AuthorOlumide Aina

GO GREEN WITH LESS DOLLARS

To go green in our current economic state might not be a realistic thing to do for an organisation because many people associate green buildings with increased costs and overarching strategy. In contrast, greening a building is much more important to consider in a time like this especially in the city of Lagos where population is increasing with upsurge in greenhouse gas generation and waste management is still very poor. A basic example is the use of R22 refrigerant with Air-conditioning systems. The question is, when will the decision makers get involved in the advocacy for climate change and the protection of our planet Earth?  Unlike new construction, existing buildings not only produce cost savings, but they can create unprecedented and tangible savings opportunities to fund this necessary transformation of the existing commercial and residential buildings. Existing buildings need to be at the heart of the conversation and action plan to reduce greenhouse gases, conserve natural resources and make buildings and people healthier, while contributing to the company’s competitive advantage.

Why existing buildings? The most recent research by FMTalk360, a facilities management resource  reports that there are approximately 155 million existing buildings in Nigeria and 54,138 new building projects ongoing nationwide. That means there is huge opportunity to consider greening our homes and commercial properties and in turn reduce the impact of building activities on the environment. In addition to producing nearly half of all greenhouse gas emissions and massive electricity use, the U.S. Green Building Council (USGBC) reports that commercial, industrial and institutional buildings globally: Consume about 40% of all energy; Use 12% of all freshwater and 88% of all potable water; Take up to 40% municipal solid waste stream; Use 40% of all wood and other raw materials; and Exploit significant amounts of land. Existing buildings’ cumulative carbon footprint is enormous. However, the benefit of reducing each individual building’s impact on the environment is coupled with the opportunity for the building owner to cut costs.

Why buildings? It is quite revealing that amidst all of the attention being paid to vehicles, it’s a surprise to many that buildings are the biggest producers of greenhouse gases. The U.S. Department of Energy (DOE) reports that globally, commercial built environment produces 48% of the worlds’ greenhouse gases annually (transportation is 27%). Seventy-six percent of all electricity generated by power plants is used to operate buildings. While it is important that cleaner and more efficient transportation options meet the market’s demand, buildings require even more attention if energy costs and climate change are to be managed for the sake of the economy and the environment, which impacts us all sooner or later. This is the utmost reason we at Green Facilities Limited are poised to help combat climate change through effective sustainable facilities management.

The economic incentive behind greening existing buildings is based on the revenue streams that can be generated. For example, before getting started on a green building project, a real-time, lifecycle cost analysis, and energy consumption forecast of the building can be done that will show exactly where the project can create and deliver real efficiencies and dollar to Naira savings. Conventional wisdom suggests that the construction costs of a building will pale in contrast to the costs to operate a building during its existence. Understanding that  energy and operations account for approximately 75% of a building’s costs over a lifetime—whereas design and construction costs are 11 percent and financing is approximately 14 percent in that same timeframe makes an existing building the perfect candidate for a green retrofit.

The process of retrofitting an existing building to make it a high performance green building is the first step. Ensuring that the building is now operating as expected is the second and arguably, the most critical step. In a typical office building, energy use accounts to 30% of operating costs, the largest single category of controllable costs. If you can upgrade equipment and day-to-day operations to reduce those costs, you not only save money, but you reduce the amount of greenhouse gases spewed by the local power plant which in turn conserves a natural resource, such as coal and even labour cost.

However, high performance green buildings have the reputation of costing more, they don’t have to be more costly. While the data continues to be collected as to the costs of greening a building, some products and services might be more expensive, but the savings over time are compelling. For example, after the National Geographic Society building in Washington, D.C., was retrofitted (1 million square feet) in 2003, it experienced a savings of 60% per square foot, or a US$600,000 savings annually. Johnson Controls delivered 75 cents per square foot on its own 440,000 square foot downtown Milwaukee, Wisconsin, facility, for an annual savings of US$333,000 when it completed renovations in 2005. (Source: Johnson Control)

Some savings streams can pay back in less than six months—such as recycling and other waste management practices. Water efficiency can show paybacks in less than two years. Traditional energy and lighting upgrades will pay back within 2 to 10 years. Renewable energy technologies take longer; it is worth it, but those payback periods are decreasing as better technology is developed and incentives become more realistic and available. It is up to building owners to engage their Facilities Managers in conversations like this if they are oblivious of value added services that can guarantee peace of mind or rather they can easily replace them. This is because the Facilities management market is a buyers’ market and the customers can search for better offerings rather than sticking to one that does not have the success of the client in mind.

