Business leaders are increasingly convinced sustainable business practices are key strategies – not just another feel-good fad.
Story by Rick Berg
“Environmental concerns should not be just another management fad. They are a strategic survival imperative.” – From The Green Baron by Steven C. Dunn and Richard R. Young
When University of Wisconsin Oshkosh sustainability professor Steve Dunn and his co-author wrote those words in 2007, the whole concept of “green” business management was still tinged with a kind of “tree hugger” dismissiveness in some quarters. Dunn had just begun teaching sustainability at UW Oshkosh as part of his supply chain management curriculum at the UW Oshkosh College of Business Administration. He and Paul Linzmeyer, formerly CEO of Bay Towel in Green Bay and now sustainability leader at Appleton-based health system ThedaCare, were about to launch a sustainability consulting business called ISO Inc.
“It’s easy to think when we’re talking about sustainability that it’s a touchy-feely kind of thing,” Dunn said at the time of ISO’s launch. “But we have a business model that shows exactly how your corporate goals tie into that. As a business leader, of course, you’re focused on the dollars, but you also have to know that in order to get there in today’s business climate, you need to increase the scope of what’s on your business dashboard to see where you’re going. You need a gauge instead of an idiot light that goes off when it’s too late.”
The business world didn’t exactly beat a well-worn path to ISO’s door, but Dunn and Linzmeyer were obviously on to something. A handful of northeast Wisconsin organizations like Affinity Health System, Goodwill Industries and Faith Technologies were clients and were all-in on sustainable business practices. Before long, Dunn’s toe-in-the-water approach of adding sustainability to the supply chain management curriculum had blossomed into a full-blown minor in sustainable management from UW Oshkosh’s business school – one of the first universities in the country to take that focus.
The stakes ramped up considerably in 2012 when UW Oshkosh and four other UW campuses (UW-Stout in Menomonie, UW-Green Bay, UW-Parkside near Kenosha and UW-Superior) launched a collaborative master’s degree in sustainability management, with Dunn one of the primary faculty members.
One of the first participants in Dunn’s sustainability management program was Iqbal Mian, a Bangladeshi native who had also been an intern with ISO Inc. Today, Mian is the sustainability team leader at Ministry Health Care, which acquired Affinity Health System in 2012.
At Ministry, Mian coordinates a system-wide environmental management practice under the direction of Gary Kusnierz, Ministry’s vice president of performance excellence. Mian also oversees energy benchmarking for 15 hospitals and 46 clinics and works with teams to identify and execute conservation measures.
A step beyond standards
Among the first projects Mian and Kusnierz undertook was the construction of the new Fremont Tower at St. Elizabeth Hospital in Appleton, which opened earlier this year. Kusnierz had already overseen the construction of a new emergency room at St. Elizabeth, which repurposed existing facilities and significantly reduced costs. Kusnierz received HCD 10 honors from Healthcare Design Magazine for his work on this emergency room transformation.
He and Mian were determined to make Fremont Towers the gold standard in sustainable business and construction practices. Fremont Towers was constructed to provide 38 percent water savings over a traditional building of its size and occupancy, as well as a nearly 17 percent energy savings over American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) standards. Over 10 percent of the site’s material cost is composed of pre- and post-consumer recycled content. Building materials such as concrete, asphalt, steel, ceiling tiles and carpet contribute towards Leadership in Energy and Environmental Design, or LEED certification. Regional materials do not exceed a 500-mile radius from the site.
“The value is about cost avoidance,” Kusnierz said. “If you can reduce capital costs, energy costs and waste reduction costs, you are contributing to the bottom line.”
“The idea of process improvement is to challenge the status quo,” Mian said. “If we end up saying we are doing this because we’ve always done it this way, we need to change.”
The Fremont Towers project was designed to exceed ASHRAE and LEED standards.
“That was the challenge Gary (Kusnierz) posed to us,” Mian said.
Lean and green
Lean business practices are already well-establish in the manufacturing and health care sectors. Dunn said sustainability is merely an extension of the lean philosophy. Lean, he said, is about reducing the cost of providing products and services. Green is about the same thing – reducing the energy and waste costs needed to produce those products and services.
Kusnierz, a lean-certified, Six Sigma black belt professional himself, agrees.
“It’s just a better way to do business,” Kusnierz said. “You’re not adding people, you’re not adding construction costs, you’re not adding energy costs. People are empowered to make decisions that make the most sense. When we repurposed the St. Elizabeth emergency room, we reduced the footprint by 3,000 square feet. Applying lean principles drives safety and efficiency, and values a team approach.”
The Affinity project achieved LEED Gold certification because of the addition of a vegetative roof, as well as storm water management and cooling potential. The focus on energy conservation at St. Elizabeth led to a new central mechanical plant and the investigation of solar panels to be used for both heating water and to take electrical load off grid. With solar technology improving, return on investment is moving into a single-digit number of years, making solar a potential solution for Affinity.
Long-term vs. short-term
Dunn, who worked at Labatt Food Services and The H. J. Heinz Company before his tenure at UW Oshkosh, said he understands why sustainability and environmental issues are so perplexing to business leaders.
“Here’s the challenge in a nutshell,” Dunn said. “The issues businesses face today tend to be long-term in nature, and that might seem like an eternity to a business person. We tend as business people to react to short-term problems and we want exact numbers to rely on. Those numbers aren’t necessarily there for sustainability. So, it’s a big challenge. But what’s getting better is that businesses are starting to be able to put some kind of cost to this. They’re starting to ask the questions about ‘why not start building sustainability costs and benefits into their location, product development and supply chain decisions.’”
Kusnierz agrees, noting that organizations like Ministry Health and its construction partner base all of their strategic decisions not only on their own practices, but also on those of their supply chain partners.
“We’re all looking for partners who have a similar culture and philosophy,” Kusnierz said.
Putting environmental education into business curricula is a major step forward, Dunn said.
“As we’ve done this at Oshkosh, we’ve seen how the issues overlap between business and science,” Dunn said. “There’s an element of risk management to this that our insurance department began to see. Environmental risk and social risk is huge. We also see how it impacts manufacturing and health care.
“The words ‘environment’ and ‘sustainable’ still have political baggage attached to them, but it really is a strategic business issue and savvy business leaders are seeing that now,” said Dunn.
Rick Berg is a freelance editor and writer based in Green Bay.