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A new start... a costly start

April 5, 2016

 

This morning as we start a new week, South African's awoke to a very different and more expensive future.  Last Friday saw the introduction of new electricity rates - up by an average of 9.4%; increased lending rates; increased fuel costs and inflation flaring above the target range accepted as critical.

 

It means that we are now facing higher costs just to survive - to keep our businesses and families at the same levels as last Thursday, and the future isn't looking any better today.  The cost of food and basic services are growing at a rate that is unsustainable, and unless businesses start making serious, sustainable and very real changes, the cost of doing business will outstrip our ability to compete.  That will lead to business failure; closure and unemployment on a massive scale - and that in turn will increase costs and consumers will feel even more impacts on a daily basis.

 

So what can we do about this?  Well, firstly we need to understand the problem and then take steps to manage and mitigate the forces that are acting against our businesses (and in our personal lives). In the many years that we have been advising business leaders on ways to minimise and manage their risk, the 'fallback' position generally favoured is to throw money at technology and science in an effort to reduce consumption or improve performance.  In fact, almost 80% of all business managers today believe that by installing the latest technology to reduce water and energy consumption, they can guarantee sustainability.

 

Silly people...!  As we have seen through history, irrespective of the technology that is implemented to change behaviour or improve performance, humans have the ability to out-think technology in their never-ending quest for an 'easier way' of doing things.  So that state of the art lighting system or technologically superior waste handling system may appeal to those with lots of money, but unless the behavior of people involved in the business or the management of those systems is changed, the expense is short-lived and ultimately, wasted.

 

You can realistically save as much as 18% on your energy costs; 27% on water costs and 38% on waste costs right now, by simply managing the problem better.  Collectively, that results in savings that are far below projected cost increases for the next three to five years, and you didn't have to spend a cent!  But many managers bemoan the lack of time or manpower to implement and manage performance and they still choose to waste money on 'instant' solutions, ignoring human nature and our need to skirt-around systems and procedures.  Once behaviour has been changed, technology and systems come-into play to ensure sustainable performance, but 'snake-oil' solutions without changes to the 'hearts and minds' of staff, consumers and guests is pretty pointless.

 

Implementing world-class management systems - not introducing technology or control systems, has proven itself to outperform anything on the market on a sustainable basis.  An EMS addresses everything from your environmental, social and legislative risk through to reductions in consumption of energy, water, chemicals and pesticides and consumables, while minimising and managing waste, but it is almost too simple for the average business owner to understand.  You wouldn't dream of constructing a hotel without firm foundations, so why operate your business without the fundamentals of sustainability in place?

 

There are still those that believe common-sense is a commodity that can be bought, but in truth, it is something you need to work at and establish through the application of tested and proven practice.  Maybe our business schools forgot this page in their lectures?  

 

 

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