The Money Files

“When I started early in 2008, project managers were one of the groups I had to battle with,” said Holly Knight, Head of Sustainability at the Olympic Delivery Authority (ODA), at an APM Learning Legacy event in London yesterday.

The overarching principle of the London Olympics has been to design with legacy in mind, and the desire was that the legacy was sustainable. The ODA is the government body responsible for the work in East London, effectively building the stage for a handover to LOCOG, the organising committee for the games. Think of LOCOG as an events company, Holly said, that would in turn hand over the location to the London Legacy Development Corporation to run the Olympic Park in the long term.

“It was really important that when we started we had some strong leadership,” Holly explained. The team set high level strategic commitments for the programme, including 6 priority themes:

• Health and Safety
• Sustainability
• Equality
• Employment and Skills
• Legacy
• Design and accessibility.

Each team in charge of a priority theme produced their own practical programme strategy, “a set of targets about how we were going to achieve it,” Holly added.

The sustainability team took principles like One Planet living and used those as a basis for their targets and to set clear guidelines for what they expected from contractors. These were then used in the contract negotiations.

The team also carried out what we would consider traditional stakeholder mapping, but called the resulting links “strategic alliances” (which is a term I like far more). “It was important that we did have relationships with groups like Constructing Excellence and the Construction Products Association,” Holly said, explaining that their stakeholder map was wide ranging and inclusive of industry bodies as well as those contractor groups directly linked to the work on site.

Contracting the green way

The Olympic programme had around £70bn worth of contracts across 50,000 contractual agreements. That’s a lot of paperwork, and a lot of contractors to get around spreading the word about the sustainability targets. The team needed to work on and with the supply chain, so they wanted to get sustainability into these contracts. “Procurement became one of our best friends,” Holly said. “The value of getting the procurement right was massive.”

As a result, the sustainability team was fully involved in the contract negotiations. The selection criteria during the tendering stage included about 70% of measures for ‘traditional’ contract criteria and 30% on the priority themes, including sustainability. This meant that the priority themes and sustainability targets could be discussed with contractors in the very early stages and written in to contracts as appropriate.

“But quite often when people turned up on site and we showed them what they had signed up for they didn’t realise,” Holly said. This was an issue when the sales and contracting team were a different group to the workers who arrived at the Park. As a result, there was a skills and knowledge gap.

Holly explained that the sustainability team carried out a fair amount of “hand holding”. They ran workshops and delivered training so that the principal contractors knew what was expected and could cascade this information to the sub-contractors.

The results

The sustainability team had 20 targets and sub-targets, and hit them all except for the sub-target around renewable energy. They smashed some, including the target for materials delivered by rail and water. They came in almost 30% higher than planned on that one.

The velodrome is considered the most sustainable building on the park. The original steel frame roof structure was replaced with a cable net roof, which would not have been possible without excellent collaboration on the project between contractor groups. There were huge cost and health and safety benefits to making the change as well, so sustainability really does pay.

Building sustainable structures also has a lower maintenance and electricity cost: for example, the swimming pool has removable ‘wings’. The venue needs 17,500 seats for the Olympics but other events only need around 3,000 – even events like the World Championships. So to keep the maintenance, heating and electricity costs down, the temporary stands will be removed after the event and the venue goes back to being a smaller space. A biomass boiler on the site reduces the carbon footprint but 30%.

Overall, the programme has included some great leaps in sustainable design, and by planning this from the design phase of the individual projects, the London Olympics really can claim to be the greenest games yet.

Photo credit: APM on Flickr

There’s a lot around at the moment about green project management.  It’s a good thing: we could all benefit from living and working in a more sustainable way.  However, selling that to senior management can be difficult, so is there a financial benefit to being green?  I spoke to environmental and management experts Rich Maltzman and Dave Shirley, authors of Green Project Management, which is published this month.

Rich, Dave, how do green project management practices help businesses from costing the earth?

To best answer that question, we tried to first answer the question, “what are green project management practices”?  Green project management is not a new discipline, but rather the intertwining (or intersection if you will) of green business practices with project management discipline.  By nature, project managers manage limited resources,cost and time, and it also includes the earth’s limited resources, fossil fuels, water, and other things we take from the earth.  By viewing their project through an environmental lens, making sure that resources like energy are conserved throughout a project, project managers can conserve those scarce natural resources and reduce what we take from the earth.

