Smarter Buildings, Part 2: How to Close Gaps Between Design and Performance

[Editor's Note: This is part two of a two-part series on Smarter Buildings; you can read part one here, and see all our coverage of smarter buildings at GreenBiz.com/SmarterBuildings.]

Why do some green buildings perform as designed or better, while others might barely make the grade, even if certified? It turns out that even the most sustainably designed, intelligent building is only as smart and green as the people who occupy and operate it.

Closing any gap that might exist between design and performance was the focus of the second of two Smarter Buildings discussion sessions for senior executives during the 2011 State of Green Business Forum, a series of programs conducted in San Francisco, Chicago and Washington, DC.

While the Smarter Buildings session in Chicago introduced the topic at the forum and provided a broad overview, the discussion in Washington, DC, honed in on one of the more challenging aspects of building performance –- what happens after the keys to a building are handed over to its occupants.State of Green Business

Begun as a panel discussion by IBM's Vice President of Industry Solutions and and Smarter Buildings David B. Bartlett, Johnson Control's Vice President of Global Energy & Sustainability Clay Nesler, Vice President of Sales Chris Collins for Schneider Electric's Buildings Critical Systems business and Carl Lundstrom, federal solutions manager for Eaton Corp., the talk moderated by GreenBiz.com Senior Writer Marc Gunther became a lively dialogue among the speakers and members of the audience, which included Rob Watson, widely considered "the father of LEED."

Watson chaired the DC-based U.S. Green Building Council's steering committee on the Leadership in Energy and Environmental Design standards for its first 12 years and is now executive editor of GreenerBuildings.com and the chairman, CEO and chief scientist of the EcoTech International Group.

Gunther launched the conversation by asking whether LEED certification, the market leader in the U.S. for third-party assessment and ratings of green buildings, is a guarantee for performance.

"Once you get the LEED plaque up in the lobby, whether it's a new building or an existing building, what do we know about the performance of LEED-certified buildings?" Gunther asked. "Is there data out there that shows they'll do what we expect them to do? Are there guarantees about energy consumption and efficiency?"

"There's no guarantees, in fact, there are lot of issues about that," said Eaton's Lundstrom, alluding to criticism in recent years of performance by some LEED buildings. However, while he and other members of the panel acknowledged the talk, they also pointed out that design is only one part of the equation for smart green buildings.

"It's one thing to build a building, it's another thing to operate and maintain it to high standards -- that's typically where things tend to fall down," said Nesler of Johnson Controls.

Nesler offered further perspective. "It seems like we're trying to find controversy in this area and it's often presented as controversy, but I'm actually not sure it is," he said. "We've never really had a particularly good reason to go back and look at the difference between how we design buildings and how they operate. In fact, LEED actually gave us one of the first good reasons why we want to go back and check."

According to Nesler, the emergence and adoption of LEED spurred the market to consider that work to green buildings isn't over when construction or renovations are complete – a realization that's just beginning to sink in.

"When we did check, we found that not all buildings performed as they were designed," Neslser said. "Surprise, surprise? Maybe. Those of us in the industry were perhaps a little less surprised than others. A lot of LEED buildings performed better than designed … some are below their design and some barely meet code and that's something more endemic to the industry than related to the standard."

Nesler noted the USGBC is taking steps to "make LEED more quantitative" and that the system of standards was designed to be continuously in development so it can adapt to the needs of the green building market as the industry matures.

One of those anticipated changes is the need for LEED building owners to report the performance of their properties to the USGBC to maintain certification. "In the old days, you could pretty much weld the plaque to the wall," Nesler said, "but where the U.S. Green Building Council is moving, someday you might have to have a crowbar handy because you may have to remove it."

Such a reporting requirement lends further support to the idea that the greatest opportunity to improve energy efficiency and building performance across the board in building stock lies with existing structures. Buildings consume about 40 percent of the energy and 70 percent of the electricity used in the U.S., and existing structures far outnumber new construction.

