60210 FEBRUARY 2011 ABOUT THE AUTHORS The Fight for Minds: Applying Strategic KRISTINA TURILOVA Deputy Manager for the Russia Communications to Achieve a Sectoral Cleaner Production Program since 2009, is a task leader for Transformation the IFC Foundry Benchmarking How can IFC advisory teams--with limited numbers and budgets--trigger Study. She works with real sector and subnational clients actions among multiple players to bring about an impact that reaches the scale in Russia, Ukraine, and the Europe and Central Asia (ECA) of a country or a sector? The IFC Russia Cleaner Production Program encountered region, promoting and that question when initiating a benchmarking study of the ferrous foundry implementing resource efficiency. Kristina joined IFC sector in Russia. We knew that no agent of change is more powerful than an five years ago with the Sustainable Energy Finance idea. The key is to get the idea firmly planted in the hearts and minds of the Program, managing relation- participants, who then will act on it and achieve the desired impact. To engage ships with several financial institutions in Russia the whole sector in converting to resource-efficiency practices, we had to introducing energy efficiency finance. approach communications strategically. Our objective: root the use of benchmarking in the minds of sector decision makers--and engage multiple MARIA SIGUTINA Operations Analyst for the Rus- stakeholders we did not have direct access to and convince them to participate sia Cleaner Production Program, joined IFC two years in the study. This SmartLesson outlines our three keys to effective strategic ago. Among her responsibili- communications, which can apply to any Advisory Services (AS) program with ties are stakeholder communi- cations and development of a similarly ambitious target of changing the mindset of stakeholders. communications strategies for the program. Maria is an operational architect of the Background Challenges strategic communications approach for the IFC Foundry In April 2008, IFC established the Russia Cleaner In conducting the study, we faced challenges Benchmarking Study. Production Program to stimulate investment in in motivating and engaging stakeholders-- APPROVING MANAGERS cleaner production and to promote best challenges that are familiar to most AS teams: Yana Gorbatenko, Manager, practices and policies in Russia. In September Russia Cleaner Production 2009, the program launched resource- · Putting global knowledge into local Program efficiency benchmarking of Russian ferrous perspective. The IFC role and additionality foundries (see Box 1). are to introduce ideas and instruments Ilya Sverdlov, Senior Communications Officer, Central and Eastern Europe Box 1: About the Russia Foundry Benchmarking Study (CEU) region The goal of the study was to use benchmarking of resource-efficiency performance levels to help industry players measure themselves against their peers, identify the gaps in best-practice levels, and use that informa- tion to reduce the gaps. The study revealed that by matching European standards, Russia's iron and steel foundry industry (the fourth- largest in the world by volume) could save up to $3.3 billion annually and reduce carbon dioxide emissions by 4.5 million tons a year. Russian foundries use over 3 times more energy, 160 times more water, nearly 4 times more sand, and 14 percent more metal per ton of good ferrous castings product than European foundries use; and the average production volume per Russian employee is nearly 4 times lower than in the European Union (EU). If Russian foundries were able to match the efficiency of the best-performing EU plants, the energy saved would be sufficient to power a typical Russian city of 1.5 million people. Also, by matching EU standards in water efficiency, Russia would save enough water to supply 3.5 million residents. SMARTLESSONS -- FEBRUARY 2011 1 Inefficient Russian equipment contrasted with a modern furnace (right) used in European foundries. that did not exist before locally. At the individual · "This study is useful for companies like mine."-- level new ideas are difficult to absorb; a change at Describe the kind of company the IFC initiative is the sector level requires a multitude of individuals designed for. Articulate it in a way that helps a to change their minds. company see itself within the definition. For example, for foundry benchmarking we clearly mentioned that · A diverse target audience. The target audience for the study covers iron and steel and that we will AS interventions is commonly a large group of small compare only similar elements (for instance, casting and medium enterprises or a foundry sector that for pumps will not be compared with casting for combines hundreds of companies that operate engines). under varying conditions and are run differently. How do you reach such a group in a meaningful and · "This really works."--To establish trust in the idea, efficient way? show practical examples of where it has worked. We used examples of oil and gas and other industries · Achieving scale. In any country or sector there are applying resource-efficiency benchmarking pioneers who can pick up the IFC idea fast, but the successfully. greater portion of the target group is inert. How do you achieve scale when it is not possible to meet · "I will be able to act on it."