A leading basic services company was seeking to halt a sustained decline in its margins by restructuring to improve efficiency, agility and accountability.
Context
A water company present in more than 100 locations was facing a sustained fall in its EBITDA margins as well as a tougher regulatory context and more demanding stakeholders (mayors, communities, etc.). The board was concerned because, in its opinion, management was unable to provide solid answers to relatively simple questions.
Opportunities detected
The organization was highly centralized, did not promote accountability and there was little clarity about decision-making processes. As a result, some costs, such as maintenance, services and others, rose by more than 7% faster than revenues.
Six priority areas for improvement were identified to reverse the situation, increase accountability about results, facilitate coordination between areas, reduce levels of hierarchy, generate single reports, create an agile governance system and promote an incentives system.
Proposed actions
As a result of joint work between Matrix and the client, a deep transformation process was developed, resigning all dimensions of the utility´s organizational system. A decentralized management system was defined, creating new departments, eliminating or merging others and reassigning tasks. Roles and responsibilities were adjusted, and coordinating bodies were established. In addition, the incentives system was realigned with the company´s aims.
Impact
The company was able to implement the new structure without affecting operations or its reputation. The fall in margins was not only halted but reversed. Operating indicators also improved and the new structure increased flexibility and the capacity to react to local problems.