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HOW TO ACHIEVE HIGH PERFORMANCE BUILDINGS WITH COST SAVINGS OPPORTUNITIES

The fundamental indices to check in order to identify a high performance building are; energy and water efficiency, environmental impact, asset reliability, and occupant health, safety & comfort. According to the United States Green Building Council (USGBC), adopting high performance building outcomes can reduce energy and operating expenses by 30% to 50% over the course of a building’s typical 50-75 year life cycle and also create a safe comfortable environment where employees can thrive and productivity can soar with good experience. With this, the building owners can command premium rents from their prospective tenants. Examples are the Heritage Place, Nest Oil Building and Yudala Heights, all located on the island in Lagos.

Some of the important elements to consider in high performance buildings are; good resource efficiency which leads to reduced operational cost and environmental impact. Obviously, these dimensions of performance are critical and important to provide the initial justification for choosing “green” energy-efficient and water-efficient options during the design and construction phase, even in cases where these choices result in slightly initial higher building costs.

Congruent to this, our needs and thinking has evolved with the expansion of a high performance building beyond the basic energy efficiency and environmental impact to operations of such buildings so as to contribute to the growth of the organisation.

WHAT IS A HIGH PERFORMANCE BUILDING?

According to the National Institute of Building Sciences (NIBS), a high performance building is a building that integrates and optimises all major high-performance building attributes, including energy efficiency, durability, life-cycle performance, and occupants productivity in order to ensure the bottom line and organizational objectives are achieved. A high performance Building helps to achieve the 11th Goal of the Sustainable Development Goals (SDGs) which is to develop sustainable cities and communities.

In view of this, Dave Taival (2012) opined that High performance buildings are created using a highly effective methodology that combines financial, operating and energy analysis with specialized service offerings and available financing. He further explained that they use design and operating standards that are created, measured and continually validated to deliver desired business outcomes for owners. High performance building outcomes meet specific standards for energy and water use, system reliability and uptime, environmental compliance, occupant comfort and safety, and other success factors. So, it is the responsibility of the Facilities Managers to continually invest in solutions through appropriate standards that can help achieve aforementioned expectations for a high performance building.

In one of the past research publication by USGBC, operating costs typically account between 60% to 85% of the building life-cycle costs compared to only 5% to 10% for design and construction costs. High performance buildings reduce overall life-cycle costs so companies can invest in other priorities and make buildings “assets” instead of “cost centres”. By looking at buildings as assets, financial leaders can communicate its value to the people the building serves (environment, comfort, safety), value to customers and the community (competence, environmental responsibility), and its value to the bottom line (cost savings, avoidance, ROI).

CASE STUDY: GREEN FM HIGH PERFOMANCE BUILDINGS APPROACH

GREEN FM helps organizations achieve financial, sustainability and corporate goals and transform buildings to be high performance buildings by developing concrete strategies that customers can define and implement and that GREEN FM can easily deliver and measure. GREEN FM’s approach for delivering ROI is focused on six (6) key areas: understanding the customer’s mission; conducting a critical systems audit and facility assessment; providing performance improvement recommendations; implementing improvements; providing continuous systems monitoring & control; periodic audits and ongoing assessment; and delivering measurement and evaluation.

To help customers realise their mission, GREEN FM utilizes a comprehensive High Performance Building approach. This is a customer-centric process which begins by conducting a building improvement survey that analyses gaps between a building’s current and optimum energy performance with appropriate benchmark with related buildings. We call it the BIG DATA approach because GREEN FM believes that DATA is the new Oil that most organisations drives their businesses. The process makes performance improvements, validates system performance within set standards, provides period energy audits and identifies improvements. Although, this may be challenging sometimes because some clients are not willing to change their thoughts over the conventional and traditional way of managing their facilities which is more focused on corrective and preventive maintenance. Upgrades to control systems with intelligent technology that uses analytics to improve efficiency and self-sufficiency and continuously monitors and analyses data against operating benchmarks are often key to the process. GREEN FM provides a new level of technology-enabled services to help building owners and operators achieve and maintain optimum building performance at all stages of the process.

