Spanish energy company Union Fenosa operates in Colombia, where, in 2002, violence in the country had led to the relocation of a large population mass in certain poor neighborhoods located on the outskirts of various cities. Sixty-seven percent of this population lived in dire poverty, and of these, 99 percent weren’t charged for their electricity consumption.
There were 300,000 irregular unauthorized cases of power usage — subject to no regulation, quality control or safety measures — with all this causing a very tense social climate owing to a deficiency in the quality of service.
On Union Fenosa’s part, the outcome resulted in a loss of 21 million euros, 26.6 percent in energy losses and a payment of 78.6 percent in the bill collection. Due to these circumstances, the future survival of Union Fenosa’s companies in Colombia was clearly in jeopardy.
In an attempt to solve this problem, Union Fenosa chose to create Mipymes — micro and small companies — that handled the billing and management of community networks in deprived neighborhoods through a percentage of the bill collection. Likewise, diverse training activities were set up in areas such as energy conservation, business management for Mipymes managers, and training for marañeros, or unskilled workers, to become electricians. The estimated cost of this investment has been about 26 million Colombian pesos.
The results have been dramatic: Bill payments went up from 78.6 percent to 92.7 percent in 2005, and energy losses decreased from 26.6 percent to 16.7 percent that same year. Also, 78 new jobs within the company, and 1,200 ancillary ones, have been created; the bill payment rate has increased by 65 percent, and 50,000 families have regularized their distribution electricity installations. The main figures are essentially the same in 2008. This is a medium-term change management process that is not yet complete.
- 5 Forces Shaping the Future of HR
- Why ‘Leaders Eat Last’
- The Reskilling Revolution versus the ‘clay layer’
- When the leader can’t return to the office
- Combatting a campus (and workplace) mental health epidemic
- Psychological safety leads to better managers and teams at this major enterprise
- The skills gap: technology first