When challenged to develop a corporate or site energy plan, it seems obvious that the goal should be for it to lead to successful outcomes. But from my experience over many years, it’s fair to say that most energy plans fail to live up expectations. This is rarely from a lack of well-meaning effort or technical expertise. So why is underperformance is the more typical outcome? What does energy planning for success look like?
A good place to start is to be clear on the scope of the plan. At a minimum, there should be a clear understanding as to whether the end uses are included. It’s common for executive leadership to expect that an energy plan will cover all energy use, including manufacturing, without ensuring that manufacturing leadership will be on board with possible changes in the process. If this alignment is not in place at a high-enough senior level on Day 1, the plan will already be on track to fail.
Also important is to align expectations for the range of outcomes that the plan addresses. The most common pertain to reductions in energy and maybe water use as well as reductions in the organization’s carbon footprint and in energy and carbon cost and cost risk. Increasingly, improving energy reliability and quality are on the radar screen. In many cases, there is also an underlying goal to improve the broader energy and sustainability understanding and the workforce culture.
Given the breadth of potential outcomes that an energy plan could address, dialogue with most company departments will be necessary before any serious planning can start. An important part of the scope conversation will be to discuss what won’t be included. A plan that will cover large-scale deployment of renewables or deep renovation of building envelopes, for example, likely will require considerable discussion about exclusions.
When planning for success, it’s important to agree at the start what success will look like. During the discussion with leadership about the outcomes the plan will address, it makes sense to seek consensus on goals for the plan. If goals are established based on outcomes that leadership would unquestionably see as competitive advantages, then the planning team has some clear targets at which to aim.
For each of the agreed outcomes there should be a challenge goal, and success will be defined as meeting all of them to a reasonable degree. In practice, this means creating a plan that meets technical efficiency, economic, environmental and reliability goals in a balanced way. There’s always a certain amount of discomfort in the concept of setting challenge goals up front before detailed planning starts. But the advantages of the energy team and corporate leadership having an agreed-upon view of what energy-related success looks like far outweigh the concerns.
Agreement about scope, expected outcomes, and goals is necessary for developing any significant energy plan that has any chance of being approved, resourced, and implemented. Reaching this point and establishing planning boundaries can only be achieved by involving senior managers from the beginning. Their continued involvement also will help ensure that they are vested in the plan. In effect, the energy team will have some key sponsors and advisers as the plan develops.
Going through these steps is rarely simple. The energy plan may not be high on managers’ priority list. But if a team starts developing an energy plan without taking these critical first steps, the plan will almost certainly be doomed to produce only modest outcomes, and it will be unlikely to deliver even those.
Building early consensus should allow the rest of the energy planning to proceed smoothly. The engaged managers can help clear barriers and encourage cooperation. They should also be updated at key milestones during the planning process. Challenge goals may be adjusted at the milestone meetings.
Once the plan is completed, the same leadership that set the challenges at the start will be the group that will approve the plan and assign resources to make it happen.
As energy team leaders, are we really planning for successful energy plan implementation?