Innovation has almost become an obsession of our time. It is commonly associated with new technologies. Gavin Graveson, Neil Hargreaves and Tim Rotheray show us how, in a constantly changing world, innovation starts with people and is now more than ever about collaboration.
Gavin Graveson Executive Vice President at Veolia in the United Kingdom
“For us, it’s not only about making money in the short term, but it’s about building a long-term relationship in a changing world.” Gavin Graveson
What does innovation mean to you?
Neil Hargreaves: Innovation is about leading change, about doing things differently and challenging the status quo. It not only involves new product development, but finding solutions for our customers and stakeholders.
<:p> Gavin Graveson: Innovation is essential to achieving success in an organization. And because the world is rapidly changing, our clients want and demand innovation. These are the people we work with every day and we have an obligation to think about what they want and help them move forward. Innovation is about delivering change, not just thinking about it.
Tim Rotheray: Innovation is about finding the same or a better outcome, a more efficient way, and being cost- and environmentally efficient.
What approach are you taking to innovation in the United Kingdom at the moment?
G. G.: Innovation can be delivered at different levels. At Veolia, a lot starts with our Touch Programme. We meet clients regularly to discuss what market pressure and cost problems they are having. We analyze their needs to create a mix between short-term and long-term innovation. Long-term innovation is slightly more difficult because it is prediction. Innovation for us is about the three thirds: the first third is where we think the market is headed, the second is about legislation that is changing and the third is about our customers’ feedback. We take a mix of those and try to speculate on the right move.
N. H.: Generally speaking, innovation starts with people. Knauf is a very customer-centric organization. A significant proportion of our innovations start by listening to our customers to understand their issues, concerns and ultimately how we can support them to be more profitable. However, not all our innovations are driven by our customers. Sometimes it is a question of circumstances and the way the people in our organization challenge the status quo to do a better job and create a better world.
T. R.: When it comes to the energy sector, we are moving away from the old centralized energy system – where power was centrally made and then delivered to customers who simply consumed energy when they needed it – to a world where energy customers generate their own energy and even provide energy security services to the power grid. Decentralized energy is not about scale, it represents greater involvement of the energy customer in the system. So rather than just paying for energy, the energy customer is paid to help keep the system secure and running smoothly.
Neil Hargreaves Managing Director at Knauf Insulation Northern Europe
“Innovation is about leading change, about doing things differently and challenging the status quo.” Neil Hargreaves
Where are you headed next?
G. G.: There are many financial and political pressures. Financial pressure is about creating solutions that save money for our clients and make them more profitable. That is about zero waste to landfill, lower cost treatment of hazardous waste.... Political pressure on the other hand is all about carbon reduction, climate change and clean air. In the United Kingdom, as Veolia, we are carbon neutral – we not only understand that, but we also try to provide this understanding to our clients in district heating, direct energy and low energy usage. At the start of this year, we took over a contract to manage waste and recycling collections in London’s Square Mile. We will be implementing a fully-electric fleet of refuse collection vehicles. It is a first in the UK. We not only are a solution provider for them but also a partner in the long run.
T. R.: I think two really big things are happening in the energy sector. The first is the electrification of transport. We are already seeing electric delivery vehicles and electric-assisted bikes in London, and we expect this to continue with cars. This means that transport will become part of the electricity system with a huge impact on its size and how it is managed. Second, heat represents about 50% of energy demand and one third of greenhouse gas emissions and the increasing urgency of climate change means the next challenge will be decarbonizing heating.
How can we create value and change through innovation?
G. G.: It’s a matter of direct and constant collaboration with our customers. They come to see us with a problem and we help find the solution in order to restore their productivity, help them perform better and sometimes overcome a crucial crisis. Innovation is not a view of mind. It’s directly linked to their daily business. With some of our major customers, we have embedded some Veolia guys within their own team in head offices. We have a kind of help desk that they can come and see to share whatever problem and we’ll find a solution. We try also to advise them, inform them on what is coming in terms of legislation… We treat every customer uniquely. For us, it’s not only about making money in the short term, but it’s about building a long-term relationship in a changing world.
N. H.: We must stay close to our customers, ask the right questions and understand what we can do to help them become more profitable and more sustainable in the medium and long term. Internally, it also involves creating the right resource with the toolset to make sure we have the right focus on those projects that will ultimately help us attain our overall strategic goals and our vision, which is to create a better world.
T. R.: Innovation in business, finding a better way to deliver what our customer needs, is going to determine who wins and who loses in energy. Embedding innovation means having a clear focus on what the customer wants. I think the other priority is collaboration. Innovation certainly means looking outside of your team and company to find the best players and establish collaborations with them. The scale of the challenge in carbon is huge. We will only meet it if we collaborate across sectors and learn from others.
Tim Rotheray Director at The Association for Decentralised Energy in the United Kingdom
“Innovation in business, finding a better way to deliver what our customer needs, is going to determine who wins and who loses in energy.”
How can we foster an innovative culture within the largest organizations?
