesn't work for the metrics, is it two, you know, half of a month is four, day half, it's five day. Is it once a month? Is it we pivot and do an unlimited PTO policy instead?
[00:15:44] I've kind of just realized there were so many shades of gray. I was either too stubborn or unwilling to kind of let the black and white have it or not have. Stop its inner tracks without trying it. So, we took that approach of, we don't know, and if it doesn't work, that doesn't mean some iteration of it doesn't work.
[00:16:04] So then when we rolled it out to the rest of the team, Jody, to answer your question, there is nothing like telling people that they will forevermore only work four days a week that gets people rallied around a goal. So it was very, very positively received. There had been some. Outside of just my head that started last year on this.
[00:16:22] We had one employee in particular who was really thoughtful and engaged in this process and like, was sending me research and really wanted to talk about it. Unbeknownst to him, I had already been kind of plotting this pilot. So we already had some kind of advocates for it. And part of the thinking in this too, We're kind of betting on this is the way that a lot of companies are gonna start turning in the next couple of years.
[00:16:46] Why not be the first instead of two years from now just jumping on the bandwagon of what everybody else is doing. Kind of how I felt about the unlimited PTO policy, that it was a little bit of a, once a couple people started doing it, then a whole bunch of others. And even that, you know, when I looked at the research, just didn't feel confident that was going to. The goals we wanted to achieve in the way we displayed.
[00:17:03] Jamie Nau: Take the advantage while you can. Right. Cause like you said, when it comes to hiring, just to have this out there is a huge advantage for you guys. And I'm sure you're already seeing the benefits of that. So as you, as you know, you're speaking with two CFOs and so Jody and I are probably right now thinking, okay, before you take any of these steps, hopefully you talk to a CFO and kinda put a forecast together and figured out how you're gonna make this work financially. I'm curious about how much modeling went into this, and then what were your conclusions from that modeling? Or did you guys just jump in and say we'll make the money work?
[00:17:38] Morgan Witham: Yeah, no modeling for sure. Not, not quite to the level that I know Summit does. And this was pre working with Jody's team. But, to Jody's team's credit, our CFO on his team when we first talked about, did not think we were totally crazy. She was very curious. So we did some financial modeling and figured out, okay, what do we have?
[00:17:56] What is our billable target that we have to hit? That's something we already know. So then it's kind of like a game of extraction and it's more about like, what if we're so gonna hit these billable marks? What do we then have to remove to enable that? And so it was a pretty thoughtful exercise.
[00:18:12] Literally pull every single recurring meeting up that any single person on our team has and a long exercise of keep, kill, combined. Which I think was probably a bit of a relief for all people because I think everybody experiences this meeting fatigue.
[00:18:28] sometimes we're really disciplined about making sure, like if you leave a meeting and your first thought is that it could have been an email, we need to get rid of that. I think, over time, it bloats again and then you kind of have to pull it back. So that was the first step is knowing what our billable target needed to be.
[00:18:44] And what we needed to hit in order for it to not negatively impact our financials. And then two, okay, well what has to go then? Because we can't, then squeeze, and for clarity's sake this isn't a compressed work week. So it's not 40 hours in four days. It is just, our team works 32 hours.
[00:19:02] And so knowing what our billable expectation is, What do we have to carve out that is not billable time in order to do that? So that was part of the modeling as well. That has not been as easy, and certainly there were some ramifications of kind of pulling out internal meetings that I think we've had to find other ways of.
[00:19:20] Working through, I think we realized and got feedback as we went through the pilot that it did feel like we were removing some of that like connective tissue time, which is already very difficult in a hybrid, mostly remote model, which we operate in now post post covid. So that is something that we don't have kind of a one and done complete solution for that.
[00:19:42] But something we're really keeping our eye on is if there is connective tissue kind of internal team connected tissue that's lost as a result of shaving some of that time together. How can we find other ways to replicate that? Or how does that, how does that knowledge get baked into our kind of final policy that [00:20:00] gets written?
[00:20:01] Jody Grunden: Yeah. We just got back from a conference, Jamie and I did, and there are a few companies that did go to the four day work week and a couple questions. I want to kind of get an idea where you're at on this is that A specific day off, meaning a Friday? Or does everybody choose the day off they want?
