Breakthrough energy productivity doesn't come from a magic bullet

Dec. 13, 2005
How to overcome “Our people have higher priorities…” syndrome.

Companies achieving breakthrough levels of energy productivity share common characteristics. First is a very high level of engagement in managing energy productivity at the plant level. Second, the energy “conversation” at the leadership and plant level is continuous, year-on-year. Gaining this level of employee engagement is rare, but without it, any energy productivity plan is doomed. Here’s why.

Contrary to commonly held views, breakthrough energy productivity rarely comes from a few obvious magic bullets; it comes from capturing hundreds and thousands of small wins throughout the company. In my experience, typically a quarter of the gains will come from very low-cost measures that pay back in less than a year, a quarter comes from managing energy procurement more effectively, and the third quarter comes from capital projects identified from within the plants themselves, usually with returns in excess of 20%. The remaining quarter will come from capital projects identified by external experts.

The first three quarters cannot happen without active engagement of plant employees, and the last quarter is more likely to happen if the energy culture welcomes outside expertise.

Clearly every company will have a different result, but the similarity of actual experiences makes this split a pretty good starting benchmark to establish initial goals.

And that’s the first step to effective energy team building: establishing goals. From the breakthrough goals accepted by the senior leadership, consistent energy productivity goals should be clearly established at the visional and plant levels. It is crucial for senior management to underline that energy productivity is important now and forever. Like attention to safety, the signal has to be very strong that it’s not going to go away.

It is also crucial that the plant goals are set consistent with energy productivity breakthroughs, and not simply “business-as-usual” efficiency gains. In the first year, they will probably focus less on absolute numbers and more on getting into action around energy. Typically, plant leaders would be challenged to establish visionary energy goals for their sites, start building the energy team, plan education and training, and establish a basic energy action plan.

Last but certainly not least, the plant energy team leader should be challenged to comment on progress at every daily production meeting, every weekly manufacturing leadership meeting, and anytime there is a success or failure related to energy.

What does a plant energy team look like? It is almost impossible to generalize, but the common characteristics are clear. The team will be multidisciplinary and include production engineers, maintenance, financial, procurement and floor workers and supervisors. The leader often will be someone who self-selects because of a personal passion about energy, and it is not unusual for individuals on the team to have deeply held personal values around using it rationally. Successful teams meet regularly, develop clear action plans that are regularly updated, and learn to act as opportunities arise. They measure results, they engage as many employees as needed, and they understand that it’s about maintaining continuous focus.

An overriding characteristic of a successful site energy team is an insatiable appetite to learn more about energy use and procurement and dig out the opportunities through creativity and focus. Maintaining this passion creates a challenge to their leadership to make available educational tools, and most importantly to reward and recognize team efforts. Obviously, it also challenges leadership to consistently underline the importance of achieving energy breakthroughs through words and actions. Every senior manager visiting plants should ask energy questions and expect to see an energy progress update. As with safety, if the questions are asked often, the answers get better.

Rewards and recognitions are crucial aspects. At Owens Corning, we recognized the Energy Plant of the Month at monthly global videoconferences. The Energy Plant of the Year was recognized annually, and representatives of the energy team, whatever their management level, would be invited to participate in global meetings. We even had a Thief of the Month award for the team that “stole” the best idea from their peers and implemented it rapidly.

Other companies have an annual Energy Summit that serves as both an educational and a recognition opportunity. I have seen plant leaders reward individual efforts with free home energy audits, a set of compact fluorescent light bulbs, an installed home programmable thermostat, etc. These both are useful and raise the visibility of good energy habits at home and at work.

Finally, a company should be ready to reward good energy results with real money. Breakthrough energy productivity gains are measured in the tens of millions of dollars in most companies, and success in capturing this should feature in formal and informal incentive programs. However, this can only be done reliably and effectively if the company has sound approaches to measuring and verifying energy results. This will be the focus of our next column.

Peter Garforth is principal of Garforth International LLC, Toledo, Ohio. He can be reached at [email protected].

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