The Leadership Lessons Hidden Inside the Net Zero Transition

In this latest episode of the Manufacturing Leaders Podcast, Mark Bracknall welcomes Gareth Kane, Managing Director of Terra Infirma, sustainability consultant, author, and host of the Net Zero Business Podcast, to discuss sustainability leadership, organisational change, and achieving meaningful environmental progress.

The conversation explores Gareth's journey into sustainability and the lessons he has learned from over twenty years of helping businesses implement effective environmental strategies.

Gareth emphasises the critical role leadership plays in delivering successful sustainability initiatives, explaining why organisations must understand their own unique business case for sustainability rather than adopting a one-size-fits-all approach. 

He also discusses the psychology of organisational change and why engaging teams in the process is essential for long-term success.

The episode explores how businesses of all sizes, from major organisations to manufacturing SMEs, are adopting innovative approaches to sustainability while creating commercial value.

This is an episode you do not want to miss!

You can connect with Gareth on LinkedIn here.

Please like and subscribe - it genuinely helps grow the show and, in turn, helps push the industry forward.

Theo James is a Manufacturing & Engineering Recruiter based in the North East, helping Manufacturing and Engineering firms grow across the UK. 

If you’d like more information about Theo James, feel free to get in touch with the team or Mark anytime.

You can call us on 0191 511 1298. 

Transcript

Welcome And What To Expect

SPEAKER_01 0:00

Hello and welcome to an episode of the Manufacturing News Podcast. It's with me, Mark Bracknell, my director of Theo James Recruitment. Today we're welcome on Gareth Kane, the MD of Terra Inferma. Gareth is a sustainability and net zero expert, ex-university lecturer, and someone who now goes into lots of different businesses, including manufacturing and engineering firms, to talk about sustainability. Um, what I loved about this episode, now I've done quite a few episodes now on the topic of net zero and sustainability. This was, yes, we talked about specific changes in your business and changes you can make tomorrow. And this is definitely an episode where you're going to take a lot of that away. However, at the core of this episode, it was all about all about leadership and transformational change. What Gareth has realized during his research and working with companies is that change has to come from the top. So he works with senior leaders, senior leaders within businesses to make sure that change happens. Something we talked about in a bit of a snippet of the episode was actually the importance of understanding why sustainability or any form of change like that in your business is important. And that will be different for each and every business. It's unique and authentic to you. And he goes for an exercise which is really crucial to do to make sure you as a business understand what that is before you even start to make any change. So it was a really fascinating, really interesting episode, which you're going to take a lot away. I certainly did. So please sit back and enjoy the episode. As ever, please do me the honor of clicking that like and subscribe to help grow the show. Thank you very much. I hope you enjoy the episode. A massive warm welcome today to Gareth Kane, the MD of Terror and Ferma, and also fellow podcast host of the The Net Zero Business Podcast. So, how are we doing, Gareth? Welcome to the show.

SPEAKER_00 1:48

I'm doing great. Thanks very much for inviting me. I'm looking forward to our discussion today.

SPEAKER_01 1:52

Me

Leadership Drives Net Zero Decisions

SPEAKER_01 1:53

too. Absolutely. And loads to get into. But first question is the same question I see everyone, which is what does it mean to you to be a leader?

SPEAKER_00 2:01

Well, in my field of work, sustainability, I always say that leadership is the difference between the best and the rest. And the reason why is the decisions required to hit a target like net zero by 20 whenever, or you know, cutting your carbon footprint in half or more are absolutely huge. And they can't be made at the middle management level, and they certainly can't be made at the sort of volunteer sustainability champion level where a lot of people will try and make change happen. And so much so that in 2010 I realized that companies were struggling trying to do it at a middle management level, and it was becoming a leadership issue. And that's why I wrote my second book, The Green Executive, because I was being invited into boardrooms and I thought, well, I'd better get some models and things together so I know what to say to these you know C-suite type executives, and there weren't any, so I had to produce my own and I decided to write a book about it. So that was my second book, The Green Executive, which even though it was published 16 years ago, it still sells about a hundred copies a year. So I'm proud of that.

SPEAKER_01 3:11

Yeah, yeah, you should be. It's interesting because I I think any change in any business it has to come from the top, isn't it? It has to. But did you did you notice then a trend where leaders in the business, owners of the business, would almost pass this issue to their middle management and say, This is a problem, go and fix it, but then sort of step back. Was that what you were seeing?