[00:20:16] The other thing is, even if you have that day off, is that day off truly a day off where they're, they're, they're no longer working at all. Or are they doing R and D and catching up on non-billable stuff? How did you define that by a four day work week?
[00:20:31] Morgan Witham: Yeah, so we had a lot of debate on, is it one day a week or does everybody choose. Where we came out was one, one day Fridays for everybody they have off. Okay. I have seen data that can support either, so I really think it depends on what your goals are for this and how you work with your clients and how your internal teams are structured.
[00:20:51] For us, my worry about having anybody pick the day that they want off is that the onus would fall on our pro, our project managers. Our Scrum masters our people who are working to kind of get things scheduled and connected. And I didn't want the onus of that scheduling conflict to fall on kind of one person or one role or one team.
[00:21:10] So for us it felt like the best way we can manage that is by having the same day off. I will also say that prior to Covid we were all primarily working in the office, but we had already had a one day that was dedicated, no meeting work, remote day. And our team was very much used to having kind of this dedicated day that we knew we didn't schedule meetings for.
[00:21:31] That was a Thursday, and we felt like in order for us to not have additional negative impacts, we needed to stick with the same day for everybody across the board. Shoot. Jody, I forgot the second part of that question already. Can you remind me?
[00:21:44] Jody Grunden: So it was the changing and then on that day off, are you completely off?
[00:21:51] Morgan Witham: We are totally off. People are completely checked out. We do have a kind of a, a backup that swaps from member to member of ust keep an eye on this kind of support channel that we stood up for this so that if there's an emergency, we have a process that we follow to do that.
[00:22:07] But we've had very few cases of that happening, I mean, outside of a real emergency. And with the type of work that we do with websites, a lot of time if there's an emergency like downtime for instance it really goes to the host provider anyway. But we do have a way that we can respond. And so we do, but we've that we've really needed that. Very rarely. So it is, you know, it is very hands off. In terms of what people, I mean, we have this whole Slack channel where people are posting what they're doing on Fridays.
[00:22:47] That's been a really kind of, team building exercise for us of like, you know, volunteered at my daughter's school went hiking. We have had people who invest in some professional development on that Friday. And I think some people do like it to get organized and prep for the next week, but there are no expectations.
[00:23:03] And on the whole. People are not working on Friday, I think perhaps the biggest challenge has been at the leadership team level is making sure we're setting the right example even if we feel like we're having to play catch up. So it's maybe been, it's gonna be a longer path getting to that timeframe for me and some members of our leadership team.
[00:23:23] But our goal is to really, to really get there. But no expectations. You are off. It is officially a weekend day.
[00:23:30] Jody Grunden: What about the holidays? Like you typically have like nine holidays a year roughly. How'd you handle that?
[00:23:34] Morgan Witham: We made the decision that for weeks where there is a holiday, the holiday we do, we have nine holidays.
[00:23:42] The day that we have the holiday is the day that we take off that week instead of Friday. And here was the rationale behind that. The purpose of the four day work week is to work four days a week. The purpose of the four day work week is not to never work on Fridays. And when you talk about having 52 new days of PTO built into the year, we felt like it was a fair kind of way to meet in the middle for those holidays.
[00:24:05] Let's have that be the day off, especially for our team members with kids when you have holidays where maybe not the bigger holidays like Christmas or Thanksgiving, but holidays. A lot of times schools are off, for instance, that we wanted to still follow our holiday schedule. But we felt like it was an appropriate balance to have that be the day off.
[00:24:22] And so the way, you know, to avoid confusion, we're really good about proactively reminding people in advance of that holiday. We block people's calendars already with the invite for four day work week on Fridays. And whenever we have a holiday, we kind of open that up on the Friday and instead block off the holidays.
[00:24:39] We go kind of the extra step to make sure it's communicated because it is, it's kind of easy to forget.
[00:24:44] Jody Grunden: So like if the holiday falls on a Tuesday, you would, the Tuesday they had, they'd have that off and then they could take a PTO day if they went Monday off as well. You know that, that type of thing?
[00:24:51] Morgan Witham: Exactly. And then the other change that we made logistically was to our. Our vacation PTO schedule, so we have a kind of scaling based on tenure PTO schedule. Three weeks, four weeks, and five weeks based on certain anniversary milestones. and we did make the change to have three weeks equate to 12 days.
