Rivers of Thought
Life, Leadership, Business & Technology
A friend of mine from Paris sent me an article that recently appeared in the Los Angeles Times (no, I normally don’t receive my U.S. news from France… just another indicator that the world is flat!): “Flat-screen TVs to Face Energy-Efficiency Rules” (http://www.latimes.com/business/la-fi-tv3-2009jan03,0,2869589.story). The article describes the reaction of the consumer electronics industry to the proposed regulations to limit the TVs retailers are able to sell: only those sets consuming power under a certain limit will be allowed to be stocked. While these regulations have not been adopted by the state of California, it is very likely that they will be before mid-year. The industry is opposed… it will lead to higher consumer costs, it will lead to lower sales, it will lead to fewer jobs, it will lead to lower sales tax revenue for the state. Sounds like a familiar argument? They go on to say that consumer demand will drive the innovations anyway, so why regulate it? Anyone remember the gas crisis of the 70’s?
Another example is the movement toward green building concepts. Buildings are one of the largest consumers of power in this country, and rank above the automobile on the amount of CO2 added to the atmosphere. Yet, there are still many builders today that build to the building codes and nothing more. Some of the excuses are the same ones given by the consumer electronics industry, or the auto industry or the energy industry.
This energy crisis is real. It doesn’t matter if you are a disciple of Al Gore or a follower of T. Boone Pickens. The problem is here to stay and business strategies should address it. Your business may be strictly a consumer of energy or your product may consume energy throughout its lifecycle. In both cases, you or your customers will be looking for ways to reduce that consumption. Whether the changes are legally mandated or consumer driven the impact to your business is the same.
This does point out a very valuable lesson, and underscores the importance of a sustainable approach to business. A truly sustainable business operates on not just the financial bottom line but at the confluence of the triple bottom lines of people, planet AND profit. People meaning all of your company’s stakeholders, including your customers, your employees, your stockholders, your community and in this case government agencies and regulators. If you are like most businesses, incorporating these strategies into your business will be much less disruptive than waiting until it is legally required of you to do so.
The point is that these are complicated issues that are not going to be solved by only looking to the financial bottom line. It has to be an integrated approach that uses input from all stakeholders. In this difficult financial economy, looking out beyond the next payroll feels like science fiction. But we have to continually project ourselves 3, 5, 7, 30, even 50 years ahead as we plan strategy. We need to continue to evolve our businesses. Those that can and do will sustain. Those that don’t will simply cease to exist.
How many like to give money away? I don’t mean charitable giving; I mean paying for something and getting absolutely nothing in return. Across the country and around the globe we spend millions each year for electricity that we never use. Called phantom power or vampire power, devices all over our homes and businesses are sucking electricity even when they are “turned off”. In the average home this can account for 5-10% of your electric bill. In businesses the power used at “the plug” can be the third or fourth highest user of electricity in an office behind the HVAC and lighting.
In some cases, this phantom power is used to keep a computer or TV in stand-by mode so that it starts in an instant. Other devices use the power to run clocks. From my kitchen I can see four or five different appliances that have a clock…and they never display exactly the same time! Still other devices use the power to do, well, nothing at all.
One of the gifts my wife gave me for Christmas this year was a Kill-A-Watt. (http://www.p3international.com/products/p4460.html)
The Kill-A-Watt comes in two models. I have the Kill-A-Watt EZ which has some additional features. The basic operation of both models is very easy. They plug into any wall outlet, then the device or devices that you want to measure plug into the Kill-A-Watt. It then measures the amount of electricity being consumed and projects the usage over a day, week, month and year. The longer it measures the usage the more accurate the projections become.
On the EZ model, you can also enter the rate your electric company charges for electricity. The EZ can then calculate costs of the electricity over the same time periods. Now, entering the rate sounds easier than it might actually be. After receiving the EZ, I grabbed our latest electric bill and was amazed to find out the actual rate appears nowhere on the bill. In fact, from the invoice itself, it is impossible to verify the accuracy of the charges.
Not to be deterred, I called our local electric company. After waiting on hold for a few minutes, I was greeted by a very friendly customer service clerk, who told me that the rates were “too complicated to describe over the phone” and instead, directed me to their website.
