Energy, Inefficiency, & Recession: Don’t Ignore The Smoke

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Energy, Inefficiency, & Recession: Don’t Ignore The Smoke

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There’s a fire happening right now, and businesses mustn’t ignore the smoke.

We’ll leave aside inflationary pressures on food and other goods and services and look primarily at the energy crisis and the expected recession looming on the horizon - and what businesses can do now, before the fire takes hold.

First off, businesses are looking at a bigger challenge than it could have been, had sustainability measures been previously rigorously applied. It’s still estimated that nearly a third of energy is wasted in just UK buildings. Just in this country that equates to a whopping £33.9bn.

As we feel this squeeze affecting both energy bills and a doming-like rise elsewhere, businesses are looking at how they set their prices and trim their costs. They must take the bull by the horns and implement the solutions to reduce energy consumption and keep staff productive and supported so they can deliver their best and most efficient work and retain customers. Losing staff kills businesses.

Energy is an emblematic crisis - as wastage is one of the most relatively straightforward problems to manage it shows those organisations already on top of it are conscientious and attuned to maximising their efficiency. The challenge comes from understanding and planning better use of resources and appliances. For example, operator behaviour and poor maintenance were identified with excessive electricity usage in a study, Electricity Use in the Commercial Kitchen, with potential energy savings of 70% and 45%, if addressed. Obvious immediate effects can be implemented when inefficient equipment is remediated. But faulty equipment and efficient human usage is harder to observe, without rigorous observation.

Given that energy used in catering facilities, as an example, accounts for 4-6% of operating

Costs, and that many caterers’ profit margin is within this range, it shows that addressing the challenge can directly impact revenue and profitability (from The Carbon Trust).

Those that have not engaged with their energy use are likely to, for example, choose to use paper processes or may not have digitised and optimised their working conditions. In this way they are taking a stand and effectively telling their staff and shareholders that they are happy to run inefficiently. But now the costs are rising and harder for leadership to ignore as the regular cost of business when efficiency gains are attainable.

A business that gives a ****

To be a business that cares means to take action where it matters, Empty gestures are not wanted. Just as a focus on energy can illustrate how business operations are deficient, there’s also a strong similarity with the way employees are told to work. Where this is antiquated and provides poor experience then good people will be dissatisfied and leave. This is not something exit interviews may touch on, but a focus on how business processes work for the employee can also improve experience, and thus retention.

Great leaders want to save avoidable costs, and more than ever, bring down employee churn that many sectors are experiencing as the ‘great resignation’. It’s too risky a strategy to allow skills, experience, and knowledge to go out the door unnecessarily.

Be serious about improving the business. Take the time to investigate, plan, and act with care. There are no small projects where efficiency is concerned. Sustainability projects offer almost five percent higher operating margins and lower volatility. This includes energy wastage from outdated appliances. It’s similar with staff workflows and working practices, and in how leaders and managers treat their teams.

Invest where it makes sense to bring down costs and risk, and use automation to save the pain of tedious routines to give the time back to teammates to do great work. Priority one is to understand the correlation between behaviour and energy usage. Priority two is to drive better behaviour using technology, and a by-product is better employee experience and less churn. It’s not the right time to be losing key staff for easily improved factors.

Primarily these energy and staffing crises both hinge on conscientiousness and efficiency, and quickly deployable tools to address these include IoT (internet of things sensors and devices) and automation. The ‘augmented enterprise’ is one where leaders combine their people, assets and buildings, making each ‘smart’, and gain the ability to manage through intelligent operations.

Blending software, hardware, such as automated sensors, and AI derived insights, can deliver intelligent operations that uncover and help smooth out the inefficiencies causing those dragging costs. Many employees are more conscientious about energy and sustainability than their businesses. This is less about a generic elevation and more about helping them understand the value and purpose of their work in line with sustainability goals, and in turn eliminating poor behaviours.

One marker is the use of paper-based processes. Any process requiring such manual and inefficient reporting will not drive behaviour change because they involve retroactive reporting. Supporting staff by digitally guiding before, during, and after working operations is a much more effective process - and one that can then provide actionable, live data, to further drive decision making.

The augmented enterprise

Organisations as diverse as NHS Trusts, life sciences firms, restaurants and motorway service stations share a need for efficiency, a considerable number of assets to be cared for, and a deskless workforce with many demands on their time.

IoT sensors are more effective than staff at tracking and communicating the status of utility using devices. They can wirelessly track if appliances are operating effectively and at the right times or temperatures. Doors, windows, freezers and fridges, ovens, heating, ventilation and air conditioning - all can be monitored and smartly controlled by need. Wastage is controlled and consumption regulated. Moreover, anything approaching end of life can be replaced without failing. With food storage and preparation appliances these can be the difference between a facility running or not, or stock preserved or spoilt.

Automation takes away some of the mandated compliance checks put upon staff in food preparation facilities or around medicine storage. No need to put thermometers in fridges or into cooked food to tick a list of checks when the information can be streamed into the business intelligence platform. Over 70 percent of deskless workers must use manual workflow processes - on paper, offering out of date data to leaders, part of a dumb enterprise.

Choosing to maintain the status quo is to choose to accept poor working conditions and unintelligent solutions to the growing complexity and volatility of our business environment. Read the signs, see the smoke on the horizon and take the time available to get the business into shape before the fire arrives at the door.

Kit Kyte is a former British Army captain with the Royal Gurkha Rifles and CEO of Checkit.

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Energy, Inefficiency, & Recession: Don’t Ignore The Smoke

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