[00:25:12] Four weeks equate to 16 days and five weeks equate 20 days. And again, the rationale there was to be able to take a chunk of time off one week. Some faculty members like to do a good big two, three week. And that's fine. We still wanted people to take that, but since Fridays are off anyway, that's how we wanted to approach that.
[00:25:32] Jamie Nau: So it sounds like a lot of the stuff you're talking about, again, it sounds, a lot of that is you're adding hours back. So you're starting at the 52 weeks. So 52 days, we're gonna take 52 days off. That's x number of hours that we're gonna lose from a financial standpoint. Then take some of those for pto, some of those for vacation. So it sounds like you've kind of built back to where it's not actually a 52 day impact, which is, which is really smart.
[00:26:00] Morgan Witham: Yeah, exactly. It's it turns out to be more like a 30. I think where it lands, depending on kind of the vacation schedule and where, how much PTO people have. Still a significant boost from kind of the, what would otherwise be, probably 26 days for somebody coming in between holidays and vacation. It's not a full 52 days. In addition to what they have.
[00:26:18] Jody Grunden: And then on a typical work week, it varies dramatically, but we see as low as maybe 30 hours a week to as high as maybe 38. That, yeah, during a 40 hour work week, here's what we want you to bill.
[00:26:28] You know, assuming your holidays, assume nothing else, but kinda like the weekly expectations. So yeah, I assume yours is around 32 ish before you made the change and. What's your weekly expectation now that you've made the change?
[00:26:40] Morgan Witham: 29 now. So we did kind of adjust it a little bit and you know, there's so many other factors that are going into kind of our billability and how we think about it. One is we are trying to shift away from. A majority of our engagements being on a time and material basis and shift away from really just input space pricing to outputs based pricing or value based pricing.
[00:27:02] That is an evolution; we learn how to do that and get better and better at doing that effectively. But that's played a huge role in this, too, is that it to move away from it being so contingent on the exact number of hours worked and figuring out ways which we think is very fair based on the value that we know we provide our clients.
[00:27:19] Some of our past experience, we look at it and think, Man, they got, you know, an additional 30 million of revenue as a result of this work that made no sense that we build on a time and material basis. So I think they're kind of all of these not related to the four day work week, but tangents that in some way impact the effect that the four day work week has on our financials.
[00:27:42] Jody Grunden: I would expect that, okay, you, you rolled this out, you did the pilot and everything worked perfectly the first time. Is that how this works?
[00:27:50] Morgan Witham: Oh, of course. No problem at all. Just the Hollywood movie. No, no hiccups. We had all of the answers and no stumbles. No that is never the case. That is for sure so many learnings. I'll put that spin on it. You know, the biggest learning, which I'm almost embarrassed to say because in hindsight it is so painfully obvious. But we not only in March rolled out the four day work week, we also made the decision to start transitioning to an agile process.
[00:28:14] So started training our team on the agile mindset and figuring out what agile even meant for an agency, which, there's a whole nother podcast in and of itself, to which, I won't be your best person on that because we are in the thick of figuring that out. So we made the decision to transition to an agile framework.
[00:28:30] We made the decision to start moving to instead of shared resources for our staffing to a dedicated team model at the same exact time as we rolled out the four day work week. So, as you can imagine, that is a lot of shock to a system that has. Clarity on roles, clarity on process, expectations are clear, and we kind of shook it all up.
[00:28:51] At the time they just, they all seemed like such good next steps for where we are in our growth as a company. And I sure as hell wasn't gonna be like, oh, once I had momentum on a four day work week, I was pretty pumped to, to roll forward with that. So we set the pilot in March. We set our KPI, what we wanted to measure, which was a range of, as I said, production, financial, and kind of sentiment is what I'll kind of lump some of the others in.
[00:29:16] And then we said, okay. We did a baseline survey for employee engagement and baseline survey survey for all of our metrics or baseline analysis of all of our metrics. A midpoint survey to make sure if people weren't adding stuff into the raid log that we were catching kind of the sentiment of what's working, what's not working, midway and post survey.
[00:29:34] Where we collected kind of the same really full feedback that we got at the baseline so we could start measuring. And got some really, really great results in terms of a lot of the things that we were kind of hypothesizing and wanted and, and wanted to see. So employee stress levels went down and feelings of burnout went down by a magnitude of almost 20%.
