Sam, AJ, and Asad discuss changes in work culture, productivity, and how to screen for work ethic during the hiring process. They explore the flaws of four-day work weeks and the challenges of maintaining a high level of productivity.
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Let's dive into this episode's key topics…
Focusing on Outputs vs Productivity per Hour
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- In the startup world, speed of execution is a competitive advantage particularly in early stages. Traba used to work six days a week twelve hours a day to stay competitive. But once they secured their series B funding, they scaled back to four days a week for twelve hours a day.
- The criticism of this approach is that you can't sustain it. You won't be able to hire great people because they don't want this. And even if you do hire people, you can't sustain this type of work ethic.
- But since very few people have been in an in-office environment consistently since 2019, people's work standards are all over the place and companies have not communicated what their work expectations are. It's very fashionable to say, who cares how many hours you work, just focus on the results. Which is not prescriptive enough, particularly for early career professionals.
- Focusing solely on output without considering hours worked is a flawed mindset, particularly for early-stage businesses. The goal is to maximize productivity per hour. It's important to have a clear understanding of the number of hours available each week and set achievable goals. The focus should be on continuous improvement and increasing productivity over time.
- Organizations and people leaders can do this by providing clear expectations as to what is expected and being less afraid to point things out.
The Flaws of the Four Day Work Week
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- Some organizations are adopting four-day work weeks, including a venture-backed company in Raleigh, Durham that AJ is considering joining the board. Despite the reduced work hours, they report maintaining the same productivity levels as with a five-day work week.
- Switching from a five-day workweek to a four-day workweek may seem appealing at first, with an extra day off. However, the compressed schedule can lead to longer work hours and eventually exhaustion.
- One can argue that other professions work under the same time constraints such as nurses. But these professionals are trained from the beginning to work like this. Tech organizations and individuals are having to make a shift.
- Another challenge of the four-day work week is, that companies are reducing the required productivity of that person, taking into account that compressing what was done in five days into four days can be flawed and reduce what is expected of each person, however, this ends up reflected in compensation, reducing individual’s pay.
- Studies on the four-day work week during the market's growth in 2020 and 2021 showed increased productivity and it can be argued that the economic conditions during that period may have influenced the results.
Questioning the Fundamentals of SaaS: Net Promoter Score
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- NPS is a measure of consumer satisfaction by consumer brands, which was later adopted by SaaS companies. However, its effectiveness is questioned as high NPS scores do not always correlate with high retention. You can argue that there is a need for a more nuanced approach to analyzing satisfaction and renewing potential and that relying solely on NPS may not capture the true value and decision-making process.
- NPS is a simple blunt instrument to ask one question the same way over time. It can be any question that you want. What matters is that you ask one question about customer happiness the same way, at the same time.
- Pavilion's NPS declined in April and May but has since been steadily increasing. Although churn has improved over the same period, NPS does not show a direct one-to-one correlation.
- Though, Pavilion has just completed a bunch of algorithmic correlation studies for our customer base, and has discovered that the act of responding to our NPS survey at all is more closely correlated to renewal, even if you give us a negative score. This tells us that most of the time people who fill out NPS care about the product or service and just want to be heard.