G. G.: We are a large organization, but we will not be large forever unless we continually respond to the market. We have a number of resources in the United Kingdom and throughout the Group to make sure our people are constantly listening to our clients and market, and move fast. We take risks and we sometimes accept to be ahead of the market or the policy to be prepared when the environmental legislation arrives. This was the case with our facility in Rainham where we recycle plastic into food-grade polymers. It took us three years to get it right and for the legislation to push and the market to accept the integration of recycled plastic into food packaging. It was a three-year learning curve, but now it’s a success.
N. H.: At Knauf Insulation, we spend a lot of time communicating to our people to make sure our strategy is effectively disseminated. So, everybody from the top of the organization all the way down to the factories feels connected to the vision and understands the contribution they are making. We have a wide range of communication channels: letters, email, video content, the website and a mobile application. Of course, we value the power of face-to-face communication too. We have regular conferences and team meetings to make sure communication penetrates throughout the organization. Secondly, we have a global set of values. One of Knauf’s core values is entrepreneurship. The Knauf family has grown from a small German organization into a ten-billion-euro global enterprise. That growth has been driven by a customer-centric and entrepreneurial approach.
What role can citizens play in the energy debate?
T. R.: Energy consumers can contribute to the smooth running of networks, both in power and heat networks. Heat networks present a real opportunity, especially for large networks such as hospitals, schools or data centers. Waste heat from these sources can be supplied in those systems. Even homes with solar water panels can supply heat into local heat networks. In power, customers provide flexibility through smart charging of electric vehicles and use of domestic storage with solar panels. Industrial customers provide flexibility through smart managing of their processes. All have the ability to provide services back to the system, and they are paid for these services. For a company like Veolia, the ability to navigate the flexibility of the energy system so the customer can receive this benefit without having to deal with the complexity of the regulated system is of absolute importance.
The Association for Decentralised Energy (ADE) is a trade association representing more than 140 interested parties from the industrial, commercial and public sectors. Decentralised energy is energy based at or near the energy user and it has an integral role to play in the creation of a flexible, smart energy future. The ADE works to create a sustainable environment for a range of technologies including combined heat and power, demand side energy services, energy efficiency and heat networks.
In 2017, Knauf and Veolia initiated a partnership that resulted in the construction of a dedicated glass cullet processing facility adjacent to the Knauf manufacturing facility in St Helens. What was the impulse behind this development?*
N. H.: There were some key drivers behind our decision to work together. Previously, we bought glass from a number of suppliers who were operating as intermediaries between glass collectors like Veolia and manufacturers. We discussed with Veolia about developing a different kind of model where Veolia, the glass collector, and Knauf, the glass user, could come together to build a cullet processing facility close to one of our plants in the United Kingdom to deliver a long-term sustainable solution. Our organizations have been discussing several possibilities for cooperation since 2014 at a high level. We visited a number of Veolia facilities across the UK and Veolia came to our location, so we could really understand each other’s business, our mutual cultures and shared values. This stage was very important in building a really good relationship and trust, which are the foundations of this kind of partnership.
The family-owned multinational manufacturer Knauf Insulation is one of the world’s largest manufacturers of insulation products and solutions, with more than 37 manufacturing sites in 15 countries. In the light of climate changes, insulation has become a crucial aspect of the construction sector, fostering to create innovative solutions that make buildings more energy efficient. In 2017, Knauf Insulation and Veolia have initiated a comprehensive partnership enabling to produce mineral glass wool from recycled glass.
Does a partnership that incorporates both innovation and sustainability allow you to ensure better development of your company?
N. H.: Absolutely! We have always wanted to showcase this partnership we’ve developed with Veolia to our customers so they can see the full end-to-end process. Veolia collects the glass from its nationwide network of Material Recovery Facilities for transport to its cullet processing plant that is situated a stone’s throw from our site. This reduces transport costs and the carbon footprint from additional transport. Once the glass cullet is transferred to our production site next door, it is fed into the furnace and melted. Using a higher percentage of recycled glass in the process generates considerable cost and environmental savings. The quality of the glass cullet allows up to 80% content in the final product – which is energy-saving glass mineral wool insulation. I think in terms of a sustainable, circular economy story, you will not find a better example.
Could you name your favourite innovation in the past few years?
T. R. : Recently, I bought an electric car. Before people own an electric car, they talk about range anxiety: will my car run out of electricity? But when you actually own one, you realize that it is genuinely innovative. It gives you exactly what your old car did, transportation from point A to B, but it is silent. Rather than worrying about range or where you are going to fill up, you just plug it in at night. You no longer have to waste time in queues at the gas station. And on cold mornings, the car is warm before you get in because it is pre-heated for you.
N. H.: I do take particular pride in our collaboration with Veolia to build a processing facility adjacent to our production facility. I was personally involved in the delivery of the project along with other key members of our team. I think it is a really fantastic example of how businesses can work together and also how we can deliver a great example of sustainability and circular economy.
G. G.: I will mention two examples involving the full circular economy and using waste to make other products: using glass to make insulation, and turning plastic back into milk bottles.
We’re stopping the waste of natural resources, while saving carbon and recycling. People have been talking about the circular economy, but we’re actually achieving it.