Initially with LEED, the market tended to focus on new buildings. But as Watson's annual Green Building Market and Impact Report shows, the fastest growing segment of LEED project registration is among existing buildings.

At one point in the discussion in DC, Gunther asked Watson, "What accounts for this gap between the plaque and operations?"

Watson offered a two-part response. "No. 1, when we were designing LEED, we started with the easiest thing new construction," Watson said. "Second, the fault lines between standards reflect the fault lines within the industry itself."

"We spent years, literally years, arguing about that line between design and operation," Watson continued. "And one of the reasons why LEED succeeded, in my opinion, is that we only graded people on things they'd have control over.

"There are numerous fault lines in the control and delivery process of buildings … initially our job (in developing LEED) was to make friends, not to be cops. Now that we've got people's attention, we can start moving the industry a little more. What I hope to see going forward is more integration of the design and operation issues. This is an evolutionary, a co-evolutionary, process."

Smart buildings are also the results of an evolutionary process  -- the development of increasingly sophisticated equipment to control buildings systems and technology to monitor and network those systems, collect data on building performance, analyze the information and help building operators maintain or plot new strategies for optimizing efficiency.

Asked to share his vision of smarter buildings, Bartlett said, "some of you may be wondering what is an IBM computer scientist doing sitting up here. But working with mechanical engineers, we realize there's an opportunity: Given the proliferation of smart sensor technology and the range of appliances and systems now available in buildings, there's an opportunity to collect data at a level that has never been done before."

Smarter buildings, Bartlett said, are about getting that wealth of data "into a warehouse, doing the sorting, the sifting, the correlation and applying rules to understand what needs to be done, so you can use real-time analytics and optimization."

"This is where companies like IBM make a lot of sense," Bartlett continued. "We've been in the business of data collection, warehousing and running analytics and providing analysis."

Wedding the firm's analytic might with robust data collection, building systems and energy management is at the heart of a growing line of business for IBM -- and for other companies that are vying for marketshare as the intersection between technology, the built environment, transportation and cars, and management of resources such as energy and water becomes more pronounced.

In what has become a hallmark for business strategy in this new arena, erstwhile competitors increasingly are collaborating to pool their strengths in carefully crafted partnerships. Last year, for example IBM announced a series of strategic partnerships with Johnson Controls, Schneider Electric, Eaton and other companies. Johnson Controls, Schneider Electric and Eaton also are members of the IBM-convened Green Sigma Coalition, which was formed to advance enterprise sustainability through projects that cut resource consumption, waste and greenhouse gas emissions.

"Where we see the future of intelligent buildings is the marriage of mechanical engineers and IT people," said Collins of Schneider Electric. "We see it taking a really more active role in developing sustainability programs."

Collins also provided a glimpse of what building systems experts see on the job. "What we found is we can go in, we have products, we know buildings, we know how to make them smart, we know how to make them save energy and help save you money," he said.

But after completing that work, which can entail a full retro-commissioning of a building, "within three years, 90 percent of those savings are gone if you haven't changed the cultural mindset on how to operate the building," Collins said.

"I guess I don't understand, if you go in and retrofit a building and improve the lighting and put in a more efficient air-conditioning system, how can you lose those kinds of efficiency gains within a short period of time," Gunther interjected. "What's missing?"

Collins sketched out a scenario in which his company undertakes an extensive energy project and draws up a schedule for lighting and other systems. "Then, as soon as we walk out the door, the (building) operator gets a call," he said. Someone is working late and doesn't understand why the lights aren't on. "So rather than educate the building occupant on how to schedule off-hours, he goes ... and overrides the lighting controls," Collins said.

"I see everyone here is shaking their head at this story," said Gunther, as a wave of uncomfortable laughter rippled around the room.

The anecdote, coupled with an earlier question from Watson about how sustainability professionals bridge the gap between LEED plaque and building performance, unleashed a barrage of observations, best practices and other comments from the audience. Their input prompted further remarks from the panel. Here are some highlights of the conversation:

Challenges posed by buildings

"Don't assume that just because you have a new building, you have an energy efficient building," said Collins. "Anyone on this panel can walk into your building and find three or four things (that can be improved)."