[00:29:54] Personal satisfaction went up like 25%, with physical health 30%, with leisure time 20, 12% in mental health kind of satisfaction. We had kind of big boosts in kind of self-reported productivity, and I'll get to billable hours in just a moment. But in terms of ability to kind of focus and find time to think creatively and innovate, which I think is really important.
[00:30:18] Energy levels. Lots of increases in that. In terms of billability, we saw a dip in by the time we kind of did our final report and survey. It ended up being a little closer to four months instead of three months; it was like three and a half. So in the two months in between, in April and May, we saw a dip in billable hours, a dip in financial performance, and then it popped back up in June.
[00:30:41] So when I sat down and looked at this, I felt like, and the other thing, we started seeing some trends, which is really positive with team collaboration, Which was really good, nd our recruiting metrics, our people metrics. So you know, a hundred percent of the respondents that joined.
[00:30:57] COLAB after we started this pilot said that that was a significant deciding factor in their decision to join COLAB. And we were getting a lot of feedback; the retention one is going to take longer to measure because it's very difficult to know. I mean, for a person to know, like I would have left otherwise, but decided to stay.
[00:31:16] So anecdotally, we feel like that has had some impact although not the magnitude we expected. So I can talk a little bit about how the four day work week is not actually a silver bullet, because I think that's something I did expect coming out of the gate, that this is gonna solve all of our problems.
[00:31:34] So when we got to the end of the pilot, I really struggled to isolate variables and figure out why we had the dip in billable hours in financial performance. I know it's very easy to say well, duh, because you were working less. But the reason that storyline doesn't totally make sense is because March was great and June was great.
[00:31:54] These two months, when I kind of looked back at that data, I realized we onboarded five team members. In that two month period, we're a team of about ranges from 25 to 30. That is a significant percentage of our team to grow. And so I just felt like this isn't telling the full story about the four day work week; we have too much going on.
[00:32:14] That was a bad decision to do all those changes at once, but here we are. And that we decided to extend the pilot another three months so that we could continue to figure out what the data is telling us. We're now coming up on the second end of our pilot; in fact, the final phase two survey just went out last week.
[00:32:31] So I don't have all the numbers yet, but will very soon. But do know from our productivity in terms of billable hours and financials, we have been rock solid for the last five months; that has been an awesome trend. And so, just anecdotally the feedback we've gotten about how life changing this, I mean, when you think about it, we've got team members with all sorts of lives outside of work.
[00:32:49] We have people who just had new babies who felt like this revolutionized how much time they could spend with their kid. We have people who care for older parents that are aging that can be more involved. We have people who have had hobbies they've wanted to do for years and have never made time.
[00:33:05] So I think the impact has been pretty revolutionary for our team members, just in terms of how they view their lives and work. Kind of going back to my point about it's not a silver bullet, which maybe sounds naive, It just is such a change that I really did expect this to kind of solve all of our people problems.
[00:33:24] And it hasn't, it's not. Working less hours a week does not take away the propensity for burnout. I think that's been one of the biggest, and maybe hardest, lessons that we've learned is that you can work 32 hours a week and still be burnt out. I think fundamentally, I’ve known this, I just didn't necessarily translate it into our hypotheses about the four day work week.
[00:33:45] But there is a lot about connection to the mission and what we do, clarity around the process. We're a team of people on the whole that just has so much heart for one another. I think there is no lack of care and love across the COLAB team, but there are challenges when you make a change like agile, like dedicated teams, even four day work week.
[00:34:09] There are challenges you have to work through to figure out ‘how do I do this with less time? How do I make sure I keep pace within those four days?’ And all of that can contribute to burnout. So we've seen a huge impact on our ability to recruit. We haven't yet seen, just from our data so far from this year, the impact that we had expected in terms of retention.
[00:34:31] But all we can do is use that as a learning lesson and continue to improve what we can. And, it's not the four day work week that's contributing to that. It's very much us just in this new evolution of our business and doing work differently and really having to figure out how to navigate those challenges.
[00:34:47] It’s not being a silver bullet was a bit of a shock to me. The second big shock to me was how receptive our clients were, and I realize it's because everybody's dealing with the same people issues. And, we had a very thoughtful rollout to our clients.
