Closed Loop Advisors

Data Centers in the Arctic? Not for everyone. But that doesn’t mean you don’t have options.

Larry Cheng — Fri, 26 Oct 2012 01:00:04 +0000

Much ado is being made about the massive data centers being run by the Googles, Facebooks, and Amazons of the world. As these data centers began springing up they were touted as the medicine to cure the economic woes in America’s small towns. Jobs were being created and tax revenues generated. But recently, The New York Times has released a series of articles highlighting the extensive energy use and lack of energy efficiency existing within these data centers. The direct cause being the need to provide on-demand, anytime internet access that you or I require in this ever more connected world.

Now the debate is raging. Whether this wasteful and inefficient depiction is accurate (IT experts have been quick to refute), the argument should not keep you and your organization from taking a look at the available technologies that suit your needs. If you run or work at a small- or mid-sized business, chances are high that you don’t own massive data centers in the Pacific Northwest or even the Arctic. You won’t demand instant access to your data servers 24 hours a day, 7 days a week and 52 weeks a year. Leave Facebook to worry about that for their consumers. Take a look at what your needs are and work from there.

In this economy and into the future, cost reduction is and will be a chief priority. That is why more and more organizations are looking to reduce their own operating costs while still providing a high quality service and meeting stakeholder expectations.

To address this point is where energy conservation measures (ECMs) come in. Implementing these will reduce overhead costs and improve those financial results at the end of the day. However, the fact of the matter is that data centers and IT infrastructure draw a lot of power in the scope of an organization’s total electricity usage, so simply changing to LED light bulbs just won’t cut it when seeking to benefit from ECMs.

So take a look below to see where you can make some decisions to improve your own data center.

Virtualization – It might be time to rethink the fundamentals of your IT system. Virtualization is a way to simplify your IT infrastructure and create a more flexible and dynamic system. Virtualizing physical servers takes advantage of improved processing technology and increases server utilization rate. Servers running at a higher utilization rate are more energy efficient. Virtualization allows for server consolidation (fewer servers able to provide the same number of resources) and reduces IT expenditures and maintenance costs.

Hot-aisle containment – A great deal of inefficiency lies in the manner by which temperature management occurs for the data center. In many cases, servers are housed in a room on racks without any enclosures to separate hot and cold air. Implementing a data center design which takes into account the need to properly separate hot and cold air allows for more efficient cooling of the data center and less wasted energy.

Raised data center room temperature – Your server room shouldn’t feel like the Arctic. Data centers do not need excessive cooling, and in fact, modern technology allows data servers to operate above room temperature (72 F). Be sure to check the limits of your data center and find that optimal temperature.

Free Cooling – Sometimes Mother Nature provides all the cooling (through lower temperatures and wind) you need and although this won’t work everywhere, it might be worth checking out. Nothing better than having zero cost associated with cooling your data center.

Now how do you know whether these measures have had any impact at all? You can look at the absolute energy consumption and see how you stand in relation to your legacy system. Unless you expand your capacity to meet growing demand, there should be a decrease in consumption. Also, you can use the Power Usage Effectiveness (PUE) measure developed by The Green Grid, which tells you how effectively a computer data center uses its power. A low PUE is indicative of a energy efficient data center. According to the Uptime Institute, the average PUE in 2011 was 1.8 and with the technology available today, that is obtainable no matter what the size of your organization.

These are not the only steps you can take to make your data center more energy efficient, nor will you need to implement all of them to obtain savings. Even implementing just the virtualization could potentially save 50% in hardware costs and 80% of your energy expenses.

If your company is interested in understanding or optimizing your data center, then contact us to find out how.

Redefining the Three R’s for Buildings: Reuse, Repurpose, Refurbish

Eileen Quigley — Thu, 20 Sep 2012 19:18:00 +0000

Credit: (Dexter Moren Associates)

Out with the new, in with the old. Rearranging this well-known adage reminds us that newer is not always better.

The common perception that buying or building new and in a “green” way will reduce ecological footprint is often backwards. Although it may seem counterintuitive, your company can avoid making substantial new purchases and still reduce environmental impact while strengthening its bottom line.