"We haven't found a building yet that we can't improve," Bartlett said.

"If you're not hitting 30 to 35 percent you're not working very hard," Watson said about returns on investment from retrofits and improvements, "but you have to break the 1950s rules that made the building dumb in the first place."

"The overwhelming opportunity is in existing buildings," said an audience member. But in making improvements, "we have to do more than bring buildings back to their originally designed performance. They have to be better."

Challenges posed by people

"The first thing we did was realign our organization," said one attendee in the roomful of executives from major federal agencies and global firms. "Ninety percent of our problem is the people piece. If we don't change the people piece, the behaviors, we'll still have issues."

"It's the toughest nut to crack," said another member of the audience.

"What you said about the human element cannot be overstated," said another. "The roadblock is culture change."

"To have smarter buildings, we need to make people behave smarter," said yet another.

A tip on getting buy-in from the top on energy efficiency projects

"Probably, the first thing to do is not mention energy," said Watson. "Productivity, employee health and well-being, what's the company's CSR, what's your legacy – those are the things CEOs think about."

Watson suggested that people point out what rivals are doing by saying: "Your competitor is doing this. What's your sustainability story now?"

"You do have to make it an ego trophy," Watson said. "But you don't talk legacy to the CFO, you have to tune your message to the people."

Information is good …

"I trust in the inherent judgment of people wanting to do the right thing, but you have to give them information," said Bartlett.

"The more you can sub-meter, the better," Lundstrom said. "The users want to know it (that information). We can give anybody a window into the building."

"We have dashboards on desktops so that every section can see how it's doing," said one executive.

… But not too much

"Information can set you free, it can also shackle you," Watson said. Dashboards and other formats providing feedback to building operators, tenants and other users need to be easy to understand. "Keep it simple," was his advice to firms providing energy services and solutions. "We shouldn't design systems around the power-users (superusers)," Watson said. "The people who make the damn things are different from the people who operate them."

Incentives and the power of the nudge

Speaking of various incentives for landlords, tenants and employees, participants noted that incentives needn't always involve money. Several spoke of friendly competitions among employees or business departments based on reducing energy consumption and waste, recycling drives and the like.

Gunther urged executives to keep in mind the "power of the nudge." Writing about Poland Spring last year, Gunther reported that to see which of the company's drivers had the most idle time, truck fleet manager Chris McKenna compiled a list of based on information from onboard computers:

"All we did was talk to them about it, and put a list up in the break room," he told me. "Human nature, no one wants to be at the bottom of the list."

"A little competitiveness is always good," said Bartlett.

Don't reward good work with more work or, even worse, budget cuts

"If you look at if from the perspective of the guys in the boiler room, they are asked to hit ROIs that the guys in the C-suite could never ever make in a million years … and when when they do hit it, then they are rewarded with budget cuts -- what's not to like," said Watson.

Celebrate home runs

Gunther and Watson pointed to the extensive retrofit of the Empire State Building, undertaken by Johnson Controls with several other partners, as an example of a successful enterprise sustainability project from inception to execution.

The project, which Nesler detailed in forum presentations in San Francisco and Chicago, included a revamp of lease arrangements to motivate tenants to become more energy efficient and mechanisms, such as sub-metering, to educate occupants.

"Energy efficiency is a team sport," Gunther remarked, as the session wound down toward its close. "What position do you play?"

Top Image -- The Smarter Buildings panel at the State of Green Business Forum in Washington, DC. Seated left to right, Carl Lundstrom, Eaton's federal solutions manager, Johnson Control's Vice President of  Global Energy & Sustainability Clay Nesler, IBM's Vice President of Industry Solutions David B. Bartlett and Vice President of Sales Chris Collins for Schneider Electric's Buildings Critical Systems.

Photos by Goodwin Ogbuehi, http://flickr.com/photos/yoshikatsu