Creating a Greener Company Culture: The Importance of Energy Efficiency in Business

Nov. 1, 2008
The effects of rising energy costs are changing the way many senior-level managers consider their company's energy consumption

Escalating energy prices have given corporate leaders a wake-up call to devise ways to conserve energy. Energy efficiency is evolving from a corporate concept to a priority item on the CEO's agenda.

Over the past 5 years, the average company's energy costs have escalated from 10 percent to 30 percent. Some CEOs already have adapted to current conditions and implemented strategies to create energy-efficient facilities. Company leadership now must treat energy as an operational challenge that must be managed diligently, deserving the same attention as the purchase and utilization of raw materials. In some cases, a company's survival will depend on how quickly its management team can adopt energy conservation strategies.

While energy is a vital operating component, energy reduction does not need to be a cumbersome undertaking. With rising energy costs in the news, energy conservation should be seen as an opportunity, treated and managed as a company-wide initiative that will provide long-term benefits. As one corporate executive recently stated, “We know we have a lot of low-hanging fruit (energy waste) in our plant. Our problem is that it is still on the tree.”

Effectively managing energy consumption requires a commitment to educating workers. This involves energy awareness, empathy, best practices, coaching and action. Company leadership needs to modify employee behaviors in order to effect a cultural change throughout the company. It must start with the CEO and executive management regularly articulating their commitment to energy efficiency and its importance to profitability and the environment.

Company leadership also must lead by example. Upper-level management should be the first to incorporate cost-cutting measures in their own offices, facilities or departments. This demonstrates their commitment to the rest of the company, and that these initiatives are not simply window dressing.

According to one CEO, “The real secret to reducing energy costs is not in the technical aspects of the process; it is in the management attitude. A desire to reduce costs through good energy management and an effective implementation and monitoring program will always produce the results and the commercial benefits.”

NEW METRICS

Those responsible for implementing an efficiency program must focus on what often is a new and unfamiliar set of metrics without historical data for benchmarking. The goals they set must be communicated clearly to achieve sustainability. However, words alone won't do the trick. They must be supported by actions, tools and signage designed to remind people of the objective and their roles in achieving it.

The key to success will be to what degree workers can adjust their mindset. It is important that they execute their tasks as conscientious individuals determined to avoid energy waste. With an appropriate mindset, the desired behavioral changes will occur.

An easy way to implement this strategy is to point out the strong parallel to the efforts employees make in their own homes to keep heating, electricity, water and other variable household costs under control.

To change workers' mindsets, display graphics in high-visibility areas that illustrate how much energy has been conserved since the implementation of an energy efficiency program, as well as how this energy savings is making a difference on a large scale. “We saved enough energy to power the city of Atlanta for 3 hours last year,” would be a good example. This action enforces a “feel good by doing good” sentiment.

WAYS TO SAVE

Some waste reduction is easy to achieve. For example: Limiting the “on” time of lighting, conveyors, compressor stations, chiller plants and electrical motors to when they are needed for production. These objectives can be implemented by placing certain non-essential systems on a timer.

Less obvious sources of energy waste will require technical expertise of a third-party firm to identify, evaluate and determine solutions. These issues may include inefficient processes, ill-defined practices around energy use and the lack of clear ownership of energy management. More technical forms of energy efficiency can be realized through analysis of compressed air usage, ventilation systems, cooler fans, water treatment, temperature controls, furnaces, door seals, machine calibrations and a myriad of other issues depending on a facility's specific requirements.

The CEO commitment to cutting energy costs is critical. Once implemented, people can be held accountable for results. The establishment of goals, planning, data gathering and implementation will combine to create a sustainable cultural shift that places energy conservation in the forefront without major capital investment.

Wes Andrud and Joe Froelich are with Proudfoot Consulting, which specializes in implementing change to achieve measurable and sustainable performance improvement in client companies. Proudfoot Consulting is a part of Management Consulting Group PLC, one of the world's top 25 consulting firms, and is headquartered in Atlanta. For more information, contact Joe Froelich at (404) 260-0557 or visit http://www.proudfootconsulting.com.

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