Many companies think that to be sustainable they need to make a transformation in a major way by investing in green buildings. When it comes to business’ operations, buildings are where the greatest environmental (and subsequently, financial) impact is felt. According to the Environmental Protection Agency (EPA), in 2006, buildings accounted for 72% of the electricity consumption in the United States. Energy, water and resource use in buildings might be excessive just to keep your business in motion.

Buildings are also often a very visible face of a company. Employees spend time there daily; clients or customers see them during meetings, presentations or when making purchases. First impressions are lasting so it is a smart move to ensure that a building reflects your values if environmental well-being is something you’re trying to adopt.

However, rather than building or leasing in a LEED New Construction building, consider a retrofitted space. As an owner, it’s tempting to demolish an old inefficient building to create a shiny state-of-the-art “green” one. But as an owner or tenant, one of the greenest things you can do is retrofit to reverse the inefficiencies. Redefine the three R’s: reuse, repurpose, refurbish.

One benefit is cost savings. Energy efficient buildings cost just slightly more because of the higher expense associated with newer more sophisticated technologies, including materials and equipment. Retrofitted spaces require much less new material and are therefore less expensive.

A full energy analysis of your building’s consumption may reveal that retrofitting all, or just parts, is a sufficient solution. Supposed inefficiencies can be remedied by making small changes to existing items rather than flat out replacement. Depending on your specific situation, simply weatherizing windows instead of replacing them or applying energy saving settings to computers instead of buying new may be the preferred solutions.

Conservation of resources and environmental quality is another major advantage. According to a study by The National Trust for Historic Preservation, it can take anywhere from 10 up to 80 years for an energy efficient building to recover the climate change impacts resulting from its construction. Concrete and steel, the two major staples of the building industry, have incredibly high carbon footprints associated with them. Not to mention, the fossil fuel consumption associated with transporting materials is very high. If those materials already exist in a space and are in good condition, its best to keep them.

For companies that still want recognition from LEED, not to worry. LEED has an existing buildings (EBOM) certification. In fact, the number of registered buildings under that category has increased in the past years, proving that retrofitting is being recognized as a smart way to go.

Yes, it’s true that new technologies are being developed with superior efficiency and promise of operational cost savings. But the tradeoff of having to mine or harvest virgin resources is not always worth it.

So think before your company jumps to create a cutting-edge new space with all the latest green technologies. From furniture to the core and shell of a building, the first approach should always be to use as much existing material as possible.

For more information on how you can retrofit an existing space to meet your operational, financial and sustainability needs, contact us.

Everything I Ever Needed to Know About Sustainability, I Learned From My Great-Grandparents

JD Capuano — Wed, 29 Aug 2012 21:12:27 +0000

Well, my great-grandparents didn’t teach me everything I ever needed to know about sustainability, but they did teach some important guiding principles that apply beyond personal life to business as well.

These principles could help usher any organization through their sustainability decision-making process. My great-grandparents learned to live by these principles because of the circumstances of their formative years.

My Dad’s grandparents, Dominick and Louise, were born in Italy and emigrated to America. They knew hard times in both countries. They lived through WWI (my great-grandfather fought) and the Great Depression, and achieved the post-WWII American Dream of a middle-class life.

To achieve their dream they saved when they could because they didn’t have much. Their frugality led them to sacrifice and allowed them to scrape by when times were tight. They grew their own food and took exquisite care of everything they owned. They repaired, reused, and repurposed things most of us would throw away today.

As a kid I was fortunate enough to regularly visit them when they’d tell lots of old stories, most of which were funny and some held hidden lessons. Little did I know then that those visits would teach me many of the guiding principles that help me approach and solve sustainability problems today.

Their lives could teach all of us a few things about sustainability management, but not because they intended to live in a certain way, because they had to. Today because of a climate growing more erratic (inconsistent seasons, droughts, more powerful storms), resource constraints, and material costs on the rise, we are increasingly realizing that we must live and do business sustainably because we have to.

