What Sustainability Strategy Solutions do Global Clients want today?

(Note: this is the first post in a series of articles on developing, validating, and implementing a sustainability growth strategy for current (and future) market conditions. Overview blog post is here. The target audience is CXOs in technology companies and global Engineering Procurement & Construction (EPC) firms who are chartered to lead efforts to grow new revenue streams in this general market sector; as well as those executives in global enterprises who are considering implementation of such strategies.)

In the fall of last year, I wrote about the need for sustainability programs in the industrial sector, given the current economic climate (link). Since that time, we have seen market conditions deteriorate, but conversely, have also seen companies (both services and technology) who are starting to hire again to provide sustainability solutions to their clients. The purpose of this column is to provide some guidance on the state of the sustainability strategy market need; particularly in regard to enterprise systems. Notes from leaders from both the ‘sell’ and ‘buy’ sides of the equation provide additional data points on current trends.

Perspective from Sustainability / Environmental Executives

Many corporations have been focusing on very tactical and survival -based activities, such as cost control and risk / exposure management. The awareness for sustainability solution need (strategy, projects, implementation, reporting) is still relatively high, based on discussions I have had with executives in the energy development and discrete manufacturing industries; but that need is tempered by reduced internal budgets (and available staff), along with more immediate operating concerns (such as equipment maintenance, process safety, compliance, etc).

When sustainability programs compete against operations for resources and internal ‘mindshare’, one can get the ‘rubber band effect’, as an energy development executive referred to it: “the sustainability team gets ahead of itself on programs, and then gets yanked back”. A key issue: what sustainability metrics should be developed and adopted initially?

Another exec from the discrete manufacturing industry offers advice to solution providers: “don’t try to sell the ‘hearts and minds’ programs at this time: aim for the basic needs in environmental programs, such as self auditing programs, and look for opportunities to add value over time”.

And while corporate environmental, health & safety (EHS) departments still provide overall policy development and guidance, many sustainability initiatives (and leadership thereof) are being developed within business groups in the organization. “Initiatives for sustainability are being implemented in engineering departments, who may serve as ‘internal consultants’ to EHS and corporate sustainability staff”, an upstream energy development exec told me. “Sustainability leadership is moving from EHS departments to staff running business processes, such as supply chain management”.

So, from a management systems perspective, such as that for enterprise level risk or carbon management, it may be difficult to develop & sell a ‘top down’ solution. Initiative – specific strategies may be an easier sell.

Perspectives from the Engineering Industry

As I wrote last year, the global engineering procurement & construction (EPC) segment is positioned to provide a range of strategy and implementation services within key sustainability and cleantech segments (article link is here). How has this industry been impacted by current conditions? Talking to a number of executives, the common themes are as follows:

• What was once significant, backlog has been slowly been tapped and is diminishing, especially in the industrial sector and in international markets (which had been strong up to this point)
• Similarly, the increase in signed projects has slowed, as client projects have been delayed
• But, new markets are emerging (i.e. projects associated with the federal / state recovery act funds, energy mgt programs, and GHG inventory development); albeit slowly

Short Term Solutions of Interest

Notwithstanding the opportunities currently to provide energy efficiency & management solutions and GHG inventory / assessments, what are some of the focused sustainability solutions that appeal to executive level buyers today? Based on conversations above, the likely candidates include:

• Initiative Strategy Review (where a client is already performing energy management, GHG inventory assessment, Green IT programs etc; can you help them adapt their strategy to maximize value with current operating constraints?)
• Sustainability Diagnostic Review (evaluate current sustainability programs with focus on current economic conditions. Also, bring in any benchmarking information to competitors or across industries)
• Regulatory Landscape Review (given the myriad of state, federal, and NGO guidelines and proposed regulations, provide client – specific regulatory impact scenarios)
• Emerging Technology Review (appealing to CTO / CIO execs on advances in both IT based technology and ‘cleantech’ hardware)
• Executive Coaching (assisting influencers and other internal staff in evangelizing, educating, and selling sustainability solutions / strategy to internal decision makers)

Summary

Following the current market trends and anecdotes provided above, what are some of the key concepts to consider when developing and promoting sustainability solutions today?

• Pick ‘tactical’ sustainability projects (which may be an oxymoron…) such as strategies for maximizing the efficiencies of existing systems, buildings, and assets.
• You should articulate an accelerated ROI for your clients, but provide a 'platform' (technology based or process based) to allow your client to leverage incremental successes over time across his / her enterprise
• Assessment and benchmarking: executives place a high value on validation of industry trends and insights

Again, initiatives in sustainability ‘sectors’ such as Green IT, energy efficiency, and GHG inventory assessment are areas where solution providers may (and are) provide value to their clients. The purpose here is to find opportunities to assist clients in developing and implementing their sustainability strategies, in context with ongoing operating concerns.