Why Incremental ISO Thinking Fails

SPEAKER_00 3:32

Absolutely. And and you know, a lot of organizations were trying to manage this through ISO 14001. Now, ISO 1401, by definition, is incremental. You know, you set targets and you try and prove them every year. There's nothing about transformational change in ISO 14001. Sorry, people who don't know that's environmental management standard, I should probably say. It's the green equivalent to ISO 9001 uh quality standard. And this just wasn't working because you can only squeeze so much out of the system before you have to change the system. So then it becomes a leadership issue because you're making those larger changes. And I think about 2010, that's when the penny was starting to drop for a lot of organizations, that you can't really just say, okay, we're going to keep reducing our carbon footprint by 2%, because after a few years you run out of 2%. Yeah. And uh when I was writing the Green Executive, I reached out to a lot of people who were doing it better for case studies. And DiAgio, the drinks company, sprang to mind because when they ran out of two percents, they went from incremental targets to stretch targets, and they ended up building two enormous anaerobic digesters at their distilleries in Scotland, which took the the spent mash from the distilling process and processed it into clean energy for the plants and also helped treat that material so it required less treatment later on. And the the sustainability director at the time told me that that wouldn't have happened if they hadn't gone for this sort of incremental thinking to those stretch strategic thinking, but that takes leadership. So that's one of the examples in the book that I always come back to even after all these years.

SPEAKER_01 5:21

It'd be interesting, and I'll I'll ask you sort of midway through what your thoughts are behind the the SME versus large businesses, the the pros and cons, challenges and opportunities on that on that side to it.

A Personal Wake Up Moment

SPEAKER_01 5:31

Um I'd I'd like to to first understand from my point of view why you do what you do. You know, what you know, why did you start doing what you're doing and where's the passion from?

SPEAKER_00 5:41

Well, uh like a lot of people, I I long had an interest in the environment, but it was kind of separate to my sort of academic career, well, career in uh educational in engineering. Because in the early 90s, when I went to university, if you want to do environmental engineering, you were talking about sewage treatment. You weren't talking about you know designing pollution out of systems and etc. etc. So I was actually a green officer at Students' Union when I was at university and studying engineering, but I never saw the two converging. And after working for a few years uh post-university, my partner and I decided to take a career break, and we ended up teaching English in Murmansk in Arctic Russia, of all places. Oh. And there is a point to this anecdote I will end it over. But they uh one weekend we were taken out of Murmansk and uh away for uh a weekend away in uh in the countryside, and we went through this town called Monchogorsk, which ironically means beautiful place in the local Sami indigenous language. But I say ironic because downwind of its nickel smelter, there was just nothing alive. It was devastation. I've never seen anything like it. And when I got out of the car to take a photograph, and this is one I use in all my presentations, I could taste the acid in the in the air from the nickel smelter, from the sulfur emissions. And there was something about that moment, and you know, when we get on to talking about change and things like that, a visceral experience can be a massive driver for change. And I could see that the problem wasn't so much one of ecology and a lot of the you know, the jobs at the time, the environmental movement. The problem was the nickel smelter, and that that was an engineering problem. So when I came back to the UK, and you can tell from my accent, I'm not a Geordie, but my partner is. So we we we settled in the in the Northeast, and I got a job at Newcastle University on the at the Engineering Design Center on the Design for a Clean Environment project. And I was basically paid for two years to re-educate myself in bringing those two strands of my interest together, sustainability and engineering. And then from there, um when that contract was sort of running towards an end, uh, an opportunity came up at Teaside University. They got some funding in for the Clean Environment Management Center, and I was appointed as its first employee, and we built that up to a team of uh 14 people over the next six years. And that was, even though it was at the university, it wasn't doing much. We did a little bit of research and we didn't do much teaching, but it was mainly working with industry and teaside. So I then got six years of trying to implement what I'd learnt at Newcastle properly in business. After six years of that and a written-off car on the A19, I decided that I would uh set up my own business. And that's where Terran Firma came almost exactly 20 years ago. Uh so I've been doing that ever since, which I love because I can write books if I want to write books, I can deliver sustainability in whichever way I see fit and somebody will pay me to do. Unlike we were always working with uh public funds, so you had to do this and that, and you know, even if you solved a problem in 15 minutes for an organization, it wouldn't count because you had to give them five days support and all that sort of stuff. And I got I got tired of doing all that because the tail was wagging the dog a lot. Uh so I love the freedom of being able to do what I want to do. Obviously, if any of your listeners are self-employed, they will know the the peaks and troughs of business. There are different stresses and strains, but uh yeah, I absolutely love it. And um, you know, when I when I look back, there's a lot of changes that through those organizations that we've managed to implement in business for the better.