Organizations of all sizes are starting to see opportunities to operate more efficiently, like by raising HVAC set-points when it’s hot and lowering them when it’s cool outside, or use less raw material when manufacturing. Organizations can also waste less by recycling more, composting food scraps, and improving manufacturing to generate less left-over material. In addition to recycling, companies can adjust their purchasing to scale back where possible. Most of these measures trim budgets.

One of the things my great-grandfather developed a knack for was squeezing the most use out of an item as possible before discarding it. I remember stories of my him keeping chunks of sponge when they would break apart and sew them together to create a “new” one. While I’m not advocating for every office kitchen to start mending sponges, the example highlights a way of thinking that we may be able to do more with the resources we have. Get creative.

My great-grandparents also shared. A close community of family, friends and neighbors both enriched their lives and functioned as a support system when times were bad. They also helped strangers. One story that stands out is that a shabby looking man showed up to their house on Christmas eve on year. They invited him in, fed him and treated him like a long-lost friend.

Today, companies and non-profits can do better in terms of image, reputation, competitiveness, and finances if they build community. Building community will mean something different to different kinds of organizations.

Community commonalities for most organizations include maintaining healthy relationships with business partners in your value chain, giving your customers reasons beyond your product or service to stay connected, and volunteering time, product/service, and/or funds in the neighborhoods where you operate.

I’m not suggesting people to sew together sponge bits or invite a needy stranger to the next company holiday party (though that would be altruistic), rather I’m suggesting that we all approach work and personal life knowing that this planet’s resources are both limited and precious, and that we need to treat them that way.

Like my great-grandparents’ earlier years, we’re reaching a point in time where we must focus on sustainability simply because we have to.

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Set a goal to unleash your company’s Olympic spirit

Ryan Meinke — Wed, 15 Aug 2012 18:59:03 +0000

I’m going through Olympics withdrawal. Reflecting back on the games, that spirit of fierce yet friendly competition inspired me to think about how companies approach sustainability.

To perform well and reap the benefits that come with sustainability (trust building, image enhancement, cost-cutting, risk reduction, stakeholder engagement, etc.) companies need to continually work towards targets just like athletes work towards personal best records.

How are companies stacking up in terms of their performance? A review of public sustainability reporting by the Fortune 500 turns up three types of companies: Laggards, Middle of the Pack, and Leaders. Mid-sized companies don’t always publicize sustainability targets and performance like the Fortune 500, but experience suggests these categories apply to them as well.

Laggards: those who produce no sustainability or corporate responsibility report, and have little to no relevant information on their websites or in their annual reports
Middle of the Pack: those companies who report on achievements to date (e.g., 22% of electricity at our headquarters comes from renewable sources), but not in the context of progress toward a goal
Leaders: those who set bold, forward looking targets and annually report on their status in a transparent way, i.e., both in terms of percentage achieved and in hard numbers.

The majority of companies are in the middle of the pack. Most of the Fortune 500 have made progress over the past 5-10 years in making their operations more sustainable, but they have chosen to take the easier route; not committing to a specific outcome within a specific timeframe. Mid-size companies are even less likely than the Fortune 500 to make public commitments, but they also would benefit from setting them.

Clearly defined sustainability targets matter for many reasons. Here are some of the most prominent:

Having targets dictates what you measure and therefore manage
Leadership must assign responsibility for achieving targets, creating accountability at all levels of an organization
When communicated internally, the challenge of achieving targets engages and inspires employees (multiple studies have shown the positive impact sustainability has on productivity, recruiting and retention, as well as innovation)
When communicated externally, targets demonstrate that sustainability is a priority for your company. It is then executing on these targets that yields benefits like building trust with customers

Setting a multi-year public commitment is tough; it carries a risk of failure, and it can lock a company into taking certain actions that may become more difficult if the economic or competitive environment changes. For these same reasons, consumers and society value bold targets.

Is your company ready to set targets? Do you need help achieving targets you’ve already set?

Contact us to talk about setting ambitious but attainable targets that will put your company on track for a personal sustainability best – or a gold medal!

Is Your Company A Dinosaur?