Right, so through taking an environmentally-aware approach to projects we can make a contribution to being green.  Convincing others that this is worthwhile goes further than just ‘doing the right thing’.  Is there a money saving benefit to being green?  How does it manifest itself?

The short answer is yes there is a benefit to being green and it manifests itself as cash!  One only has to look to Interface Global (worldwide leader in modular carpets) and Ray Anderson, its founder, who we consider one of the green business gurus.  His aim is to be sustainable in all its dimensions by 2020.  According to our research, “the company started with projects focused on waste reduction, considering the reuse of everything from carpet scraps to industrial effluent, which immediately led to savings—more than $60 million in the first three years.”  You can read more about Interface Global here.

Wow!  That’s a lot of money to be saving.  We should be including green savings in all our project business cases.  What’s your top tip for project managers who want to employ green project management practices on their next piece of work?  Where do you start?

Rich says:

Let me answer both questions at once. Start with the Environmental Management Plan and/or the environmental policy statements of the enterprise.  Like a project manager draws power from their project charter, the PM who is trying to increase greenality on their project must draw power from the company’s mission to reduce its carbon footprint, reduce waste, and whatever other aspects of corporate social responsibility fit into your piece of work.
So the tip is to connect your project’s charter and its resulting work statements to the Environmental Management Plan of the company, which should be conveying the rationale that to excel in this area is actually a benefit to the company’s bottom line.

And, if your company is lacking in that area – become its champion!  After all, projects are all about change.  Be that change.

Dave says:

Well, I’ll be a little more expedient (or should I say a lot more).   You start with our book, Green Project Management; it will give you insights into all of the things Rich has said above, as well as an understanding of your stakeholder’s green drivers, green project fundamentals, lean and green,  takes a look at the companies we believe are “At the Top of Their Game” and more.  It is a quick read, but will be the project manager’s starting point to affect the greening of their “next piece of work”.

Rich, you mentioned the word greenality.  What’s that?

Greenality is an attribute.  It’s a less clumsy way of saying that an organisation is “greening up”.  In fact, if you look around the literature, and the web, you’ll notice a lot of quotation marks around the word green or greening. To us, that says that people are not comfortable using the actual words.  That implies there is a missing word.  Otherwise, why the “quotation”  “marks”?

Good point!  So where did the word greenality come from?

We created the word by smashing two known words – which need no quotation marks – together.  Those two words are green and quality.  Quality, as we know, is built in, not bolted on, to our projects.  It’s in the fabric of what we do, always aimed at meeting or exceeding customer requirements.  The green we understand it is focused on sustainability, the environment, on reducing waste.

So by putting the words together we have a definition for Greenality which goes something like this:

Greenality (project): The degree to which an organization has considered environmental and sustainability factors that affect its projects during the entire project lifecycle and beyond. It contains two important aspects: (1) minimizing the environmental impacts of projects (this includes efforts to simply run the project more efficiently and effectively) and (2) minimizing environmental impacts of the product of the project. Like quality, greenality must be designed-in, not inspected-in.
Greenality (general): The degree to which a set of inherent characteristics fulfills environmental and sustainability requirements. Like quality, greenality must be designed-in, not inspected-in.

This definition is actually up for editing at a non-profit site called Open4Definition.org.  You can join a project to help refine this definition on the site.

We do not yet have a scale for greenality. It is a word quite literally in its infancy. However we have seen efforts to do this on a broader scale for enterprises with examples such as the Pacific Sustainability Index, where measurements are made of the companies’ greenality by observation of their public presence on the web.  Another example is ClimateCounts.org.  We need to take this initiative which is applied to business in general, and ‘projectize’ it.  We are glad to collaborate with others to do just that.

So there is still some work to do embedding greenality as a concept and a word in our consciousness.  How sustainable is this trend?  Businesses may have high level statements on reducing their carbon footprint, but that has not filtered down to general project management practices yet.

We certainly hope that this is not a trend, but even if it is, we go back to the idea that sustainability makes good business sense even if there is not a groundswell for environmental action and responsibility.  And project managers should – by their nature (excuse the pun) – be all about reducing goldplating, reducing waste, and effective use of resources.  So we maintain that the sustainability of sustainability is sustainably sustainable

[Laughs.]  OK, thanks, guys!

More about my interviewees:

Rich Maltzman and Dave Shirley are the authors of Green Project Management and the blog Earth PM.

This video looks at the impacts of the recession on budgets and covers the benefits of home working as well as the green elements of saving money.  There's a white paper here (.pdf) with more information.