GREEN FM leverages on the latest technology to create a whole-building, total-lifecycle, knowledge-based approach to establishing and maintaining performance standards. At the design stage, technologies are available to help building design and management teams achieve the highest possible efficiency. Energy modelling and analysis tools provide comprehensive and accurate analyses of energy and economic impacts of building features. Engineers use computer simulation software to develop virtual models that are a powerful tool that can be used to analyse building performance. The software examines the various zones and systems to simulate the building’s energy consumption patterns. It then creates a total picture of the building’s energy use, including how energy consumption breaks down by fuel type, task, and building component. It is best to use modelling early in the design process. This allows the high-performance building team to prioritize investments in efficiency strategies that will have the greatest impact on the building’s energy use. Many high-performance building teams incorporate renewable energy technologies into the design phase to reduce utility dependency and environmental impact. Benefits include greater stability in power supply, and often government incentives to help fund renewable applications.

The most effective service and maintenance outcomes are holistic, technology-enabled and knowledge based, with a focus that extends well beyond the preventive maintenance and task-oriented strategies which is no more effective and efficient. Service offerings that support the full range of a high performance building’s operations use robust and proven processes, computer modelling, diagnostic testing, predictive technologies and other state-of-the-art techniques.

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7 Easy Ways To Save Energy In Your Home

Recently, a new breakthrough in saving home energy was discovered. What Every Family Must Know!
It’s amazing, because it covers nearly every bit of information you wanted to know about saving home energy, plus more…Just imagine being able to reduce your bills in 7 days (or less) without spending a lot of time.  And you could do this from the comfort of your own home, wouldn’t that be great? Yes you could have an energy efficient home. It truly is possible, but you just need to know how….”
  1. Understand how your home uses energy.House energy consumption chart
  2. Reduce heat gain by insulating your house especially the windows.
    Identify possible air leakages in your home and seal them. Reduce leaks in ducts.
  3. Set your Air-conditioners (HVAC) thermostat.
    It has been proven that if you set your Air-conditioning thermostat to 22°C rather than the usual 16°C to avoid over working of the refrigerant compressor, you can save up to 30% of energy consumption in your home.
    Do the same to your Refrigerator and Freezers, you can set the thermostat to medium instead of the full throttle especially when you have 24 hours power supply.
  4. Maintain your Air-conditioning (HVAC) SystemsMake sure to clean or change your air filters regularly. A dirty air filter will reduce free air flow thereby making the system work harder to keep you comfortable and costing you more money.
  5. Replace inefficient home appliances with ENERGY STAR® models.
    • Home appliances account for about 13% of the average home electric bill.
    • ENERGY STAR appliances use 10-20% less energy than standard appliances. This helps save money and the environment.
  6. Change to energy efficient light bulbs.
    • Lighting makes up about 12% of your home’s energy usage.
    • LED bulbs use 70-90% less energy and last up to 25 times longer.
  7. Eliminate Phantom LoadsThe term “Phantom load”, also called “Vampire consumption” refers to the energy that an appliance or electronic device consumes when it is not actually turned on. According to the recent research by the United States Green Building Council, about 75% of the electricity used to power home electronics is consumed while the products are on standby. A report from the University of California Berkeley also says that phantom loads account for about 6 percent of all national residential electricity consumption. You can eliminate phantom loads by unplugging appliances and electronics when you are not using them, or by plugging them into a power strip (Extension Cables), and turning the strip off when they are not in use. For more information, see Save Energy, Eliminate Phantom Loads.
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FINDING THE SWEET SPOT IN FACILITIES MANAGEMENT

Facilities management is no longer a strange and new profession with several definitions from various professional bodies (IFMA, BIFM, FMA, SAFMA) based on their diverse understanding of its potency to solve evolving and emerging challenges in the built environment. In the quest to provide tailor-made services to clients, based on the need for flexibility aside interest to focus on their core area of expertise. Facilities management can thus be used to provide the expected results if the basic elements (People, Place, Process & Technology) are applied appropriately.