JD Capuano — Wed, 25 Jul 2012 20:58:31 +0000

If your company lacks a strategic focus on environmental and social sustainability, chances are it’s a dinosaur.

When a company weaves sustainability into both its operations and business model, it improves its odds of success. This holds true when considering efficient operations, employee engagement, community building with customers, competitiveness, and long-term financial health. Let’s look at each of these on their own.

Efficient Operations:

If you waste energy, time or materials in any part of your processes (manufacturing, building operations, etc.) then you’re wasting money. Cost-cutting is the typical gateway for companies to begin a sustainability program. Not only is it a great place to start, it’s an area that can continually be improved.

Employee Engagement:

While your company’s sustainability strategy may be driven from the top down, it only comes to life from the bottom up. By being involved in something bigger than chasing the next project, quarterly profit or market share point, employees feel greater satisfaction. Environmental and social responsibility are powerful drivers that allow employees to feel connected to something bigger – connected to a cause or a mission.

If you can empower employees to identify with being part of a cause at work, you’re building trust and doing wonders for productivity.

Community Building with Customers:

There is an old slogan from IBM sales training that says, “people buy from people they trust.” While price plays a large role in many purchasing decisions, so does trust. This holds true for B2B or B2C sales. And especially when it comes to B2C sales, customers prefer to buy a product or service to which they feel connected.

While this connection comes in the form of branding and stories related to the product or service, it’s enhanced when customers know they’re buying something good for their health, good for their kids, or that’s better for the planet.

Competitiveness:

For three years now the MIT Sloan Management Review and Boston Consulting Group have teamed up to publish the Sustainability & Innovation Global Executive Study. An article summarizing the survey of global executives highlighted the following responses:

One-third can directly link sustainability initiatives to profit
70% consider sustainability a permanent agenda item for high-level business strategy
Two-thirds saw sustainability as necessary for business competitiveness

Sustainability is more than cost-cutting. It unlocks opportunities for innovation in products, services and processes, opening access to new markets.

Long-Term Financial Health:

Last month Deutsche Bank published a study titled, “Sustainable Investing: Establishing Long Term Value.” This study concluded companies that scored well on Corporate Social Responsibility (CSR) and Environment, Social and Governance (ESG) factors performed well in one or more of the following ways:

Had lower costs of capital in terms of debt and equity
Exhibited financial outperformance
Exhibited market based or accounting based outperformance

Other evidence exists, but we found this particular study fascinating, especially the authors’ proclamation that the lower cost of capital finding, “firmly puts the issue of Sustainability into the office of the Chief Financial Officer.”

Clearly, companies are continuously seeking ways to redefine and re-imagine business by making smart decisions not only about sustainability, but about overall strategy. Taken together, the whole is greater than the sum of the parts listed above. Companies can still meet financial expectations while making sure they function responsibly. More and more of us would rather support companies that have a conscience.

Is your company a dinosaur? Contact us to find out how to evolve before you go extinct.

Is your business ready for more expensive…everything?

Ryan Meinke — Thu, 12 Jul 2012 16:14:42 +0000

One of the biggest coming challenges in business will be how companies respond to shifting supplies of resources. Non-renewable resources will dwindle; some renewable resources will be in high demand and short supply. Costs are sure to rise. Smart companies are preparing now to minimize risk.

Currently in the United States, many inputs are still relatively cheap for businesses. Such inputs include energy (coal, gas, oil), transportation (fueled mainly by oil), water, and many commodities. Carbon emissions and waste management are also free or relatively cheap.

However, as the world population continues to grow (past 9 billion people by 2050 according to the United Nations), the cost of many inputs and disposal of waste outputs will spiral upward to reflect growing scarcity. According to Jeremy Grantham, head of investment management firm GMO, “the trend of the last 100 years, in which the prices of almost all major commodities have steadily declined, is permanently over.”

There is a finite supply of fossil fuels, water, commodities, and space to dispose of waste, and an ever-growing population that is also consuming more per capita will drive prices of all of these inexorably upwards. Long-term thinking will be required to adapt successfully.