The next article in this series will focus on technology – based sustainability solutions.

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The Need for Social Networking within the Sustainability Community

Over the course of the past 4 years I have had the opportunity to work with or share market strategies with executives at social networking companies such as LinkedIn, Spoke Software, Visible Path, and BranchIT. Of particular interest to me was the ability to develop and leverage what I referred to as "Relationship Capital Management"; the opportunity to develop, foster, and share relationships within an organization (or ecosystem) for the purposes of optimizing knowledge management and revenue generation. (I posted some columns on this trend a couple of years ago on "Relationships as Assets" and Relationship Capital Management and CRM).

Viewing the challenges and opportunities in the sustainability market, it seems that social networking (both process and underlying technology) could play a large role in accelerating both awareness of key issues as well as potentially accelerate adoption.

Why? Here are some of the big challenges in the sustainability / cleantech arenas:

• Talent shortage (engineers, executives, scientists) of trained staff worldwide, with increased demand forecasted
• Limited training and higher education programs available today, especially in light of talent demand
• Wide range of sustainability technology and processes mean no single person / entity can be an expert in everything
• Very few sustainability processes have been codified at this point; case in point: the number of sustainability reporting schemes

The early stage of this field means that formal, centralized business models may not be the best organizational structure to follow (whether within an organization, or within a vendor company providing sustainability solutions). The development of virtual groups, social networks and other more flexible organizations may be better aligned to develop and implement fledging solutions. This is particularly important when one considers the range of expertise required to develop and implement a sustainable solution, a process, or even a company: business case development, financial modeling, conceptual and detailed design, construction, manufacturing / supply of materials, operations, etc.

So how are sustainability professionals interacting, sharing knowledge, and organizing for solution development and deployment? Here are some best guesses:

• Discipline - related: civil / environmental engineering (ACEC, ASCE, AWWA), Sustainable MBAs, etc
• Business process - related: supply chain management, process optimization, procurement, product management
• Industry groups: LEED, AIA, AGC, buildSMART, and other buildings initiatives for architects and engineering design professionals
• Regional groups: such as those in NY, Boston, India, and Silicon Valley; where there is an abundance of educated professionals with significant interest and expertise in relevant business processes
• On - line networks, such as groups set up in Plaxo, Ning, LinkedIn, Virid.us, Facebook, and Yahoo.

In the short term (next year or so) we will probably have multiple small networks that will grow organically along with their aligned sustainability / cleantech sectors (i.e. green buildings, green IT, etc). Over time I think there will be significant opportunities for start ups (one or more of the current social networking sites?) to build fee - based networks and integrate knowledge management, training programs, and perhaps certification programs to ensure high quality and continuous improvement / innovation of delivery.

I'm ready to help.

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Market Research Dilemma: Everybody wants to talk to End Users and Buyers....

I have been working on some market research / validation projects for software firms in the past few months, and it apparent that many software companies are really searching to find that all elusive, all knowing, all seeing.....(sorry, this sounds like "The Amazing Carnak" routine)....

Well, you catch my drift: we all want to interview the perfect end users & buyers who can provide the perfect insights that drive product strategy, sales models employed, pricing / value, and brand awareness. All of us; meaning 20,000 give or take software firms. That's a lot of phone call / email campaigns, all hitting the same group of buyers. To wit:

• End users in general (i.e. 'C' level executives: CIO, CTO) get pinged constantly with a barrage of calls and emails from software vendors
• You may have the best technology / team / organization / investors, but at the end of the day, you are asking for a big favor to get their precious time and feedback
• If you don't do your homework and target the proper end user / buyer, and understand their immediate and near future needs, you may end up causing a negative impression, which is obviously much harder to rectify as you push forward with product launches

So, how do you increase the "signal to noise" ratio of your market research efforts?

• Friends & Family: what relationships can you leverage within your own organization (i.e. management team, advisors, partners, board members, consultants) to get some traction with end users, and even 'pilot' your pitch with friendly contacts
• Leverage the expertise and client breadth of SIs: you can leverage a SIs expertise and client base in their target markets; essentially getting a portfolio view of business requirements. Plus, there may be interest in understanding how your solution / product may add value to their service offerings
• Build Relationships with select End Users, so that you can get referrals: use the viral approach to build out relationships with key end users, and earn their trust so that you can access and leverage their network of relationships with peers, who can serve as contacts as well

It goes without saying that a little market research on the target accounts themselves (market focus, product lines, partners, competitors, and recent key events that affect their performance: quarterly earnings, client wins / losses, regulatory / political events, etc) position you much better, once you get engaged in a dialogue.

Give yourself enough time to gather data: which means you probably can't get a thorough campaign done in a couple of weeks; it will take 2+ months to get in touch with enough contacts to incorporate significant feedback into your customer and 'go to market' strategy.

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