The effects of rising energy costs are changing the way many senior-level managers consider their company’s energy consumption.
By Wes Andrud and Joe Froelich
Escalating energy prices have served as a wake-up call to corporate leaders 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 five years, the average company’s energy costs have escalated from 10% to 30%. Some CEOs have already adapted to current conditions and implemented strategies to create energyefficient facilities. Company leadership must now 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 cumbersome. 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. For example, one corporate executive recently said: “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.”
Fostering Worker Support
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 to effect 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 must also lead by example. Upper-level management should be first to incorporate cost-cutting measures in their own offices, facilities or departments. This demonstrates to the rest of the company that these initiatives are not simply window dressings.
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.”
Those responsible for implementing an efficiency program must focus on what is often 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 individual 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 mindsets, graphics illustrating how much energy has been conserved since the implementation of an energy-efficiency program can be prominently displayed in high-visibility areas. In addition, signs can point out how these savings are making a difference on a large scale. “We saved enough energy to power the city of Atlanta for three hours last year” would be an example. This action enforces a feel-good-by-doing-good sentiment.
A Place to Start
Some waste reduction is easy to achieve. For example, lighting, conveyors, compressor stations, chiller plants and electrical motors should only be running when they are needed for production. Certain non-essential systems can implebe placed on timers.
Less obvious sources of energy waste 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.
At the end of the day, however, the CEO commitment to cutting energy costs is critical. With corporate-level support, goals, planning, data gathering and implementation will combine to create a sustainable cultural shift that places energy conservation at the forefront without major capital investment.
Wes Andrud and Joe Froelich are consultants at Proudfoot Consulting, a firm that specializes in implementing change to achieve measurable and sustainable performance improvement. The company works with client company management, as well as with people of all levels of the organization, to design and install programs and increase bottom-line financial results. Headquartered in Atlanta, Proudfoot Consulting is part of Management Consulting Group PLC. For more information, visit www.proudfootconsulting.com.