Fattening the Bottom Line By Making Offices `Green'
LEAN AND CLEAN MANAGEMENT: HOW TO BOOST PROFITS AND PRODUCTIVITY BY REDUCING POLLUTION By Joseph J. Romm. Kodansha, 185 pp., $23
HOW is it that Pittsburgh's 10-story Comstock building cost $500,000 less to build in 1983 than other comparable office facilities in the city? And why does it have only one-half the average operating costs of other buildings?
The answer is lean and clean design, says author Joseph Romm, whose new book is called ``Lean and Clean Management.'' The Comstock building - which Mr. Romm says stands as a model of pollution prevention - was constructed with optimal energy savings in mind. It uses high-efficiency lighting, an energy-management system, efficient pumps for heating and cooling, good insulation, careful placement and design of windows, and a smaller-than-average heating, ventilation, and air conditioning system.
This is just one of several business success stories Romm recounts in his book. The author, who is special assistant for policy to the deputy secretary of the United States Department of Energy, aims to show company managers and workers how to cut nonlabor costs and boost profits through process improvement, ``green'' facility design from the ground up, retrofitting, and other waste-reduction methods.
``Most of the books on the subject of the environment in business are not how-to books, and this one is,'' Romm said in a recent interview. ``The big news here is that [energy efficiency and pollution prevention] give your company productivity gains, better-quality work, lower absenteeism, and higher employee morale. The message is: Get it right the first time.''
To do this, architects, engineers, interior designers, space planners, and other professionals need to be brought together in a cross-functional team in the early stages of a project, Romm says. He is pushing for graduate schools and other institutions to offer more interdisciplinary courses and programs on energy efficiency, waste prevention, and team-based process improvement.
Many, if not most, corporations see environmental projects as a means to meet regulatory requirements. But Romm suggests a new purpose: environmental projects as a way to get ahead.
``Once businesses begin to see that dealing with pollution is an opportunity, the best companies will lead the way, other companies will catch on, and others will go out of business,'' he says. ``[Lean and clean management] is the way everyone in every company - and every government - must learn to act and think in order to thrive in the next decade and the next century.''
Romm compares this style of management - which combines the environment and quality - with what the Japanese did in their own firms in the 1960s and '70s. Instead of continuing to focus on waste already created, Japanese companies began to take aim at the cause of the waste; they treated it as something to be prevented, like consumer complaints and product defects.
But top US companies misunderstood what the Japanese were doing, Romm claims. They attributed their success to automating and reducing inventories rather than a systematic redesign of factory and operational processes, including implementing 76 percent of all employee suggestions submitted each year.
Ironically, the Japanese, starting with Toyota Motor Corporation executives, learned from an American: Ford Motor Company founder Henry Ford, who was obsessed with saving time and resources. Today, ``resource fat'' US firms need twice as much energy as companies in other industrialized nations to produce a dollar of goods; they also produce about five times the waste per dollar of goods sold as Japanese firms, Romm says.
Pollution prevention could be the answer to the nation's slow productivity growth and its unemployment problem, he claims. A 1993 study for the Department of Energy concluded that a 10 percent to 20 percent reduction in waste by US businesses would generate a gross domestic product increase of $1.94 trillion between 1996 and 2010. By 2010, 2 million high-wage, knowledge- and process-based jobs could be created through waste prevention.
When only energy costs are counted, pay-back time on investments made to improve a facility is usually a few years. But when productivity and quality gains are factored in, it is shortened to weeks; the return on investment can multiply from 25 percent to 500 percent. That's because, in a typical building, energy costs an average of $1.50 to $2.50 per square foot, while employee salaries average $150 to $250 per square foot. The design aspects that most improve productivity and quality are focusing on the customer and giving workers more control over their environment, Romm asserts.
He says installing energy-efficient lighting is perhaps the fastest way to save energy, lower costs, and raise productivity and quality since lighting comprises about 40 percent of a commercial building's electricity use. Another 10 percent or more goes to cool the heat produced from the lighting.