SPEAKER_01 9:51

Yeah, and good and good for you for for for putting your passion and your experience together to do something which which which is betters the planet and betters people around. And and I think I'm quite interested in that because you've obviously had a an experience which has led you to do what you do. I think the new generation are more in tune with sustainability and and more in tune with green, and and and but I think there's almost like a generation before that which still probably feels like it's a tick box exercise. For people who potentially are stuck are stuck in that and feels it's something they they they should do, but perhaps aren't aren't there.

Why Should Your Business Care

SPEAKER_01 10:31

Why should people care about this?

SPEAKER_00 10:34

Well, that's the first question I ask all my clients. Um I ask them the question why should you care about it? Because there's lots of answers, and I want to understand what it means to them. And for different sectors, it's different drivers. So we often talk about the business case for sustainability, and and people often suggest it's just one thing, but it's different for different sectors. So if you're working in um say you're working in the motor supply chain, you you make widgets for for uh internal combustion engines, then the shift to EVs that we're seeing around the world now and the increase, the accelerating shift towards EVs is going to give you a real challenge because it may mean that you're redundant. You know, you could become a blockbuster in the days of Netflix. Whereas if you're working in, say, a web design company, having a an environmental and social cause may be more about attracting the best talent, because survey after survey show that people want purpose in their lives. So you really got to understand, you know, are you trying to cut costs? Are you trying to win more contracts? Are you trying to keep relevant in a transitioning economy? Are you trying to attract employees? And those are all quite different parts of your strategy. So that's the fundamental question I ask at the start of an engagement with one of my clients. Because one of the principles I work on is there's a sweet spot between the interests of the business and sustainability. And if you get that right, you get those win-win solutions that are good for the planet and good for the business. And counterintuitively there was a movement, and you still hear it occasionally that people will say, Oh, organization X only did that because their customers wanted it, therefore it's greenwash. And I I I hate that attitude. I get quite angry about it in a way, because if the market is demanding change for sustainability and you deliver on it, that's not greenwash, that's part of the transition. That's you responding to the circumstances around you. And the idea that you should deliberately damage your company on behalf of sustainability just seems like a non-starter because you're going to punish the people who make change and not reward them. So it's finding that sweet spot, as I say, is the very first question I ask businesses because it is different from business to business, organization to organization.

SPEAKER_01 13:24

Yeah, and and and thank you, Tyson. It's an excellent answer. And you're absolutely right, because each business will have different goals and motives. But I think what I guess what's interesting, what I imagine you find interesting about your work is that when if leaders have a an open forum or a discussion internally in their business, let's say there's 10 people in that senior management team, I bet they've all got different motivations and factors around them, which I guess is important to hone in and find some form of common ground with that.

SPEAKER_00 13:53

Yeah. Yeah. The

Getting Buy In Without A Lecture

SPEAKER_00 13:55

other reason why I ask the question is a bit of a psychological trick, which is if um by answering it, the people around the table, particularly if they're senior, are selling sustainability to themselves.

SPEAKER_01 14:06

Yeah.

SPEAKER_00 14:07

Whereas I could put up a slide, PowerPoint slide, and say, here's the reasons why you should change. And their immediate reaction, well, you can say that, but you don't know the pressures we're under, etc., etc. And you know, and uh they won't take it on board. So actually digging through some of those motivations and understanding is the first part of culture change for me. Yeah, the very first step. So I'm quite happy to take 20 or 30 minutes over that instead of you know two minutes reading out uh bullet points on a PowerPoint slide.

SPEAKER_01 14:44

So I imagine that the importance of involving the team is crucial because I think a lot what I think a lot of mistakes I've seen is businesses that have gone, we need to do this, and that probably haven't gone through the exercise you've just mentioned there. They haven't thought of why they need to do this, they've just said we need to do that. And they've taken one person internally, or actually they've brought something externally just to to go and do that, but not necessarily involve the team, and then people see that as a an add-on to their business, so that's not my problem. Is it is that the step change when you see the companies that that that sort of change the culture, I guess, to do that?