--Very often, decision and persuade every individual? makers lack time to dig into technical details. We helped foundry plants' decision makers see the link We found that there are three important aspects of between benchmarking and prioritizing--how framing AS strategic communications to effect a comparison via benchmarking can help them prioritize change in behavior: 1) inception of an idea; 2) coalition their investment against gains from improving building; and 3) choice of communication instruments. benchmarked performance. The response was immediate. Many decision makers embraced the Lessons Learned concept and made it their "own" idea. 1) To instill an idea, make it resonate in managers' minds--with what they already know. "My resources are scarce. I do want to improve my plant performance, but I should be really strategic in where I put them. We often hear from companies: Our circumstances are I will make my staff be part of your benchmarking, as in this way different. What works somewhere else might not be I will get a factual picture of where I should focus more and can right for us. We are unique--you cannot compare us improve more spending less." with others. --General Director of a plant employing thousands of employees Managers have difficulty understanding how sectoral gains and a big IFC idea can be applied to their own Throughout our benchmarking study we managed to business. IFC operates within an impact matrix of attract 55 agents of change who put their strong buy- billions of dollars in savings or millions of tons of in into practice and participated in the benchmarking. greenhouse gases avoided. Sectoral gains of billions of dollars from resource efficiency do not resonate with a 2) To scale up from one to reach multiples, build a manager of a company that operates within a coalition. significantly smaller realm. When launching the benchmarking study, our assumption To bridge this gap, you need to frame an IFC vision in was that we would reach the target audience via industrial way that it will become obvious and resonate with a associations. Well, that assumption failed; associations manager. Below are some desired responses--and ways turned out to be weak and represented the interests of to get them: specific vendors. We faced a real challenge: how to engage our target audience, who never heard of IFC 2 SMARTLESSONS -- FEBRUARY 2011 before and were, frankly, quite reluctant to listen to a feedback are key factors in coalition building. As much financial organization talk about the foundry business. as possible, avoid a "teaching and preaching" style that gives the impression of IFC cascading down We realized that IFC should not speak alone, but rather knowledge. We found that the following measures should involve local players who will spread the message. work well to encourage an open, collegial exchange of To put this approach into practice, we took the following information: steps: · Bimonthly meetings of the advisory board; · Establish solid credibility for IFC to talk about the particular business or area. First, the AS team educated · Online consultation process on key stages: themselves about the sector and conducted a survey of methodology, data collection, interpretation of the industry to identify its concerns and interests. We results; ran the results of this analysis by our IFC global industrial specialists to frame the concept of the · Biweekly e-mails to keep everyone in the loop; and benchmarking study. In addition, we hired one of the most reputable foundry engineering companies to · Workshops with smaller groups interested in develop a solid methodology and support for IFC specific topics. stakeholder engagement. 3) To stick in peoples' hearts, your message must use · Position IFC as an independent and trustworthy the right language, visualize, relate to your audience, counterpart. Activities such as benchmarking run into and be delivered appropriately. the very sensitive issue of nondisclosure of information. IFC's assurance that no individual data will be disclosed To be captivating, a message must be simple but has been a powerful message and an argument for substantive, clear, and easy to grasp. We spent almost two participation within the industry. months coming up with this simple formula for framing our messages: · Create a coalition. Establish a consultative body for your initiative that will comprise reputable and · Make the language right. In English, the IFC influential companies and individuals within the intervention is self-explanatory: "cleaner production industry. Use this group to test hypotheses, receive benchmarking study." In translation, most of the feedback, and spread the word across the industry. In words are not comprehensible to the Russian our case we established an advisory board of over 20 audience. For example: members who are personally respected in the industry and manage well-known foundry plants. Benchmarking as a term has no equivalent in Russian. So we excluded it from our discourse and · Build on professionals' motivation for mastery and replaced it with "comparative study of efficiency desire for recognition. Professionals want to learn new potential" to emphasize the resource-efficiency things related to their profession. We positioned the aspect of the study and its comparative nature. advisory board for the benchmarking study as a club of This was language our target audience understood professionals speaking on behalf of the sector--a lure and bought into easily. that's hard for any professional to resist. Participation on the advisory board was voluntary, and members Cleaner production and environmental issues have spent a significant amount of their own time providing poor a record in Russian managers' minds, because feedback to IFC and participating in the