Making Change Efficient and Sustainable

In a rapidly changing environment, where automation, digitization and globalization are disrupting the very nature of business, constant change and adaption are prerequisites for growth, and even survival.

In our first blog in this series, “How to Develop an Efficient, Change-Ready Organization,” we described the emergence of change management models in business and their applicability for a company’s energy and sustainability program. But when disruption is ‘business-as-usual’ and last month’s performance goals might not hold up, more agile strategies become necessary.

Because of the pace at which change is occurring, companies are challenged to take a more active approach to adapt. For the greatest responsiveness, companies are turning to Change Management 4.0[1].

Many business practices today, such as the classical step-by-step change management process, come from a time when the pace of business was nowhere near as rapid as it is today. While the industrial production line mentality may still be applicable for some specific market segments, most business processes today are not linear, but multi-directional and moving in leaps and bounds. Here are a few examples of the speed and complexity of today’s business environment.

• Fast fashion: ZARA, a global fashion retailer, creates a new design and has the finished product shipped to all 2,213 stores in 93 countries in just two weeks, forcing new dimensions of speed for the apparel segment.[2]
• Smart transportation: UBER is quickly making the more than 100-year-old taxi business obsolete thanks to a smartphone app that organizes peer-to-peer ridesharing quickly and cost effectively.
• Global efficiency: When it comes to efficiency and sustainability, the idea that a corporate energy manager could compare thousands of global facilities against a range of targeted KPI’s in near real time was unthinkable. Digital connectivity and advanced analytics are helping identify and realize efficiency improvements at a speed and breadth once unimaginable. 

With no end in sight to the current acceleration of change, business leaders and their strategic consultants are discussing how they can re-invent their organizations. That often means a complete rebuild of core business processes. Today’s leaders are expected to decide and execute major change in six weeks, whereas they would have had six months in the not too distant past. In this environment, a key component of these new emerging strategies is adaptiveness.

For many organizations, corporate energy and sustainability programs are part of the strategy to future-proof their business. When done at scale, efficiency and sustainability activities have a direct impact on a company’s bottom line.

As Fabrice Mathieu, Global Sustainability Manager for Royal Canin/MARS knows all too well, “Engaging in sustainability is a ticket to play. If you don’t have a sustainable business today, you are not credible in the market.”

But these sustainability programs are subject to the same influencing factors as other corporate initiatives. Competing priorities, limited resources, fast-changing corporate structures and a myriad of decision makers and influencers are challenges for many energy and sustainability managers. For these reasons, many global companies with complex portfolios fail to execute on their sustainability ambitions. Fortunately, there are tactics to move successfully from intention to action, even in times of great change.

How to adapt your energy and sustainability program to the fast-paced reality of business today:

1. Move faster

A simple answer to how fast should we see results is often “faster.” A good strategy for an enterprise efficiency program is to focus first on the fastest possible path to results. This effort will generate momentum, build confidence and demonstrate possibilities across the company. Once the program has established its impact, it will likely withstand any new corporate prioritization exercises. Automation and industrialization can also satisfy the need for speed. Think about a pre-fabricated efficiency solution tailored for the design of today’s modular industrial or retail sites. These “shovel-ready” projects can jump start efforts.

2. Pull not push

A top-down approach no longer benefits many organizations. Consider Google’s success story. There is no way its market leadership would have been possible so quickly without the wildly successful management of its many creative teams across the world. Not surprisingly, the company is the lasting champion on Fortune's annual "Best Companies to Work For" list. Think about how you can apply this success model for your company’s energy managers; empowerment of site energy teams is key to moving the needle on energy and sustainability initiatives. This also requires a glo-cal approach, meaning the link from global targets to self-motivated local action needs to be short and fueled by direct incentives.

3. Streaming efficiency and sustainability

The “everything-as-a-service” model is a logical response of businesses to accelerate performance. In a time when technology is accelerating exponentially, it is simply not possible to anticipate when the next big breakthrough will happen. Just as how streaming services on Netflix allows you access to the latest and greatest shows and movies without investing in any one channel, companies can use a similar approach with adopting new efficiency technology.

Some energy managers might remember the launch of LED-technology in industrial lighting and the painful decision they had to make about buying too early, too costly or a technology that might be replaced by a more efficient successor after a few months. Use-not-buy business models will not only provide more flexibility to take advantage of technological trends, but also remove financial constraints, namely the availability of capital to invest in sustainability initiatives.

4. Constant tracking and adaption

Proof of performance depends on an accurate system of KPI’s and the tools to track them. For a sustainability program to be more adaptive, this means that the control loop of Plan-Do-Check-Act must take place much faster, which means annual reviews are simply not adequate. Some successful programs deploy monthly reviews with all involved managers as a minimum frequency. Having a shared platform that provides constant visibility of key trends and real-time knowledge sharing on best practices is key to enable organizations to continuously refine and optimize change management efforts.

Don’t wait for things to settle down to act

There’s no question on the need to re-invent today’s businesses, as few, if any, are immune to the forces of creative destruction. Consider forecasts of corporate longevity on the S&P 500[3] with average tenure expected to halve over the next decade from 24 years in 2016 to 12 years in 2027; with even shorter life spans in specific industries, such as retail. Consequently, the idea of waiting for calmer times to launch an energy and sustainability program is a fallacy. Organizations that act now to succeed in energy and sustainability during today’s turbulent times will likely gain the competitive edge. The good news is that no program needs to be perfect from the beginning, but it does need to start and be open to smart adaptations along the way.

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Stay tuned for the next part of this blog series, which will feature examples of successful enterprise efficiency programs that had to adapt along the way to achieve performance.