SPEAKER_00 15:16

Yeah, well, uh culture eats bre uh strategy for breakfast is the famous quote. It's attributed to Peter Drucker, but like all these things, if you dig into the quote, it's not quite clear whether he actually said that or not. But I I it works though, yeah. Yeah, a good slogan, whichever. And it's absolutely true because you know you can have all the glossy pieces of paper you want setting out strategies and stuff, but if if it people aren't bought in, they nothing will change. You'll just get business as usual. Because most of the decisions we make in our day, we make by default, we do things by habit, and the same applies at work. So a lot of the work I do is try and find ways to disrupt that business as usual and try and get the thinking separate.

Authority Must Match Responsibility

SPEAKER_00 16:01

But you make another great point, which is you know, delegating down to somebody, and environmental managers and sustainability managers typically have very little authority to change anything. Yeah. They're often given lots of responsibility, including keeping the boss out of jail, you know, if in case of a pollution uh incident or something like that, but they have very little authority. And one of the other things that's really important to do is to make sure you're aligning responsibility and authority. And that's why I always propose that you should delegate responsibility down through the reporting structure rather than sort of creating a green silo, you know, in a sustainability department who are meant to influence the whole rest of the organization, you know, just through charm, or even worse, sustainability champions who are often frontline volunteers. And I've heard again and again them being given KPIs, and you just go, How can you give a volunteer a KPI? You know, give it give it to somebody's job it is to deliver on the KPI, yeah, you know, whose bonus or whose promotion prospects or anything else, you know, use that structure because that's what it's there for. So yeah, you're absolutely right. There's often a disconnect between the um the intention and the actual who's got the authority to make change happen.

SPEAKER_01 17:26

Yeah, brilliant.

Targets, Backtracking And Pushback

SPEAKER_01 17:27

I I think, and this might be my opinion, but it is my opinion, but uh I saw a real movement four or five years ago where a lot of the conversations I was having, you know, with seeing leaders were about sustainability, the things were moving, people talking about their scope one, two, and three. And I've seen I've seen a bit of a I've seen a reduction of conversations regarding it. I I've seen a bit of a uh people putting it on ice. Now I imagine that's coincided with the world getting pretty tough and business getting tough, but have you noticed that?

SPEAKER_00 17:56

Definitely in the in the media and in the sort of public narrative. Yeah. Uh you hear bits and pieces in the press about industry. But if you actually dig into that, you know, quite often this is um the fossil fuel sector has made various moves over the decades towards a more sustainable energy future and then come back and decide no, we're doing oil and gas. And that's regarded as somehow backtracking on sustainability, but the oil and gas industry does oil and gas. You know, that's um it's sort of uh putting Dracula in charge of the blood bank and all that sort of thing. You know, that's it. That's what their raising debt trade is. And but it's really interesting to see how other organizations are finding it. And there was a big hoo-ha, I think it was last year, when HSBC they'd set a net zero by 2030 target, and then they realized that there simply weren't enough zero carbon office blocks in the world for them to occupy to hit that target. It's clear then that they set that target without thinking through the timing of the target, because there's there's very much a sort of Goldilocks zone of the timing of targets. You have to leave enough time to actually make the change happen. And that could be in capital investment projects which are going to take years to design, commission, and uh uh before they're actually ready to use. But you don't want the target too far away, that it's somebody else's problem. Yeah. So there's a real art to that target setting, and a lot of this sort of backtracking is people realizing that their their initial target that they might have gone at in a sort of quite a gung-ho way is was just unrealistic. So if understanding the business case is the first step, I suppose the second step is understanding realistically where you are in terms of addressing the subject because not everything's under your control. And I don't know, maybe HSBC is is big and powerful enough that they could commission office blocks, but even that's going to take many, many years for them to have these to move into. So it's that's a challenge in itself. But the I would going back to your original question, is is it slowing down? I think people are realize starting to realize that push is coming to shove and that what they said would happen really easily isn't happening so easy. It's tough. They have to make these decisions, they have to make changes, they have to have winners and losers. There was a quote I read this week was uh somebody said um in any change there's winners and losers, and the losers pick up the phone to the government. So uh and uh you know we can see that going back to the uh the auto industry, we can see that with the debate over the EV mandate and whether it should be um diluted. But at the minute the auto industry is meeting the EV mandate, and if they do dilute it, there's an argument that they'll simply be penalising the people who have taken it seriously and made the changes and rewarding the laggards. Yeah. Um now I'm sure people might be screaming at at me for that saying that, but there's a certain amount of that. And there's a lot of misinformation going about at the minute, and a lot of it is paid misinformation. So um there was a case of a PR company winning a prize for uh spreading doubt about heat pumps. And this has happened, you know, for decades in different sectors. Uh, you know, whether when um Rachel Carson wrote Silent Spring about the effects of DDT in 1961, there was immediately uh an industry sprung up to Try and persuade us all that Rachel Carson was wrong and that we could use DDT. And if we didn't, everybody would die of malaria and all this stuff. And it went through smoking and lung disease, it's gone through lots of other issues. There's always a pushback from vested interests. So a lot of the noise is coming from those vested interests, and there's money being pumped into both PR companies and political parties to try and resist that change. That's perfectly normal, and I see it as a sign of success. We're sort of hitting the steeper bit of the S curve of change, and um some people are starting to get very uncomfortable. But if that wasn't happening, we probably wouldn't be trying hard enough.