process. they are associated with charges and state ecological inspections that involve burdensome · Provide a platform for the grassroots exchange of compliance procedures. In fact, the terms knowledge and ideas. It is easier to deal with new and "environment" and "climate change" are not unusual information when you are not alone. Regular popular in Russia among managers due to their dialogue, transparency, and encouragement of political connotations. Our solution was to replace Russian foundry inefficiencies: preparing metal for melting, pouring sand into the form, and finishing the casting. SMARTLESSONS -- FEBRUARY 2011 3 those terms with "resource efficiency," which a Russian managerial audience associates with modernization and operational improvements. Sustainability does not have an adequate equivalent in the Russian language. · Visualize. Visualization of key messages is a powerful tool. We effectively communicated the potential for improvements by showing "before" and "after" photos of a plant that had improved its performance. We included such photos in the calendar distributed to almost all foundries. · Relate. Messages relating to sectoral gains do not work, because they are too generic and managers do not see themselves in these statistics. We coined a phrase that has Photo from the foundry calendar, contrasting the old equipment great impact in the Russian language and translates to with the new. "Changes bring profits." We use this phrase to show change as a process of improvements through benchmarking, which results in increased profits. Industry · Deliver appropriately. The message needs to be decision makers can relate to this message--and in delivered through appropriate channels by people the Russian it gets their attention, because it runs counter to stakeholders trust. Once again, we used members of the common attitude that "change is always something our advisory board to deliver our messages to the negative." industry. This channel has been most effective in inspiring companies to participate in the benchmarking Box 2: Strategic Communications Fact Sheet for Foundry Benchmarking The idea Benchmarking of resource-efficiency performance levels can help industry players measure themselves against their peers, identify gaps in best-practice levels, and act upon the results to reduce the gaps. Improvement in the performance of individual companies cumulatively will lead to improvements in the whole sector and a larger impact than can be achieved from an IFC intervention with a single company. Target audience Managers and technical specialists of the ferrous foundry sector of Russia represent 350 enterprises that range in size from 15 to 10,000 employees, are spread across 11 climatic zones of Russia, and produce completely different final products. Some are captive within large holdings; some are independent. Many have limited access to the Internet. And this group does not have a strong professional association representing their interests. Tools to relate the idea to · Picturing the user: Russian foundry benchmarking methodology can compare any ferrous foundry with individual foundry owners industry sector best practices through three dimensions critical to business operations: · Type of ferrous metal used: iron, ductile iron, and steel; · Differentiation of 32 types of final products, covering diversity and accounting for different processes for different types of products (comparing apples to apples); and · Seven business performance indicators that cover major stages of foundry processes and are applicable to any foundry. · Developing individual reports for all benchmarking participants to showcase how benchmarking relates to their own companies. Tools to make the coalition · Voluntary advisory board: Over 20 members, including decision makers from foundry plants, Ministry effective representatives, R&D and engineering companies, and university professors · Regular sessions of the advisory board (four sessions during a year of the study implementation) · Transparent approach and regular information updates · Individual consultations enabling each member to provide feedback Messages used · Changes bring profits. · Benchmarking helps prioritize investment in areas that will bring the most gains in saving resources and reducing operating costs. Coverage 14 percent of the market (by volume) participated in the study. Over 50 foundry units provided actual data on their performance. The dissemination stage covers 80 percent of active enterprises. 4 SMARTLESSONS -- FEBRUARY 2011 study: "My neighbor and other foundries are already doing this, so this is a right thing for me to engage in." Conclusion During the Foundry Benchmarking Study we tried to influence large groups of stakeholders to buy into the idea of benchmarking, with the goal of ultimately reaching the whole sector. Our strategic communications enabled us to build a coalition of supporters--local players--and reach the broader sector, with the result that 14 percent (by volume) of the industry participated in the study. (See the table.) The industry uptake so far has been good. Also, our IFC investment colleagues selected some five foundry companies to discover investment opportunities with a climate change component. Our next step will be to follow up on dissemination of the study results and to monitor changes in the industry--how their actions have changed and what impact those changes will bring regarding increased operating profits, energy savings, and reduced greenhouse gas emissions. 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