[00:35:12] We had a communication plan. Who was gonna make the call, who was gonna follow up after that? And making sure we kept the door open to our clients. So, you call me if there's any kind of trouble that you have; we don't have the ability to fix it if we don't know about it.
[00:35:28] And on the whole, we have just had, it's been so well received by our clients, and I think in some regards for some of our clients, even, I think tremendous respect for like, man, you guys really care about your team. So I, that kind of surprised me. I kind of thought they'd maybe not be upset about it, but not.
[00:35:48] Not receive it the way that they did. That was a big surprise. And the big thing would be is, you hope they don't throw it back on you, too. Right. Okay. It's great when you first announce it to them, but then like a month later they see their first mistake or a problem happens and they're like, well, this is because you guys aren't working as much as you used to.
[00:36:03] That's what I'd be worried about. And we'll have to keep tabs on that. I mean, that's something that we really do. It's not something we can leave once we're out of investigating mode in the pilot.
[00:36:15] It's something we've gotta really stay on top of for sure because we don't want our clients to feel in any way, like this is negatively impacting our ability to keep pace with the work. So far, the four day hasn't impacted our ability to keep pace work. It may mean we need to add more resources than we otherwise would've, but we have levers we can pull to make that work.
[00:36:34] But we don't want them to ever feel like I don't have a partner that's here when I need them. I have no doubt there will be a hiccup on that in the future. Our goal is to mitigate that as much as we can.
[00:36:56] Jamie Nau: Great. So, we are at the end of our time here; it has flown by, but I wanna give both you guys a kind of a chance for last thoughts. I think we unpacked it a lot here and I know I was kind of taking notes throughout cause there's a lot that I was learning as well. But I will give Jody the first crack of his his final thoughts
[00:37:03] Jody Grunden: I would say that when I heard about the four day work week, it's something that we put in play like a long time ago and kind of got away from it.
[00:37:11] We didn't work on Fridays, that was our typical day or schedule, you know, we didn't schedule client meetings on Fridays. It was like, you can do whatever you want to do. And, we kind of got away from that over the past few years. But for those out there, I would never be one to criticize or to jump to, there's no possible way this can be done on anything.
[00:37:25] You know, so just keep an open mind. If this is how we wanna do it, the four day work week, what can we do? You've covered all the bases. You've covered how many hours work, you've covered how to kind of recapture those hours through holidays and so forth.
[00:37:44] And you covered all the different nuances that I could think I could remotely even think that you would have to address. And then you rolled out into a pilot, which was great, knowing that, hey, team, in three months this might be reverting back and might not want to, but this is how it might work.
[00:38:01] I think is a very smart way of doing it. So I definitely know why, why Eddie had such high praises for you. For sure. Because if you ever wanna run a CPA firm, let me know.
[00:38:12] Morgan Witham: Appreciate it. I'll pass along the job opportunity.
[00:38:18] Jamie Nau: Morgan, what's your final thought for the listeners?
Morgan Witham: I'm not sure I could be moved from my stance on involving your team. If you're thinking through this process, I don't think any one person or even any one team can think through all the variations the people who are on the front line see, from the smallest things, like what's in a contract, to bigger things; you need the team to help rally around you. It requires the team to solve those problems. So I think there's also just getting that buy-in and allowing them to be part of creating that policy has a big, a much different, bigger effect than just kind of, here's a new policy.
[00:38:58] We've thought through all the variations, so use the team. It's not a silver bullet. You still gotta focus on all other aspects and angles that can cause burnout or dissatisfaction. I totally agree with Jody just because it seems impossible, I'm not sure that it is, and I don't know if that's because I'm slightly contrarian by my nature of risk.
[00:39:17]. Jamie Nau: I’m not a particular risky person. But I think it's challenged that I think when your knee-jerk reaction is, can't be. Ask why and see what comes out. I think this has been a great podcast for not only the four day work week, but for any of these big ideas, right?
[00:39:35] How to bring them out and how to roll them out. So I think this has been a really, a good roadmap and hopefully our listeners will take this and be like, you know, I've been thinking about doing this for a while. Maybe I can roll it out using this model. So whatever that big idea is, this has been a perfect roadmap for it.
[00:39:48] I know in our time at Summit we've rolled out plenty of those big ideas, it's important to have that plan and get the team involved. So, great job and appreciate all you.