Theo James Recruitment Message

SPEAKER_01 22:46

Apologies for interrupting this episode with a very quick announcement about my business. Theo James are a specialist talent provider, specifically to the manufacturing and engineering sector. I'm incredibly proud of what we've achieved since our inception in 2015. We specialise in roles from semi-skilled trades right the way up to our TJ Exec search arm of the business, both on the contract and permit side. We offer both bespoke one-off campaigns for heart-of-fill roles or a full partnership service where we become an extension of your business. For any information, please get in touch with me or the team. I hope you enjoy the rest of the episode. Thank you.

Cost Savings And Net Zero Psychology

SPEAKER_01 23:39

Said previously about understanding why they're doing what they're doing, because actually a legitimate and fair reason for an engineering company could be cost saving. And potentially, I imagine when people get into these projects, they don't realize the cost savings that can be had from even the smallest changes, it's changes as well. Well, I presume.

SPEAKER_00 23:57

Yeah. Well, this is uh it's a again, it's a very interesting sort of psychology in this because I'll give you an example. I was w running a workshop for a group of manufacturers uh at the start of this year, and somebody somebody asked the question, will net zero cost your business money? And everybody nodded. And I said, Well, hold on a minute. This was halfway through, we'd already been talking um about energy for a long time. And I said, Hold on a minute, you've just been telling me about how much money you've been saving through all these measures like LED lighting or um reducing the pressure in your compressed air systems, even solar power purchase agreements, PPAs, all saving you money. And they said, Yeah, but we did that to save money, not for net zero. And they'd kind of divided measures that would cut carbon emissions into net zero being the ones that cost you money and the others being ones you would do as normal business. Now, I'd again that's very short-sighted, and it creates this negativity about net zero, because if you look at the transition costs, you can save a huge amount of money. You could use some of that to invest in the slightly um less economically advantageous measures that might do you well to uh keep your customers happy or keep your employees happy and that kind of thing. And then it's quite a small number of measures that are actually going to cost a large amount of money that you won't see any direct investment back. But even then, I've come across many examples of where people have done stuff measures that aren't going to save them money, and it's done them really well in terms of competitiveness because people are looking at the business and saying this is a good business, they're taking this seriously. They're part of our carbon footprint. So if we um use them as a supplier, then our carbon footprint shrinks. And these things are quite difficult because it's hard to quantify that. Um it's very easy to or relatively easy to do a simple cost-benefit analysis of you know, we install this bit of kit and we it's going to cost us um X hundreds of thousands of pounds, but it's going to save us X tens of thousands of pounds every year, so we get a return investment in so many years. All of that's easy, but in terms of actually winning new business or attracting employees or um staying relevant in a when you know the the economy's changing, those are very hard to quantify. Yeah. So they don't fit neatly into a spreadsheet. And that's where it can get can get difficult.

SMEs Can Move Faster Than Corporates

SPEAKER_01 26:46

Which is which I think is it kind of brings you on to the the the SME versus large corporate debate. Because and just when you were talking there, I was thinking, well, a lot of you know, are you in a strong position if you're an SME or a large corporate? Because I guess I imagine there's there's there's pros and cons in different ways to answer that. But I know a lot of our clients have the issue now where they're perhaps tendering for some work, and let's say it's Rolls-Royce, let's say it's uh it's a big prime, it's a big organization, and and they might now look at their scope three, their supply chain, and go, if you are going to tender or supply to us, you must be you must be X, Y, and Z. So you must adhere to this, otherwise you can't apply. That's quite easy for a big business to do because they've got loads and loads of companies and want to work with them. Not so easy, I guess, for a smaller company who's you know perhaps can't afford to do that. Where does that sort of balance come into it in terms of being a pro or a con for that?

