Empire District Electric Company

power-lines

Competencies

  • Organizational Alignment
  • Strategic Development
  • Human Capital Optimization
  • Strategic Analysis & Planning
  • Reorganization/Restructuring
  • Re-staffing/Resource Redeployment
  • Competitive Positioning

Challenge

To develop and execute a comprehensive, strategic business plan with immediate impact, allowing Empire District Electric Company to remain independent, competitive, and financially sound.

Background

The company had made very few changes in its 94 year history, and most of the management and staff were longtime employees. The Executive Vice President (and named successor to the CEO) had started as a lineman at age 19. The company operated four fossil plants and one hydro-electric plant in southeastern Missouri. The deregulation of the electric industry led to a number of small, independent utility companies like Empire being bought or put out of business by large companies or consortia. The CEO at Empire wanted to keep Empire independent or, failing that, to get the most for its employees out of any action. (At that time, more than 90% of the stock of the company was held by its 900 employees.) They were financially sound but would not be competitive in a deregulated industry. The key element was the unrestricted costs that, in deregulated terms, could not be simply passed on to the rate base.

Process

ECI created the Competitive Positioning Process which included three key steps: Strategy, Structure and Staffing. A new business strategy was designed and a streamlined employee structure was developed, then staffed using zero-based staffing. An in-depth analysis of the competitive marketplace was facilitated, with complete positioning development of the company in context of other key competitors and related market segments.

Results

The realignment of the organization resulted in a net reduction of 6% of the number of positions. A zero-based staffing approach allowed those in the outsourced areas to compete fairly for positions in the remaining areas based on skills and experience. The resulting savings projected for the first year were exceeded. The company is still independent and financially sound today.


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