How soon will this really kick in? It’s already happening. Although big federal policy shifts like ecological tax reform (e.g., a carbon tax), which would cause an immediate change in prices, are not likely in the U.S. in the near term, they have already been implemented to varying degrees in Europe and individual U.S. states, like California - and they are becoming more widespread. In the shorter term, market driven price increases are occuring regardless of policy choices.

Companies and organizations that adapt before price spikes hit them will be at an advantage – and more likely to thrive as competitors fall by the wayside.

There are three steps to becoming a low-impact, resource efficient company:

1. Know your footprint

You can’t manage what you don’t measure. Understand the full impact of your business on the environment: from raw material sourcing by suppliers, to transportation and logistics, the operations within your own walls, end use and disposal of products by your customers. Understand the full lifecycle of your products or services: extraction or growing and harvesting of inputs,energy and water use, emissions and waste disposal. Establish metrics and measurement processes. Simply asking the questions required to obtain these baseline measurements will turn up opportunities to improve efficiency. The answers may surprise you; Kraft foods discovered that the carbon emissions from the agricultural inputs in their supply chain were over ten times larger than those from their own operations.

2. Squeeze out inefficiencies

Once you know where your biggest impacts lie, you can focus on what matters. From supply chain management to building energy and water efficiency, you should set ambitious but realistic targets to minimize your footprint and become a lower-impact company. Sometimes it helps to have an outside perspective to help determine the best approach to achieve your targets, and to align employee and supplier incentives to ensure everyone is working together.

3. Rethink your business model

The final step is to move beyond efficiency. This may result in a fundamental transformation of your business, the way companies like Xerox and Interface have moved away from a sales model toward a leasing and service model. Because they own, maintain, and recycle the copiers and flooring they lease to other companies, they have an incentive to produce high quality, durable products that last a long time, require minimal maintenance, and are easily recyclable.

Once you’ve addressed the low-hanging fruit in step 2, all three steps should become a continuous cycle to increase your value while decreasing your footprint.

Creative thinking will be required to adapt to the coming challenges of resource scarcity. Closed Loop Advisors can help you get ahead of this shift. Contact us for a no-commitment diagnostic of your business.

How Effective Are Your Energy Efficiency Projects?

JD Capuano — Thu, 21 Jun 2012 17:46:26 +0000

Who isn’t looking to save extra money these days? One way organizations across sectors are cutting costs is by becoming more energy efficient.

Energy efficiency projects ranging from lighting upgrades to installing new high-efficiency chillers can produce significant savings, often paying for themselves in a few years or less, especially in an area with high energy costs, like New York City.

Regardless of the types of efficiency projects you decide to implement, problems can arise when it’s time to measure their impact.

If you start undertaking projects before thoroughly measuring your baseline of energy consumption, how can you know how much you’ve really saved? Determining your success also depends on the level of detail you’re set up to measure.

We’ve seen organizations undertake what seemed like great energy efficiency measures. But they either didn’t have a baseline or their energy data was sourced from utility bills for an entire building when their project only affected a part of it.

The latter case is of particular interest if you implement a project that affects just one floor of many, or part of one floor. This can become an issue if you need to demonstrate effectiveness to senior leadership through a pilot project. Will your data have the necessary granularity to measure the project impact in such a scenario?

Another case is when organizations undertake more than one energy efficiency project either simultaneously or in rapid succession. Trying to accurately attribute reductions by comparing energy bills can be trickier than you think in such circumstances.

Beyond the issue of data granularity, a complicating factor is the difference in annual temperatures. What was the weather like in the months before and after your project start date compared with those same months during the previous few years?

Normalizing data by accounting for heating degree days (HDD) and cooling degree days (CDD) is essential, otherwise you’re probably skewing the results.

The best way to track your performance is to make sure your measurement capabilities are up to the task before you start energy efficiency projects. Our recommendations are to go with robust sustainability/energy monitoring software, or a capable building management system.

We’ll cover details related to topics covered above, including software selection, in future posts.

If you’d like to learn more about how your company can implement the most appropriate energy efficiency projects or effectively measure its performance, contact us for a free consultation.