SPEAKER_00 27:37

Yeah. Um, I always push back against the sort of poor SME line because what I find with SMEs is they are so agile that they can turn into sixpence when larger organizations are still producing strategy reports. You know, they the levers of power connected to the to the controls by very short cables so stuff can just get done. And you know, one of my favorite case studies that it's not a manufacturing company, but it was a a dis distributor of um tourist leaflets in Scotland. And their boss, chief executive, was just really passionate. So even before before Vin Tariffs and things emerged, he installed a wind turbine um at his uh at his facility. And you know, he never expected it to do anything other than make him feel that he was doing the right thing. But some of the Scottish Quangos give 30% of tender scores to sustainability. You know, usually it's 10 or 15%, but um some of these were up to 30%. And leaflet delivery is sort of a low margin, difficult to differentiate yourself type business. And the feedback he got from one successful tender was on sustainability, everybody else put in a policy. You put in a picture of your wind turbine, so he just flattened them. Uh and another small business uh of all people is a small family-run paint company in Br in Belgium. They did all sorts of fascinating things, and they had a a people and planet fund that came from a proportion of profits that then a panel of employees could decide how they're going to spend. So the first solar panels they put on the roof of the uh business were paid through the People and Planet Fund because they weren't expecting to make a return on it. But then as the economics of solar panel uh changed and some of the government incentives in Belgium changed, they covered the entire factory in solar panels because it then made economic sense. But then the People and Planet Fund was funding other things, and it was anything from bike maintenance through to uh fresh fruit for employees in the in the factory, as uh, you know, healthy employees make a better business and all that kind of thing. So I haven't seen a funding mechanism as clever as that anywhere else. And I think it's because it's a small business and you know the the boss knows everybody's name and they just if they want if he wants to do something, they just work out how to do it, give it a go. If it doesn't work, they stop doing it, and if it does work, they keep doing it. And the the freedom I think to change is quite refreshing in a small business. That's you know, that's obviously the the upside, there's downsides in terms of trying to find um you know money for capital investment or um the fact that a lot, if you're a small business, a lot of your suppliers can be massively bigger than you are. So you can't just turn around and say to them, we want you to reduce your emissions to cut our emission, uh, our footprint um in the same way because they'll go, Who are you again? Yeah. So there are challenges and things, but I think uh I think that agility gives SMEs a real opportunity to um to innovate and do things differently, and big businesses can learn a lot from small businesses.

SPEAKER_01 31:21

I completely agree, which is I know you mentioned Blockbuster right at the start. A key a key example of a business you just never ever think would go the way they did. It was everyone was at Blockbuster on a Friday night when you were well, you certainly were a few of my age, it was just a thing, wasn't it? But they just they couldn't pivot that quick.

SPEAKER_00 31:37

Yeah, and I I learned recently they had the opportunity to buy Netflix and when it was really cheap and decided not to go down that line. Because I remember when Netflix and Love Film, I I think we subscribe to Love Film rather than Netflix, but you you you you went online and you you um you booked a movie and they sent it to you. Yeah, yeah, uh and then you sent it back again. And but because they had the catalogue online and they were able to pivot into streaming these movies instead, and yeah, and that's the the sort of existential threat.

EV Transition And Manufacturing Survival

SPEAKER_00 32:12

And we've seen in almost every big change, we've seen a lot of big names fall by the wayside, and I think the low-carbon one will be the same. The question is whether those companies can pivot properly from what they're doing today today to what they're want to do. And you know, a lot of again when you read the narrative in the press, it's it's very simplistic because when we're talking about EV mandates and stuff, they almost assume that you know uh you know brand X can decide, you know, this week we're going to produce 50% EVs and the 50% internal combustion engines, and next week we'll go to 55% EVs. But it doesn't work like that because if you want to build EVs, you need to retool the factory, uh, which means shut down shutting down for six months or longer, and then you're not producing anything, so you're not selling anything, so it's a massive change. You need the supply chain. And you know, we've seen here in the in the northeast of England uh an EV supply chain build up around Nissan, which they need because the it it it's not, you know, it's a completely different car, and um uh you know, and the leaf is starting to to roll off the production line now. So it's not a trivial change. And it's very interesting, I think, this announcement of a joint venture with one of the CD manufacturers to use some of the capacity. I think that could be a way forward because then those companies are maximizing the use of those suppliers who have co-located with them. There'll almost certainly be an exchange in ideas and expertise, and it just helps the the process along and keeps manufacturing jobs in in the Northeast rather than them um all being outsourced uh you know and offshore to to China. Um because there's a very big risk that we that's what will happen is we just end up uh importing even more goods and making even less stuff here. So that's a very interesting development, I think, and uh maybe one that other people could learn from. I haven't obviously it's it's only on intention and memorandums of understanding that sort of thing now. So we we we don't have any insight to how well it'll work, but I I do think that's an interesting way of uh moving forward.

