It pays to give the boss a break

FT

July 25, 2013 5:30 pm

By Jonathan Moules

Unplugged: Jim Hemphill says distancing himself gave him a new perspective on the business

During a 20-year career in the US banking industry, Jim Hemphill did not take a single holiday that lasted longer than 10 days.

It looked unlikely he would alter this dedication to the workplace when he switched from being an assistant vice-president at Merrill Lynch to co-found TGS Financial Advisors in 1990. After all, starting a business tends to demand more of your time, not less.

But then Mr Hemphill, who is based in Radnor, Pennsylvania, joined a programme that explicitly teaches ambitious entrepreneurs to take time off from their companies. He began to change his habits with an extra day’s holiday, in which he completely separated himself from the office. He then progressed to a week. This built to a point where, a decade later, Mr Hemphill told his wife that he wanted a year away from the business in order to travel with her and their three children across 25 countries in three continents. They eventually achieved this between 2007 and 2008.

Taking a break has not just been good for the family, Mr Hemphill says. Since he started his new holiday regime, his company has increased its revenue tenfold, an achievement Mr Hemphill claims is a direct result of his new work schedule: “Some years are better than others, but the fewer days I work, the greater my measurable economic results.”

The benefits may sound obvious to those who do not struggle with finding a balance between work and pleasure. “When you are more tired you become less productive,” Mr Hemphill says, as if this were some new revelation about the human condition. But such a behavioural change is clearly difficult for those with an entrepreneurial devotion to building a business of scale.

A recent study by Sage, the accounting software provider, found that, among 1,000 owners of British small businesses, 57 per cent felt that having more time to think strategically would significantly benefit their business and aid growth. However, 28 per cent of these bosses admitted it was impossible to think strategically within a work setting as most of their time was consumed by administrative tasks such as invoicing clients, managing employees and ensuring compliance with new regulations.

Support for sabbaticals has gained traction among those archetypes of the Protestant work ethic, American founders of technology start-ups.

Brad Feld, an angel investor based in Boulder, Colorado, who co-founded the TechStars accelerator programme for early stage technology companies, has nurtured the concept of taking a weekly “digital sabbath” for a day each week, although often extending over a weekend. The theory is that founders not only take time away from their company but turn off their various electronic devices and put an out-of-office note on their email to resist the temptation to reconnect.

Brad Feld’s advice for taking time off

Brad Feld, an angel investor based in Colorado and co-founder of TechStars, offers the following advice:
● Make it a formal break.
● The length of time off should be fixed, be it one month or six weeks.
● Breaks should be available for every employee after a certain amount of service.
● Have someone else step into their job during their sabbatical. This is a chance for fresh eyes on a role.
● The person should completely disconnect. No checking email. No calls.

Mr Feld says he is also a “huge fan” of both taking and offering employees longer breaks of many weeks. “The person should completely disconnect during the sabbatical,” he says. “No checking email. No calls. Total sabbatical.”

He also supports a US movement for “paid, paid sabbaticals”. This is a concept created by Bart Lorang, another technology business founder, in which employers pay their staff to take extended leave from work.

Mr Lorang’s business, FullContact, offers each of its employees $7,500 to spend on a holiday. The only requirement is that they cannot work while on their vacation and must turn off their devices.

Another owner-manager who offers staff sabbaticals, as well as taking them himself, is New York-based entrepreneur Matt Blumberg. His company, email management business Return Path, offers all staff a six-week paid sabbatical after seven years continuous service, then again after another five years, and he has now taken both.

“We started off doing 75 per cent pay or 80 per cent pay, unless the person did something vaguely related to work,” he says. “Then [we] decided that was silly, as the real benefit to the company was when people did nothing related to work at all.”

When Mr Blumberg took his, he claims the benefit was twofold. “It was great for me, and great for the company to run without me for six weeks,” he says. “CEOs can’t miss some things like board meetings and earnings calls. But six weeks unplugged is workable if you set your mind to it.”

Dan Sullivan, founder of the Strategic Coach programme that Mr Hemphill joined, takes 155 days off work each year. The number of companies signed up to the Strategic Coach programme has grown year-on-year to about 3,000 businesses, says Mr Sullivan. “Taking time off refreshes the brain but it also simplifies your brain,” he says. “You come away from the business thinking there are 30 things that need doing and you [return] knowing that only of five of those are important.”

Mr Sullivan believes that taking time away from the office reinforces the need for founders to be in charge, not in control. This is another way of describing what other entrepreneurship coaching programmes call “working on the business, not in it”.

David Engel, who describes himself as founder and chief motivation officer at Innovative Graphics, a Toronto-based marketing services business, is another convert to Mr Sullivan’s philosophy. Before joining the Strategic Coach programme, Mr Engel admits that he would go on holiday for a week but still call the office every day, not just in the morning but also at the end of the day.

Mr Engel has not converted to extended breaks – the longest he has been away to date was an 11-day trip to Israel – but he takes long weekends, from Thursday to Monday, when he will completely disconnect from the office by turning off his BlackBerry and refusing to take calls.

“I delegated more and I told the people in the office that if I called on a free day they were to hang up the phone on me,” he says.

Mr Engel claims his company’s success would not have been possible without the benefits of taking time off. Since the regime was introduced in 1998, his company has grown from a one-city operation to a business that has outlets in the US and Canada. “Absolutely, I wouldn’t be across North America without this,” he says.

It is not just a matter of reorienting your life to have the discipline to take time off. Another key to the process has been appointing people he feels can do the essential jobs when he is not there. In two cases this has involved replacing existing people with those with better skills, Mr Engel admits. However, he adds that he also made sure he gave more responsibility to those he knew had potential to develop as leaders.

Although the reason for joining the Strategic Coach programme was to accelerate the growth of the business, Mr Engel claims that the benefits of taking a break have been as much personal as professional.

I wouldn’t have the quality of life I have today,” he says. “To me I now have a fairly full life. I do a lot of community work, I travel and I have a great family life. I wouldn’t have that if I hadn’t found the ability to take free days.”