Community Creates Loyalty, Sustainability Builds Community

JD Capuano — Thu, 07 Jun 2012 15:28:23 +0000

Communities are shaping the world today more than any other force.

They have been driving change all over the globe from revolutions throughout the Middle East to the Tea Party and Occupy Wall Street movements in the U.S. to the rise of the sharing economy.

Sustainable practices are a vital way your company can connect with and grow its community. The planet is in trouble, which means we humans are too. What’s your company doing about it? Are you sticking with business as usual? Doing just enough to appear respectable? Or are you seizing the opportunity to transform how you do business?

Your community is your employees, customers, suppliers, business leads – anyone connected to what you do. This community is paying increasing attention not only to what you do, but how you do it.

More often than not, sustainability is on their radar. And sustainability means different things to different people. It’s not only about how you treat the environment and consume natural resources, but how you treat people and what you offer in exchange for the profits you seek.

Community isn’t just about external stakeholders – it starts with your employees. For years, studies and anecdotal evidence have proven employees who are empowered to help their company to be more sustainable are more engaged, productive, and easier to retain.

Creating a culture that values every employee’s input on how to be a better, more responsible company also helps with recruiting the best talent. People want a reason to get out of bed in the morning that connects to something bigger than themselves and a paycheck. Don’t you?

A company’s mission is important, but its actions and the associated effects on its community are more important. Whole Foods has figured this out. It’s become part of their DNA and they’ve grown great results. Their employee turnover is 15%. Compare that to the industry average of 100%!

When reaching out to B2B or B2C customers, smart companies offer something good for the customer that’s better for everyone. UPS’ campaign The New Logistics offers more responsible ways of working with your supply chain, shipping and reducing your carbon impact.

UPS leverages their services to to good, like coordinating relief aid shipments and distribution following the 2010 earthquake in Haiti. We also like how UPS highlights carbon neutral concert touring and challenges their customers to imagine how such services could benefit them.

Building trusting relationships with your community is invaluable. Consumers are becoming savvier than ever. Increasing percentages look for green products and services, and are skeptical of greenwashing. More than ever are sharing goods instead of buying them. Responsibility, transparency, and good will are indispensible if you want to reach and retain consumers.

Sustainability is a key ingredient in this trust recipe. There are many ways to approach sustainability in your own business. A tailored strategy that includes your organization’s goals, employees’ opinions and customer’s preferences makes the most sense.

It’s important to ask yourself, “how are we operating now and how do we want to operate in a few years?” Executing the right sustainability strategy can get you there. It can also help you transform your operations to gain efficiencies and cut costs, evolve the products or services you offer, and provide competitive advantage. Together, these steps allow your company to engage with its community and build trust.

How robust is your sustainability strategy? What are you doing to strengthen your relationship with your community? If you want to talk about it, drop us a line. Like our posts? Sign up for monthly insights and resources in the top-right of this page!

Property Management Firms: Gatekeepers of Sustainable Building Operations

JD Capuano — Wed, 23 May 2012 19:16:37 +0000

Why are property management firms gatekeepers of sustainable building operations? Maximizing operational efficiency in office buildings to cut costs is only possible when you have the measurements and metrics to make targeted improvements.

Property management firms hold tremendous power, or at least potential power, when it comes to the sustainable operations of their tenants. Office operations represent a large share of environmental impact for the sector. And it’s frequently the property managers who decide how extensively utility consumption and waste generation are measured.

We’re astonished at how many property managers are missing the opportunity to capture and leverage the information coursing through their buildings.

The technology exists to sub-meter HVAC heating, HVAC cooling, lighting, plug load, renewable energy generation, and steam, each by floor or source. It’s also possible to measure water, wastewater, stormwater capture, recycling, compost, and waste down to detailed levels.

A steady flow of this valuable data is just waiting to be tapped. With this data, tenants would be empowered to target their efforts to operate more efficiently. Without this data, achieving operational efficiency is more like playing darts blindfolded.

Owning or managing a “green” building is a good start, but not nearly enough. One of our clients occupies one floor in a 10 floor office building. This building has a LEED Silver rating. The client completed a LEED Commercial Interiors buildout that boasts a LEED Platinum rating.