SPEAKER_01 34:36

Yeah, yeah, same. I was uh I was surprised, fascinated, and pleased probably when I saw that for exactly everything you've just outlined. But I think what you said there is absolutely key, it's that it's that shared knowledge because it's always for for decades, it's been us versus them, and you know what will and been fear that Channel do X, Y, and Z, and they have accelerated pretty much every market in manufacturing for a long, long time now. So why not pull together and share the knowledge and the expertise that both have got? Exactly what you said. The Northeast has a perfect, perfect supply chain, readily available, but massive challenges. So I think uh I was I was surprised to see it, but I was really pleased to see it because I just think it's exactly what it needs. It's a clever move, probably one they needed to make, I think, in honesty as well.

SPEAKER_00 35:20

Yeah, absolutely, because we're again we could just lose manufacturing, which is always, you know, uh particularly politically, is very, very difficult. Um, but that's the that's the problem when you've got change. You know, they the original one I think was when the transistor appeared on the scene. Uh I as I understand it, none of the old valve manufacturers survived that. All the transistor companies were new startups. Um, and as you know, I think I mentioned Kodak earlier, you know, they invented digital uh photography and then decided not to exploit it, and then that technology came to consume them. Uh Netflix and Blockbuster, we've talked about. Um and even I found out recently that um X and Mobil were early innovators in lithium-iron batteries. So they may have done a Kodak, they may have created their own emesis that will come and destroy their their market in the future. It's uh history repeats itself and all that. But that's a very uh interesting concept. But again, you know, BYD started off as a battery manufacturer, so they make some hybrid cars now, but they've never been a legacy internal combustion engine manufacturer, and that's when it that's a real threat to legacy manufacturers is people coming in who have always set up to do the new thing rather than the old thing, and they don't have to make the transition. So, yeah, hopefully these uh joint ventures will will help smooth over some of those issues because as I said before, in any change there will be winners and losers, and there'll be a lot of political pressure from the losers and and other allies to um you know to say, oh, this is terrible, look at all the downsides, but of course they'll never mention the upsides.

SPEAKER_01 37:18

I couldn't say I couldn't get you on here and not ask this question. So

A Practical 90 Day Restart Plan

SPEAKER_01 37:21

if if you're if people listen to this, let's say this person is um senior leader, owner, director, what you know, someone in the business which um of responsibility, manufacturing business, SME, let's say 200 stuff, and they have started the journey, they maybe were well on with it, maybe they've they've they've sort of paused things last few years, but listen this going, we need to get back on track. What would be if you working with that business, what would be the the initial 90-day plan? What what would be the first things you would look at to make sure they would need to what they start getting where they need to be?