I jumped on the web, browsed to their site and proceeded to try to decipher the THIRTY SIX pages of disclosures and descriptions of how my electricity is charged. In the mean time, my wife called back to the electric company and got a supervisor on the phone. He was very nice and tried for 30 minutes to explain the calculations. He was especially proud of the fact that they had not raised residential rates in over 10 years. While, I guess that is true of the base service rates, but did not take into consideration the rider for Demand Management Programs (which I take to be the utility’s costs to promote residential electric efficiency, really, we have to pay extra for that?), nor does it include the Fuel Cost rider that is now being assessed, although it was calculated when oil was almost $150 a barrel rather than the $40 some a barrel today; nor does it include the rider for Environmental Compliance, which means we get to pay the utility for doing something they should have been doing all along, and oh, by the way, we also pay for the Green Power Initiative (and I am very happy to do so) which means our power comes from 100% renewable sources, so we pay for them to clean up from the coal and we don’t even use coal power (don’t even get me started on “clean” coal).
But, I digress. I was really writing about the Kill-A-Watt and phantom power. I have been surprised, not only by the amount of phantom power we use, but how easy it has been to begin to make changes. Admittedly they are small changes, but old habits are hard to break, and old lessons are hard to relearn. For years, we were taught to leave our computers on…all the time. How many hours a day does it sit idle? 15? 20? More? Our televisions are in standby when not in use, still consuming power.
Changing these behaviors and relearning these lessons in our offices can have even more of an impact. Walk through your office after hours some time. Count the number of office lights, conference room lights, and hallway lights still burning bright. Then look at how many computers are still turned on, monitors either in full display or with screensavers running. How many other devices are plugged in and using power? It could run into the thousands of dollars a year in utility costs for even an average sized office. Simply turning off the computers at the power strip could make a significant impact to the bottom line!
It took just 25 seconds Saturday. 25 seconds and the RCA Dome, former home of the Indianapolis Colts, was a pile of rubble. As the dust cloud floated west and settled on downtown Indianapolis, the memories of 24 years came flooding back; the first basketball game played in the dome between the NBA All-stars and the Olympic Team; Bobby Knight and the IU players spelling out “THANKS!” on the floor after an NCAA tournament practice; the Rolling Stones and Bruce Springsteen concerts; my oldest son playing 3 on 3 basketball on the turf of the football field; and of course, the Colts. Thousands suffered through the “lean years” of the Dolts when the stadium as rarely, if ever, sold out. And, who could forget the greatest game ever played in the dome, when our Colts rallied from a huge deficit to defeat the Patriots and head to the Super Bowl…and the victory celebration that followed in February as the team brought home the Lombardi Trophy?
Across the street is Lucas Oil Stadium, the new home of the Colts. It is a great place to watch a game and I am sure it will soon be filled with memories just as the dome had been. Just a few blocks west sits Victory Field the home of the Indianapolis Indians since 1996, and a great place to watch baseball. Their previous home, Bush Stadium, sits vacant, neglected and overgrown. A couple of blocks in the other direction is Conseco Fieldhouse where the Indiana Pacers have played since 2001. Their former home, Market Square Arena, has been paved over for a parking lot.
Sunday’s news carried, not only coverage of the implosion of the RCA Dome, but the announcement by IUPUI that they planned to tear down the Indianapolis Tennis Center and the Carroll Track & Field Stadium.
According to the IRS, the depreciation for commercial buildings can be taken over 39 years. Thirty-nine years, yet the oldest of these facilities only made it 27 years. When did our stadiums become disposable? I find it ironic, that at least in the case of Conseco, Lucas Oil and Victory Field, that the new stadiums have been designed to look like stadiums of the past. They have all the modern amenities but they are designed to give the visitor a sense that they are entering a bygone era.
Yes, I will be in my seat in Lucas Oil on Sunday as the Colts take on the Titans (don’t rest ’em Tony!); will watch our young Pacers battle in Conseco; and, this summer, I will take in a game or two at Victory Field but when I really want to connect with history, and feel like I am a part of the game I will take in a Bulldogs game at Hinkle Fieldhouse and live what Indiana basketball has been for 80 years.
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Insights is the weekly, thought-provoking newsletter from Jeffrey S. Ton.
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