A Transformation Initiative for a Philippines Power Company

Background

Established in the late 1990s, the client is a publicly listed holding company in the Philippines with investments in power generation, distribution, and retail electricity services. It has grown to become a recognised leader in the Philippine power sector through its subsidiaries and affiliates, holding interests in numerous privately-owned generation and distribution companies. The client has a long-standing relationship with Renoir Consulting spanning fifteen years, with previous successful collaborations focused on operational efficiency and effectiveness.

The Challenge

Having undergone rapid growth over the preceding five years, the client recognised the increasing dynamism and competitiveness of the power industry. To sustain its leadership position and prepare for future growth, the client launched a strategy that aimed to develop a well-designed, agile, and integrated organisation staffed by competent professionals.  

Analysis of current working methods revealed several key challenges. These included key performance indicators (KPIs) not being consistently implemented throughout the organisation, a lack of clarity in roles and responsibilities, and unclear strategic alignment across different business units and with its parent company. The client sought Renoir’s expertise to address these issues and support its strategic objectives. 

What We Did

Renoir collaborated closely with the client’s team, embedding two consultants and a project manager alongside six dedicated client staff to form an effective project team. The client’s team members received training in Renoir’s methodologies and technical knowledge. The team met daily to ensure alignment and three Management Action Teams (MATs) were established, each focusing on specific workstreams: Revenue, Support Services, and Organisational Design/Behaviours. These MATs were integral to identifying opportunities, developing solutions, and implementing necessary changes within their respective areas. 

The Revenue MAT employed Brown Paper studies and management interviews to review key processes, identifying over sixty opportunities that were refined into eight comprehensive solutions covering areas such as Business Development, Project Development, Energy Sales, Energy Trading, Energy Economics, and Billing & Collection.  

Similarly, the Support Services MAT identified over eight hundred opportunities through similar exercises, which were condensed into eight solutions impacting departments like Regulatory, Human Resources, Reputation, Finance and Risk. The Organisational Structure and Behaviour (OSB) MAT focused on redesigning the organisation to enhance structural efficiencies and accommodate future growth, developing and implementing nine overarching solutions. 

To ensure the project’s success and sustainability, a Steering Committee comprising senior client personnel was formed to review results, provide guidance, and remove any obstacles. The MATs held weekly meetings, and the Steering Committee met bi-weekly. A dedicated Transformation Team, including both client members and Renoir consultants, visited participating branches to explain the new Sales management system and monitor its implementation. This hands-on approach was crucial in driving behavioural changes. 

The Results

The implementation of the project yielded significant and wide-ranging benefits for the client. The Revenue Management Action Team achieved an increased return on investment through more effective early-stage project evaluation. The splitting of Profit and Loss accountabilities improved identification of the root causes of losses and contributed to a decrease in revenue loss. Enhanced communication between commercial teams, facilitated through “Lessons Learned” reviews, led to a reduction in losses. 

The Support Management Action Team contributed to a reduction in budget variation, improving forecasting and expense control. Centralised corporate buying of travel and office supplies resulted in reduced man-hour requirements and significant cost reductions. 

The Organisation Structure and Behavior Management Action Team successfully restructured the power company, leading to greater operational efficiencies and enhanced flexibility to adapt to growth. The implementation of a RACI matrix allowed for the “right-sizing” of the organisation and improved efficiencies by identifying role duplications. Furthermore, improvements to the meeting structure resulted in a 53% reduction in meeting costs.