Driving sustainable operations

Driving sustainability into business operations is a journey, initially starting with doing things ‘less bad’ by building in efficiency. But to really drive sustainability, we will need to go far further than this, building sustainability into the core of how we delivery, redesigning the processes and making the investments to create net positive operations. This will inevitability impact all parts of the business, changing the products produced (from reformulation to?completely rethinking the products offered - this will be covered in the product redesign article), redesigning the supply chain and rethinking the core production processes to put sustainability at the centre.

So let’s start at step one - determining how to drive sustainability improvements across all areas of the existing business. In effect we are looking at building sustainability into the core of existing processes while driving process efficiency and effectiveness - I.e.?incrementally changing the current processes in order to make them more sustainable. In most cases this builds on work that is already ongoing, such as continuous improvement and agile approaches to drive business efficiency - while at the same time delivering sustainability improvements - for example reducing energy requirements, driving productivity, etc.?

In addition we want to start rethinking elements of the business philosophy around how operations are run, making sustainability a core part of day to day business decisions - I.e. building it into the language and approaches used in operational delivery. Finally we want teams to start to challenge the ways things have always been done, asking themselves if they started to build the processes again with sustainability at the core, how would they do things differently? Elements such as waste (getting to a zero waste business) are a good place to start as they can be targeted almost independently (I.e. without significant process change) and allow the sustainability ‘muscles’ to be tested - looking at effectively treating waste as a resource, determining what to do with everything from uncaptured heat to surplus materials.

The next step is to then start to redesign core elements of the business with sustainability in mind. What we're looking at here is laying elements of the sustainability equation onto the operational processes in order to drive optimisation. This may challenge the way operations are run. A good example of this has been the impact of renewables on the grid and the recent energy price surge. With organisations looking to minimise energy costs, energy management has become a key part of the conversation. For example if I am looking at change overs and maintenance down time, I may be better off running these parts of the operation at peak energy prices and to be selling the energy back to the grid in the form of demand or frequency response. We may also want to look at trade offs - for example deciding whether it is more profitable to use any spare production capacity to take share in the market versus not using that capacity and selling the energy saved back to the market. The focus will be on redesigning how the business operates in optimising for all the sustainability factors that impact the business - building in the decision frameworks and ensuring we have the skills (and in lots of cases these are new skills) in order to build the additional sustainability factors into the business.

The next stage will be on redesigning how the business operates. What we're looking at here is everything from becoming a prosumer (i.e. Investing in things like private wire), through to product optimisation with sustainability in mind (e.g. Reformulation of products). Again, we aren’t looking at major investment in core process redesign, we are looking at how we can further optimise delivery through changing the core of the product, or adding in elements alongside the operational processes that will,drive sustainability.

The final stage is where the big changes happen - fundamentally redesigning the business. This will consist of everything from redesigning the core of business operations with sustainability in mind in order that you can reach net zero from an operational perspective through to designing and building sustainable products from scratch - either in existing markets or extending into new ones. It may even mean exiting core parts of the existing business. This is where the major capital investment (and associated risk) comes in. This should be considered on day one of the redesign process (as should the other stages)…. Why you may ask? Well the key here is understanding where incrementalism and adjacent investments will end up being wasted cost - and where the inflection point ( from customer sentiment, through competitor pressure, to redundant investments) comes in. We don’t want to be making investments in things that we can’t monetise and depending on the market that you are in and the strategy of the business you may want to leapfrog through the stages I have laid out here to the end point, as that could be the most competitive and financial advantageous approach to take. In any case, these stages need not be run in series but can be run in parallel with elements of experimentation in each of the areas going on while the business is getting the fundamentals put in place.

What will be essential in driving this delivery will be liking the approach into the strategy and ensuring that the metrics and incentives in place are driving the right behaviours. This will also mean building the linkages from operations back into regulatory reporting. It will be essential to have a strong performance management culture with sustainability built into it so that operational teams within organisations have the data, knowledge and support in order to be able to drive sustainability performance improvement.?

This will also need to link into governance approach so that senior management understand the programme of change being delivered, how they support the strategy/net zero targets and that they can track delivery giving them clarity on what is being achieved to drive sustainability and course correct as necessary. It will also link into determining how to price sustainability elements particularly in the short term in a way that reflects the value that they bring - so moving away from pure financial return as the main driver for projects acceptance in the investment stage.

Determining the approach for operational change is at the very heart of the sustainability journey. It will start with fundamental questions around the scale of the challenge we want to take on (for me this has to be about breaking boundaries rather than incrementalism..) and what business will we be in at the end of the journey/what will it look like, and then goes through charting a path through the highly complex changing world that sustainability brings. There are however, as I hope I have laid out (rather simply), approaches that can be taken to break this journey down into deliverable steps…