BCG Henderson Institute

Lessons from Italy’s COVID Crisis: an Interview with Francesco Starace, CEO of Enel

"The current emergency has given us an opportunity to further accelerate the digitalization of all our projects and the overall architecture of our businesses."

Business leaders around the globe are dealing with the unprecedented challenges that the COVID-19 outbreak has brought to companies, economies, and societies. Francesco Starace, Chief Executive Officer and General Manager of Enel S.p.A, one of the biggest utility companies worldwide, recently sat down virtually with Martin Reeves, Global Chairman of the BCG Henderson Institute, to discuss his organization’s response to the crisis. Starace discussed Enel’s crisis management measures, including a shift to remote work and new health insurance measures, as well as opportunities the organization has identified amid the uncertainty and his thoughts on how the world might look different after the pandemic.

What are some of the most creative crisis management measures you have put in place?

First and foremost, I would like to underline that our main concern is the health and safety of Enel’s workforce, alongside the continuity of the service we provide to communities worldwide. To tackle the crisis, we have implemented a series of preventive measures to ensure full operation and continuity of the service we provide in all the geographies in which we are present. We have performed stress tests in our networks, power plants, construction sites and telecontrol units around the world, that have shown the robustness of our emergency plan.

Furthermore, we have activated continuous smart working (telecommuting) for our employees worldwide until further notice, with exception for undelayable, essential activities, which are necessary to guarantee the continuity of the service we provide and the security of national electricity systems. Currently, 55% of our employees (over 36,000 people) are working remotely.

Moreover, we have drawn up an insurance policy to cover all the Group’s employees in the event of hospitalization with the COVID-19 virus. The insurance tool represents the first ever of its kind in the world aimed at guaranteeing support at global level for the ongoing pandemic.

Through the policy, we will guarantee a cash allowance for all Group employees who are hospitalized after contracting the virus or undergoing intensive care. Most of the Group’s asset base is fully digitalized, including generation assets and distribution networks, and can be controlled remotely, significantly reducing in-field interventions. Since May last year, 100% of our IT applications and all the data have been migrated to the Cloud, so we do not operate physical servers anymore, providing full accessibility from anywhere, scalability and fully automated operations.

What have been the biggest 2–3 challenges and how did you address them?

This unprecedented global emergency is testing our resilience and underscores the importance of the service we provide for the well-being of society. As a utility, we provide an essential service in all the geographies in which we operate, therefore we need to ensure full operation and continuity of service. In less than two weeks we increased the number of people telecommuting every day by almost 13 times. We have shifted from a daily average of 2,700 employees (around 4%) in smart working (pre-crisis level) to over 36,000 people (55%) simultaneously in smart working, with no negative impact on Group operations. Thanks to an extra IT effort, we managed to rapidly provide all those employees that were previously unequipped to work remotely with PCs and connectivity devices, managing to close, with great success, the digital divide.

To ensure business continuity of our infrastructure and networks, we activated backup Operating Centers to increase resiliency in case one or more of the 50 Operating Centers used to oversee the High/Medium Voltage networks entered into emergency status. On the generation side, remote operational management of hydro, geothermal, wind and solar power plants has been enhanced, making it possible to operate plants from backup control rooms. Furthermore, our employees were reorganized into smaller teams, shifts were redesigned to increase special and temporal distance among colleagues and non-core maintenance activities have been rescheduled while preserving grid operations and power plant availability.

Thanks to our cloud-based applications, our external contact centers are operative and third party employees are able to work remotely. Today, we have full-digital customer operations and interaction channels in place: apps, mobile/web interactions, virtual assistants and chatbots are used to provide information, activate new contracts, modify existing ones and execute payments remotely.

Many organizations are seeing opportunities emerging in addition to challenges, whether it be in addressing new client needs or opportunities to improve your organization’s effectiveness. What opportunities are you seeing?

The current emergency has given us an opportunity to further accelerate the digitalization of all our projects and the overall architecture of our businesses. I believe that during this period we are going to discover new, and more efficient ways, of performing our tasks and an improved way of working. I am convinced that there will be no turning back when all of this is over.

What are your thoughts on how the world will be different after COVID-19, and how are you moving to address that new world?

It is still too early to imagine the world after COVID-19, as many countries may still have to face the consequences of potentially prolonged lockdowns and strained healthcare systems.

Some economists foresee a deep recession on the horizon, but many Governments around the world are ready to intervene with unprecedented strength to avoid job losses and poverty level increases.

These extraordinary measures also represent an opportunity for society to accelerate the transition towards a decarbonized and sustainable way of living, based on renewable energy and electrification of final consumption. Being a leader in the electricity sector, we at Enel are ready to support and promote this change.

With the benefit of hindsight, what do you wish you had done differently?

Since the very beginning of the emergency, we quickly took all necessary measures to ensure the safety of our workforce and the operations of our assets, therefore securing stability of the overall system. As CEO I am satisfied with what we have done so far in such short time and I believe we acted rapidly to minimize the impact. As an individual, I would have preferred to see more synergies in the way in which this emergency is managed worldwide.

What would be your message to leaders in geographies that have not yet seen the full extent of the crisis, on what they should be focusing on for maximum impact as a leader?

Unfortunately, the virus will arrive sooner or later also to other countries that so far have been less exposed to it. It is just a matter of time, but the evidence is clear. My suggestion is to act now, before it gets too late, and not to hesitate making important decisions. As a general comment, lockdown measures must be timely in order to come back to normality as soon as possible. The earlier we go back to normal following the lifting of the strict lockdown, the more limited the impact will be.

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