Innovation Only the First Step to Building a Green Business

Innovation Only the First Step to Building a Green Business

"Everything's up for reinvention," according to keynote speaker Kevin Surace, CEO of Serious Materials.  Surace spoke to more than 250 building operations executives at the Sustainable Operations Summit in San Antonio, Texas. In a theme repeated by many of the speakers at the conference, he urged attendees to think outside the box and pursue disruptive innovation.

While innovation is key, the other theme of the conference, voiced by closing keynote speaker President Bill Clinton and others, is that business needs to prove that environmental sustainability projects make good economic sense.  This intersection of innovation and investment threaded through all aspects of the two-day conference.

Follow the Money

When Kevin Surace started Serious Materials, he was sometimes baffled by the efforts of cleantech startups in Silicon Valley. He saw many of them focused on developing technology without having clearly defined what problem they were solving and, more importantly, who would pay them to solve it.

{related_content}He reasoned that if the goal is to reduce greenhouse gas emissions, it would have to come from reducing worldwide energy use. Two of the biggest culprits are building operations (40 percent) and building materials (12 percent). As he researched the materials used in the building industry, he realized much of the technology hadn't changed for decades and in some cases centuries. This inspired him to apply modern technology that could greatly improve the efficiency of building materials like sheet rock and windows.

Improving technology wasn't Surace's only challenge. He needed to change the way his new products were sold. Surace first hired a sales director from the buildings industry, but found the traditional sales rep couldn't overcome a career built competing on price, even when the sales person knew the company's products often initially cost 10 times that of their traditional competitors. Surace found a new sales director with a high tech background who understood the concept of a solutions sale, describing savings over time as a total cost of ownership. Focusing on savings rather than cost became the financial sales model that has since driven the company's success.

In a separate keynote, serial entrepreneur and former SunEdison founder and CEO Jigar Shah told the audience that it is imperative we change the conversation around energy and climate change. According to Shah, too much emphasis is placed on vague descriptions of opportunity instead of talking about the sizable wealth creation that will occur as the world shifts to new forms of energy.
Carbon War Room Graphic
But Shah cautioned that unlike the IT industry and computing, energy isn't an open field. He explained that if a company decides to leave the grid, it's going to irritate a utility. But a utility is just trying to function in the interest of its shareholders.  "Everyone is a product of their incentives," says Shah.  So entrepreneur Sir Richard Branson recruited Shah to lead the non-profit Carbon War Room. Their goal?  "Harnessing the power of entrepreneurs to unlock market-driven solutions to climate change."

It's an interesting convergence of business, non-profit, and government groups that is focused on creating innovative solutions to attack the "war on carbon." One of the ways to achieve their goal, Shah explained to the building operations executives in attendance, is to "follow the money" and figure out how to help bankers understand their role in new energy wealth creation.

Not all the savings in building operations are hard to find. The most popular session, according to a pre-conference vote, involved low cost and no cost ideas for building operations professionals. Brian Weldy of hospital chain HCA identified three low cost projects.

Re-commissioning was the first suggestion and was also encouraged by U.S. Architect of the Capitol Stephen Ayers. Showing several graphic slides of areas for improvement, Weldy suggested creating a menu list of opportunities for air handler refurbishing as those projects can cause very little disruption to tenants and provide a great return on investment. And simply cleaning water cooling towers can increase their efficiency while reducing the risk of legionella.

His final suggestion was to introduce computer-based dashboards to track how your buildings perform. Weldy noted that "information changes behavior" and that summarizing complex building information can help make it easier to improve operations.  It can also demonstrate to others both in your company and beyond how these projects make good economic and environmental sense.

Thinking Outside the Box

If the economics of sustainable building operations was reiterated during the two day conference, so too were calls to think differently and to innovate. When Serious Material's Surace projected a slide showing all of his company's factory locations, the most intriguing one is inside the Empire State Building in New York.

By taking an integrated design approach, they decided to re-use the existing glass in the building as a more sustainable means to retrofitting the iconic structure. Each night 75 windows are removed, re-manufactured in accordance with Serious Materials' specifications, and re-installed without interrupting anyone's workday. This approach will result in $4.4 million in energy savings and also eliminated the need for a new $17 million chiller.

There were other innovations described throughout the two-day conference as well. Suzanne Malec-McKenna, commissioner for the Department of the Environment for the city of Chicago, described a series of "waste-to-profit" projects where the city seeks to divert the waste streams from industrial sites to become inputs to other local businesses.

Sometimes, it's better to just ask others to think outside the box for you. During a panel discussion I led around employee engagement, Shanna Weber, director of the Office of Sustainability for Princeton University, told of how the initial plan for greenhouse gas emissions reduction used a pie chart to show where the savings would be achieved. One of the largest slices of the pie was a 25 percent savings described as "I don't know." Once the university has picked all the low hanging fruit, they'll depend upon students, faculty and staff to find the other areas of saving.

A similar suggestion was made by Shah during his speech. He was especially frustrated by the approaches taken by universities that don't enlist students to help them achieve their goals. His advice to universities, city managers, and businesses is to post a simple request to the Internet for new ideas.  He suggests keeping it simple by stating something like "we want to sign unique and interesting contracts to create a more sustainable business. Proposals must be no longer than one page." His prediction? Companies should receive 20 proposals on the first day.

Looking outside your company for ideas was reinforced by many of the speakers at the conference. Whether you're looking for innovation or cost savings or both, look for partnerships with employees, utilities and vendors. Attendees and speakers both noted that these partnerships can result in innovative and cost-saving projects.

John Davies is vice president of GreenBiz Intelligence, which provides independent and unbiased research regarding green strategies and business operations. John also leads the GreenBiz Executive Network, a member-based, peer-to-peer learning forum for sustainability professionals.

Top image courtesy of Serious Materials Inc. © all rights reserved.
Inset courtesy of the Carbon War Room.