Want More Smart Buildings? Amp Up the Collaboration
“Smart technologies are defined by their interconnectedness,” points out a recent ACEEE report on smart building markets. The companies that buy and sell them, however, are defined by their disconnectedness.
Intelligent buildings have been a concept for decades (a quick search turns up a research report from 1991). Sustainability thinkers have been advocating them for years, and they’re a hot topic in building trade publications. So why is it that the brightest thing about most buildings remains their always-on lights?
There are many answers to that question: misaligned incentives, lack of accountability for energy costs, the fact that some professionals in the building maintenance sector see standardization and automation as threats to their livelihoods. Those are all topics of discussion, if not sufficient action. But there’s another core issue that’s been largely overlooked: every actor in the smart buildings universe is an island. Here are some of the culprits:
- Corporations looking to control their energy destiny and improve sustainability often aren’t structured to drive action across the enterprise. Energy-related decision making is decentralized, and local purchasers typically lack the time and expertise needed to make sense of an onslaught of new technologies.
- Emerging companies in smart building and energy technologies burn through precious capital waiting out the resultant long purchasing cycles and building large sales and business development teams to reach the many levels of decision makers.
- These teams all target the same commercial and industrial customers with siloed solutions.
- Established energy service and building technology conglomerates know customers want integrated, comprehensive solutions, but they’re structured to market individual portfolio company products and often hesitate to cross organizational boundaries.
One way to break down these boundaries is to adopt a collaborative business model akin to those sustainability leaders have used to advance fair trade and resource conservation.
What Does Collaboration Look Like?
A shared services organization that is customer focused and solutions oriented, and that receives active support from commercial customers seeking integrated solutions and willing to provide needed data, could be the answer. This model would enable emerging companies to go to market more efficiently and could incorporate a vetting component that makes technology capabilities and comparisons transparent for corporate buyers.
We can take a cue from the food world, where various forms of pre-competitive collaboration are increasingly common. Industry organizations in coffee, chocolate, seafood and other sectors bring together key players in the supply chain – importers, processors and retailers, say – to support projects that ensure a sustainable, high-quality supply chain that benefits all participants. (See “It’s all hands on deck to save seafood supply chains” for a few examples.) Smart building owners and vendors can achieve similar results by working together as an ecosystem.
Many of the products and solutions that smart building technology companies offer are complementary. These companies spend a considerable amount of time and money on marketing and sales, going after the same customers at the same companies. A highly skilled and trusted shared services organization that marketed members’ products in a fair way would get technologies and services to market more efficiently.
It would also address barriers that prevent large corporations from moving forward on energy initiatives: complexity, a lack of familiarity with the technology, and trust. A shared services organization could develop a checklist of everything in a building that uses energy or water; technologies and practices that will make building systems maximally efficient; and specification, purchasing and use guidelines.
In concert with this planning and education tool, the organization could present integrated solutions that meet an enterprise customer’s particular financial, operational, and sustainability goals – for example, a suite of lighting, HVAC optimization, and demand management technologies that shrink the electric load; distributed renewable energy resources that reduce each facility’s dependence on the electric grid along with its carbon footprint; and a control dashboard that orchestrates the whole thing while providing business intelligence.
Who should lead this effort, or something like it? The utility industry is ideally positioned to take this on (and I say this as a former utility executive): they run the backbone energy systems and they have relationships with technology providers and commercial users. Enterprises could also lead by actively seeking integrated solutions, encouraging collaboration among technology companies and service providers, and materially supporting a collaborative approach.
Think Forward, not Backward
It’s easy to come up with reasons a collaborative approach wouldn’t work, but they’re all based on a status quo mindset positing that something can’t happen because it hasn’t already. The model could take off if we start with an initial commitment to not waste time creating elaborate contractual structures focused on “what if it doesn’t work?” We can find ways to maintain each participant’s intellectual property. If we don’t bog it down from the beginning with nuclear disarmament–level negotiations, we can create a collaborative structure that benefits emerging technology companies, energy conglomerates, corporate enterprises, and the world at large.
A collaborative effort can scale faster, deploy technology faster, and drive innovation into the DNA of an organization faster. If we are willing to work together, we can create the intelligent buildings we’ve all been seeking, but somehow always remain in the future. We just have to care enough to invest the effort.
Bert Valdman is a board member and former CEO of Optimum Energy, a Seattle-based software and engineering firm that optimizes HVAC systems. He was senior vice president of strategy at Edison International and chief operating officer of Puget Sound Energy.