Often, the resistance by chief financial officers and other upper management executives can be a critical barrier to implementing energy efficiency system improvement projects. The following outline illustrates the kind of information that needs to be presented to management to successfully gain approval for such a project.

Under most circumstances, it would be appropriate to seek project approval by making a formal presentation to key management staff. It would be to the presenter’s advantage to have the principal managers of all potentially affected activities in attendance during the presentation. In deciding who should be invited, consideration should be given to impact on budgets as well as on operations. It’s most important that all interested parties be fully informed before the meeting, so they can be prepared to participate. If your project gets approved, funding may have to come from other activities; those managers must be fully involved before your presentation, if you are to avoid having them oppose your project.

Besides gaining the cooperation of internal management, it might be wise to gain the support of outside parties, who might lend additional credibility to your proposal. For example, you might want to use a report from an independent professional, or recommendations from your utility or energy services company. For compressed air projects, it would certainly be helpful to make reference to materials produced or endorsed by the Compressed Air Challenge.

Your presentation to management must be tailored to the scope of the project and the management style of your leadership, and must be keyed to achieving a decision. The best idea is to make the individual in your management scheme who can ultimately approve the project the center focus of your presentation.

Your presentation should present all of the necessary information as concisely as possible. Don’t waste valuable time with unimportant details. The more irrelevant details you furnish, the greater the likelihood that someone will start to nit-pick. This may well divert the decision-maker’s attention from the true issues at hand.

The following outline suggests a format for presenting your compressed air or energy efficiency project to management.

Keys to Selling the Project

State the Purpose of the Presentation

You want everyone attending your presentation to focus on the problem you will present, knowing that a decision will have to be made. If attendees think they’re there for an information briefing, they may easily miss some of the points that will critically affect the decision.

State the Problem to Be Corrected

What are the existing conditions that make it important that the project be considered? What costs are involved that can be reduced? How do existing conditions affect production, staffing, maintenance, and the bottom line?

Describe the Scope of the Project

As briefly as possible and using a minimum of detail, describe what the project will consist of in terms of equipment, labor, time and cost to implement. This part of the presentation will help the decision-maker and other key players get a fast understanding of what you want to accomplish and how.

State the Benefits

Using simple data summaries and graphical displays, explain how the project will cure the problems you earlier laid out in discussing existing conditions and improvements to the bottom line. Emphasize reducing operating and production costs, realizing that one of the most important parameters is the cost per unit of production. In addition to the benefits derived from energy conservation, you should illustrate other benefits, such as pressure stabilization, improving moisture control and air quality, the side benefit of turning off machines that creates additional back-up capacity, and reductions in downtime and reduction of product waste.

Clearly State the Implementation Cost

Accurately state what it will cost to perform the project. You must examine all of the direct costs involved, but also the indirect costs. Will there be additional costs for down time and start-up? Will you need temporary compressed air capability? Will there be any interruption in production? You must be ready to answer all of these questions.

Explain Any Effect the Project Will Have on Operations

While this project is going on, will there be any adverse effect on production or other operations? If so, how will it be accommodated? Has the resultant cost of any such impact been included in the estimate of the cost of implementation?

Present the Effect on the Budget

Any significant new project will effect the budgeting process. If the project is being sought for the current budget year, the effect is likely to be both large and widespread, having an effect on more than just one part of the business. If the project is for a future budget year, the planning may be simplified, but the effect will always be felt at various activities in the business. Unless a windfall of new revenue exists to fund the project, funding will have to come from existing budget items that will have to be reduced. Advance coordination with the likely targets of these budget transfers can help in getting approval. It may be necessary to clearly demonstrate a long-term benefit to be derived for the overall business to convince a senior manager that he or she can accept a short-term loss of funds to support the project.

Much care should go into analyzing the Return on Investment (ROI); that is, the time over which the savings to be realized by the project equal the cost of implementing it. The shorter the ROI, the more likely the project will be approved. This part of the presentation may be a good time to compare graphically costs against time and present the expected returns to clearly illustrate the ROI. It’s also a good time to restate any reduction in cost per unit of production to be realized under the project.

A major barrier to project approval is often a lack of management awareness of real operational costs. Collection/estimation of these costs, and simple graphical displays in your presentation can help highlight the need for the project.

Provide a Coordinated Implementing Plan

The best plan, implemented poorly, can be a total failure. Coordination between and among departments, realistic work schedules, accommodation for the unexpected, clearly stated, achievable milestones, and the assignment of a fully accountable project manager are essential to making the project a success. "What if" brainstorming should always be included in the planning. Under best conditions all of the affected activities should be in agreement on the plan before the decision briefing is presented. If such agreement is not possible in advance, the plan should include an early milestone related to achieving that level of agreed-to coordination. The timing for the project and each of the milestones are critical to the decision process. The latest date a decision can be useful must be made clear. Normally, this time estimate should allow management some time to consider options and alternatives. However, it must be made clear that the reason the project is being sought is because a decision is needed, and when it is needed.

Summarize the Project and Ask for a Decision

Close the sale. Summarize the need for the project and timing, review the cost/benefit analysis, lead the thought process to conclude the need for a decision, and ask that the decision be made.
Provide a minimum of complicated details in the briefing itself. It’s a good idea to have handy as much hard data detail as possible, in case it’s requested. Spread sheets and reports, process studies, cost data and analysis are all valuable back-up to your presentation. However, avoid using these materials in the presentation itself to avoid confusion. Any data that you provide should be in a prepared format, and it should not be cluttered with ancillary, irrelevant data that may mislead or divert thinking. You should always remember that the two most critical parameters in play during your presentation are time and focus. Time is critical because the longer it takes to "make your case," the less likely you are to get the decision you want. Focus is important because you don’t want the decision maker to be distracted from the very specific goal of implementing your project.

The most important factor in gaining the approval you seek, is in coordinating in advance with all of the affected managers and key players within your organization. If you can get them to approve the concept informally in advance of your presentation to senior management, a favorable decision will be much more easily achieved. In most cases, it will be very difficult to get unanimous coordinated approval from all the players. And, remember that because of the competition for funding, one or more of the key players will suffer some form of budget impact.

Adapted from the Compressed Air Challenge, originally printed in the Winter 2003 edition of Energy Matters, published by the U.S. Department of Energy. For more information, visit www.oit.doe.gov.