The sweet spot is thus a place where a combination of factors results in a maximum response for a given amount of effort or force. For example, in a game of tennis, squash, racket ball, baseball, cricket or golf a given swing will result in a more powerful hit if the ball strikes the racket, bat or chit on the latters sweets spot. How Facilities Management service providers and practitioners can identify their sweet spot or unique competing space to enable them to continually add value and make profit is dependent on the synchronization of these basic elements. Sweet spot is also where you operate at your best doing what you love and getting paid for it because the market seek for it. It is also a unique place where your strength and capabilities which is second to none lies. In the context of an organisation, it is the unique competing space where value output is at its maximum.

Considering the strategic sweet spot model according to Harvard Business review, the strategic sweet spot of a company is where it meets the customers’ needs in a way that rivals can’t, given the context in which it competes, (Collis & Rukstad 2008). This is also the firm’s opportunity space for creating a uniquely differentiated value offering as a“sweet spot”. This is the competitive domain in which the company succeeds in meeting customer needs in a way that its rivals cannot and it is value based. This space, once established for the firm, is competitively interesting for a number of reasons. It sets the firm clearly apart from its competitors. This has important implications for the firm’s reputation; this, in turn, has consequences, for example, for the firm’s ability to build its brand, attract talent, focus on value, and thereby gain access to new markets. It also provides a unique competing space, once established, has important economic pricing implications. It sets the firm apart from its competition in respect of its ability to price its value offering at a premium by virtue of the uniqueness and superiority of that value offering.

The firm’s sweet spot is the domain in which the firm creates and delivers a value offering in response to customers’ changing needs in a way that competitors cannot. The sweet spot portrays this domain schematically; the value proposition substantiates the essence of the unique and superior value offering suggested by the domain.

Strategic Sweet spot

You often hear – focus on your sweet spot. But what does that mean? For an FM business it might mean the intersection of its strengths, its customers’ requirements, its competitors’ weaknesses and by identifying this intersection it provides clarity, creates opportunity, maximizes success…

According to Rich Schetren, strategic sweet spot in business is the intersection of all its uniqueness its convergence of all its capabilities and provides the best competitive outcome. Now, owing to the sweet spot strategy that focus on providing unique offerings that its competitors cannot give the available customers in the FM market, it is important to link the sweet spot of facilities management which will serve as the company’s capabilities and the changing needs of the customer.

The above model can be reviewed as thus;

What most FM company’s should be looking for is to identify where they will be creating the biggest impact. Just like in the game of tennis, the centre of the racket is the sweet spot- the area where the ball would bounce most effortlessly and accurately off the racket. It gives the most powerful feeling, and a great sweer sound! The sweet spot of facilities management is where the best music is heard which can be synonymous to adding value continuously.

According to Steven (2015), facilities management should add value through the provision of reliable building services, pleasant facilities staff, solutions for facilities’ needs and demands, resourcefulness in solving facilities problems and innovation in increasing workplace productivity. He further added that the sweet spot of facilities management can be felt when it is used to reduce expenses. He identified four methodologies and strategies where facilities management may contribute in reducing its organization expenses are;

1.     Productivity – increasing work place effectiveness and efficiency.

2.     Innovation- initiating innovations that enhance facilities and business operations.

3.     Quality – implementing improvements in operations and workplace quality.

4.     Safety – incorporating safety in work activities to increase morale of workmen.

It is important that we consider the four (4) major elements/factors that can produce a sweet spot which add value to the customers’ unique needs. The four factors are people, place, process and technology;

In one of my recent article, “talent management in the built environment”, I discussed about the people aspect of managing the built environment as the most important factor which is required to stay competitive and enables an FM company to always have an edge in the market. Please see Facilities Management Ideas and FMTalk360 for more details.

