Benchmarking is a feature of any successful energy program

Jan. 13, 2009
Energy Expert Peter Garforth emphasizes the power of benchmarking in times of crisis.

This isn’t the easiest time for corporate energy managers. Many companies are wondering if they will even be in business 12 months from now. The day-to-day commitments that energy productivity programs require seem to be way down on the priority list. Yet, the paradox is that in times of economic stress, maintaining a focus on productivity is crucial to ensuring the company will survive and thrive. A structured approach to energy performance benchmarking can provide short-term wins and a forum to maintain long-term effectiveness.

Regular benchmarking is a feature of every successful energy-management program. Typically, the energy teams from two or three companies spend a day together to compare successes, failures and challenges in achieving their energy goals. These sessions are usually held under conditions of confidentiality to ensure there is openness and candor.

Obviously, some of the benchmarking shares technical aspects and progress toward numerical goals. However, in my experience, the greater value comes from comparing leadership, managerial and motivational aspects. Regular readers of this column know that commitment of senior management along with allocation of dedicated human and financial resources, consistent rewards and recognition of energy performance are far more important factors of success. For this reason, effective benchmarking needn’t be solely with companies in the same industry, or even with similar manufacturing processes.

In the early days of its strategic energy management, Owens Corning, a building materials manufacturer, benchmarked against BP and a Canadian electricity utility. One of the most effective relationships I heard of was between a cement manufacturer and a pharmaceutical company. These differences bring new perspectives in terms of management and leadership approaches. They also minimize the risk of sharing wisdom as to what is, or is not, possible.

If your energy management isn’t exposed to regular critical external benchmarking, you might want to consider filling this gap. It’s not always comfortable, but it’s a great way to stay fresh and maintain momentum. This is even more important in times of crisis like we are in today.

I recently had the honor to facilitate a benchmarking session among the energy teams of three companies at different stages of their programs. Collectively, they spend many hundreds of millions of dollars annually on energy. One has had strategic energy management in place for a decade, one was in the first years of a systematic deployment, and the third was just embarking on a company-wide energy plan and was in the process of establishing targets. Each, in their different ways, had done a professional job and many would see little to add to their efforts. What was interesting to watch was how the mutual learning emerged through the day, opening up clear extended opportunities for all.

The need to manage greenhouse gas risks strategically was reinforced. One company had done a thorough analysis of climate risk for its plants; others had externally registered emissions in effective ways, and one was already managing the effects of climate regulation through its European facilities. These perspectives, combined with healthy discussions about setting and achieving climate targets, meant everyone came away with new actions they could add to their programs.

The dialogue continued in a similar vein. The company that was just embarking on an energy program reminded the others of the basics that so often are forgotten, in turn refreshing their view of the opportunity. The companies with longer experience cautioned against excessive perfectionism in the early stages, probably accelerating significant cost benefits for at least one of the players in the room.

All renewed their understanding that defining and measuring energy productivity isn’t an exact science. Trying to be perfect often gets in the way of being effective. Each had found useful but different ways to communicate results. Each understood that employee recognition and rewards for effective energy management are critical, but all recognized that they needed to reinvigorate this aspect.

The teams with established programs were reminded that even after years of improvement, enormous cost savings with attractive returns still are available. The team starting out gained courage to set aggressive targets from day one. Each team gained the strength to ensure full understanding of the value of investments in a time of cash shortage.

In short, this benchmarking enabled valuable functional exchanges of best practices, but equally important, it underlined that effective energy management is even more critical in times of economic and market stress.

Peter Garforth is principal of Garforth International LLC, Toledo, Ohio. E-mail him at [email protected].

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