Despite these building accolades, our client cannot accurately measure their water or waste. Managing these resources efficiently is important to this client. Typically, a building like this has one water meter, the cost is included in rent, and tenants remain unaware of their consumption.

If, like our client, your utility costs are concealed in your rent, you’re paying hidden fees. You have no way of telling if you’re paying a fair share. If your company is sipping utilities while your neighbor is guzzling, why should you subsidize them?

Let’s look at energy. Your floor may be sub-metered, but do you know what’s sucking the most juice from the grid? Without sub-metering at the levels outlined above, how do you know where to make changes and cut costs?

Many property management firms think that having a LEED certified building will be enough to make them competitive in the market. Maybe that’s true today, but not for long. Building codes and tenant expectations are changing.

If we really want “smart buildings” we need to meter everything for everyone. A wave of sub-metering is on the rise. Pike Research just released a report claiming that the worldwide market for electrical sub-metering technology and services totals $771 million and will grow to $1.58 billion by 2020.

Smart property managers will seize on this opportunity and equip new buildings. Really smart property managers will do what they can to expand equipment in existing buildings.

By extensively installing sub-meters and water flow meters, property management firms can open the gates for their tenants to operate sustainably. In doing so, both can achieve competitive advantage.

Let us know if you’re interested in finding out more on this topic.

Sustainability Strategy: Data Driven Gut Decisions

JD Capuano — Thu, 10 May 2012 03:57:54 +0000

The old adage that you can’t manage what you don’t measure is taking on an entirely new life these days.

In this age of big data companies are tracking and measuring more things than ever, for better or worse.

How does this change your capacity to manage?

From the lens of sustainability management, big data coupled with sound analytics provides organizations with ample benefits to guide decision making.

The ability to crunch vast amounts of data on energy, water, and material consumption along with waste generation is only part of the picture. Smart companies are using analytics to uncover competitive advantage in everything from cost management to mergers and acquisitions, to promotion, to research and development.

Some companies are starting to apply these tools and way of thinking to sustainability. IBM and their Smarter Planet initiative is an outlier example of using analytics to transform systems.

But companies that aren’t avant garde in using analytics and sustainability can still benefit from tracking information. These benefits are broad and varied.

One example is real time energy monitoring within buildings that can be broken out by system type (e.g. HVAC, lighting, plugload, etc.) and by floor to pinpoint efficiency opportunities. Another is compiling supply chain data to identify efficiency gains, waste reduction, material substitutions, and cost avoidance.

Focusing too narrowly on basic operational efficiencies can get managers and companies lost chasing incremental improvements while missing big picture opportunities. The key to successful sustainability performance is how you interpret and particularly what you relate to these data.

Sustainability gains that go beyond cost cutting to drive revenue are being achieved by rethinking product and service design. From this perspective, data and analytics provide evidence to influence decision-making on hunches about market trends and opportunities.

Qualcomm recently capitalized on copious research in biomimicry to develop a nature-inspired digital display that’s both ultra low power and can be clearly viewed in direct sunlight.

Regardless of how much information you’re capable of amassing, you must weigh both the known and unknown factors in your data, your market, society, and nature to lead effectively.

We’re proponents of applying big data to sustainability management, but in a tempered way. At the start of this post we noted how big data is here for better or worse. We point that out because we see not only its potential, but also the drawbacks to purely quantitative decision-making.

Business management expert W. Edwards Deming applied his intellect and expertise to create the seven deadly diseases of management. His disease of, “running a company on visible figures alone” is especially relevant here. Although some of the things Deming deemed “unknown or unknowable” a few decades ago may in fact be measurable today, his advice holds true.

Embrace and apply big data to sustainability, but keep in mind that your data may not tell you the full story.

Identify evidence and analytics to vett your hunches. Read the market patterns and societal trends. Look to nature’s systems to inspire sustainable product and process design. Weave these factors together with the big picture to improve your company’s sustainability performance.

Contact us if you’re interested in guidance on assessing your company’s sustainability data and setting a sustainability strategy.