In the end, no matter how fantastic the FM strategies may look like which obviously captures the process, use of technology as a process enabler, it’s still the people that will execute them. Hence, continuous delivery of value through the identification of the sweet spot, the people aspect of the business must be taken seriously with much strategies to keep the team up to date in customers’ service, new and emerging trends in FM practices and also motivate them to continually deliver value. As regards to the process aspect of FM, (Ruegg – Sturm, 2004) in Jausen, te al (2012) argued that “value – adding activities within organizations are predominantly achieved by managing processes.

According to Frederick Benchner; the strategic sweet spot is the place where passion, abilities, talents align with opportunities to solve; economic, social and environmental problems. Finding their strategic sweet spot is an essential for any business – it’s the spot where passion, purpose and potential merges with the needs of a targeted audience. Finding the strategic sweet spot is not easy, for example; in sports the professional athlete practices a gazillion time to find the sweet spot on their – chit, racket, bat and the same is true in business which requires focus and discipline to succeed eventually.

As a case study, I’d like to consider Caterpillar, an American Power Generating company in the early 1970’s. Robert (2006) explained that Caterpillar enjoyed a large market share in the earth moving equipment and spare parts business because this is where their capabilities lies. He added that they derailed in sustaining their sweet spot when they decided to acquire Tow Motor and started the Tow motor business. Robert (2006) argued that “the strategies of caterpillar and Tow Motor were incompatible, a mismatch that undermined both businesses, leading to huge losses and depleting CAT’s competitive advantage. This was in addition to the attack by their major competitor, komatsu during this period and they were already “eating the cat” which was their slogan at this time.

During this period, shareholders value began to dwindle because consumers (customers) perceived value was not in tandem with Cats’ current strategy. Hence, they cannot meet the bottom line of even breaking even in terms of profit margin. It was not until George Schacfer, CEO of Caterpillar (Cat) from 1986 – 1990 having recognized that his company was in grave danger that he had to review their strategies through a unique strategic thinking process that helped the company to make a remarkable and world record turn around.

With this revelation, Robert (2006) concluded that CAT refocused its energy and attention on the continuous provision of value which later help them to bounce back and take back their unique competing space or otherwise called sweet spot from Komatsu. He explained that the CEO Glen Barton (2000 – 2004) reminisced at that time that they went through a period of time in which they closed a lot of factories and tried to become a low-cost source, not necessarily to compete on price, but to make a profit on the prices at which we were already selling our products.

The sweet spot of facilities management can be discovered when the very best is obtained from each of the four major factors that defines a performing FM company. They have a highly motivated team with clear cut understanding of the vision and mission of the company with clarity to the fact that they also are self-fulfilled while meeting the company’s own corporate goal. With the process also infused into a workplace that encourage innovation, team development, forming and sharing of ideas. In relation to this, the technology as an enabler helps the company’s to synchronize all the three (3) factors together to provide an expected result which obviously meet the clients expectations and value for money.

According to Olaranwaju & Willmott (2015), the strategic sweet spot can only be found when the business dig deep into its real purpose, reasons for being, its uniqueness, its competence and its value. Therefore, the business must be strategically aligned with improving customers outcome at its core foundation. In the article “Hitting the sweet spot” by Paul O’Dea writes: in business the strategic sweet spot is where a target customers needs fit with what’s special about the business. Applying the 80:20 rule, 20% of customers deliver 80% of the profit: that 20% is the sweet spot.

Leading or start up Facilities Management organisations can find their sweet spots through rethinking the way they operate. This can be achieved through adjusting to growing trends in the FM Market which will inform the review of the four basic elements (People, Process, Place & Technology) as explained to see how it meets the current needs and future challenges in the built environment.

References

David J. collis and Michael G. rukstad (2008), “Can you say what your strategy is” Harvard Business Review.

Michel Robert (2006) “The Strategic Thinking, Pure & Simple” McGraw-Hill

Tunde Olanrewaju & Paul Willmott (2012), “Finding your digital sweet spot” www.mckinsey.com/business-tecnology/our-insights/finding-your-digital-sweet-spot, Accessed: 22082016.

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