SPEAKER_00 37:57

Well, as I said, first of all, get the business case spin down because everything else will build build from that, and then work out a s a long-term strategy because most sustainability strategies I see are action plans rather than sustainability strategies. And I use a technique called backcasting, which is very simple but really, really powerful. So again, with key decision makers, we will define what the organization would look like if if they met all their targets at whatever future date they have set. And then we work backwards to today to decide what they have to start doing today to get on the right trajectory to meet that. And it's interesting the again, I mentioned psychology before, but it's interesting the psychology of this because it's actually a lot of fun because you can let your imagination run wild, sometimes too wild after you know, you're not going to have solar-powered hover cars by 2040, you know. So um you have to sometimes uh pull it back a little bit, but it gets people away from what we call the tyranny of the present, which is all those short-term factors, and you mentioned your business has been quite hard of recent years, and um every so often we have a downturn and upturn and all the rest of it. And it's very easy to let those factors stop you doing stuff, whereas I find because you're so forward-looking using backcasting that it tends to leap all that, and you get the balls rolling to make those longer-term um judgments. Those are backcasting tends to do the the um the big changes. There is still a rule for quick wins, and some of those things that I was talking about before, you know, like just getting a power purchase agreement where somebody else pays to put solar panels on your uh on your factory roof and they take some of the money and give you some of the money or give you some of the power free or whatever the the agreement is, um, you know, those quick wins show progress in the meantime. And I think there's a it again, it it's very context dependent. So if you have compressed air on site, you know, for a lot of manufacturers that's 30 to 40 percent of their energy bill. And I think people manage compressed air much better now than when 20 years ago when I started the company, because I had a contract to go around and look for quick wins, and compressed air was always the banker that I went to first because you had uh uh you know you could just hear the the escaping air through leaks, and often it the pressure was too high and they didn't have a cold air input, so it was breathing in its own exhaust and working very inefficiently and all these things. It was all very simple stuff to fix, and you could save a huge amount of money uh straight up. Now I think that's improving because people are now talking about four-bar factory, and um you know the typical compressed air system works at six to eight bars. So compressing air just to four bars saves a huge amount of money in itself, and that's uh a concept I wasn't hearing 20 years ago. It's it's it uh there's a much more of a focus on it. So there's a lot of stuff you can do around sort of good management of the assets you have to start reducing those energy costs, and then you can demonstrate both internally and externally that you're making some progress while you're working on the longer-term things that backcasting gives you. So it's sort of a twin-track issue. And quick wins are very important for employees because if they see you declaring you're going to be net zero by 2040 or 2050, and they know that you're wasting huge amounts of energy and doing nothing about it, or even you know, disposable cutlery in the canteen, uh, it's cognitive dissonance. So you need to get those little things right as well, because those are the things people understand.

SPEAKER_01 42:14

Yeah, wonderful. And look, uh thank you for this. It's been look, it's been it's been fascinating, and you know that what you just said there, they're tangible changes people can make tomorrow, and uh, and and that's amazing. But actually, one of my biggest takeaways personally from from all this today is that yes, it we're talking about sustainability, but we actually could be talking about anything. What you what you're talking about is leadership and transformational change. And I think right what you said right at the start, and really interesting to hear all the classic examples like you block, but because it's really important to remember those because sometimes you forget, but actually, to get take everything back to understand why you should do something, and that has to be bespoken, authentic to use a leader and use a business, and to involve the staff in that to really understand it that that in itself creates a reason to change because without a reason to change, why why people you know we always need a what's in for them, otherwise, what's the point? They won't get involved, and I think that for me is my personally my biggest takeaway when I think about how we do things here in the business that a lot of changes we make because we feel we should or we need to make them. But why? You know, what what's the what's the advantage and what's the disadvantage of of not doing it? Um, and I think there'll be loads of little nuggets there of people take away, but actually, I think this episode will just give people confidence that there's lots of stuff they can change tomorrow, but it needs to come from the leadership team. But actually, it all comes from the staff as well. So thank you, it's been fascinating, really hard.

Resources, Contact Details And Closing

SPEAKER_01 43:46

Um, what's the um the best way? Obviously, please tell us briefly about your book and your podcast, the best way to contact you. What's the what's the what's the easiest?

SPEAKER_00 43:53

Yeah, well, the websites uh www.tera infirma.co.uk, uh, a name I chose before I ever had to read uh uh spell it out to people online or anything. Um the I host the NetHero Business Podcast, which comes out every Friday. Uh that's posted to the blog, which is on the website, and you can sign up to our newsletters and things there. Um there's other free resources including our monthly newsletter and some extracts from books and other white papers and publications. So there's all kinds of things there to um to uh dig into. I I post a blog about uh well one of them is a podcast, so uh two other blogs a week at least um on LinkedIn uh a lot, probably too much. Uh so it's it's pretty easy to track me down. But yeah, if if you are interested in learning more about this, um please do get in touch.

SPEAKER_01 44:49

Amazing. Thanks, Caris. Very appreciate it. Thank you so much for listening or watching this episode of the Manufacturing Leaders podcast. Please just like or subscribe, it really helps grow the show and obviously improve the industry. If you want any more information about Theo James, as I mentioned midway through the episode, please get in touch with me or the team. I would love to talk about how it can help you directly or your business. We are more than just a recruiter, and I know people say that, but it's something I'm incredibly passionate about. We are in business for much more than just a bums on seats approach. We want to help people grow, we want to help improve their lives, and ultimately I want to work with businesses and people who share the same values as we do, and that's something I'm incredibly passionate about. So please, if that is you and you are passionate about that dream role or passionate about your people, please get in touch with me or the team. I would absolutely love to talk a bit more detail. Thank you very much. Speak soon.