Energy provider npower has picked up McKinsey & Company’s transformation expert Kyle Braden, who joins in the newly created Chief Recovery Officer position. The company has for some time been under considerable stress as billing problems and poor customer satisfaction has seen customers seek out other options. The new hire will be tasked with developing a turnaround for the company, as new regulation comes into effect that may see more of its customers transition to competitors.
RWE npower is a UK energy company, and subsidiary of the German giant RWE group, that supplies around 5.4 million residential and business customers with electricity, gas and energy services. The company has a range of generation capacities in the UK, including coal, oil, biomass and gas-fired power stations, and produces more than 10% of the UK’s electricity. The parent company is situated in Germany and operates across Europe. The energy giant has around 60,000 employees and supplies electricity to 16 million and gas to 7 million customers.
Npower has, in recent years, had a reputation for having a low ranked customer service, sparked in part by 2013 high-profile billing problems. The issue triggered regulator, Ofgem, to last year investigate the company. Former Npower CEO, Paul Massara, pledged to make considerable changes to how the business treats its customers when he took the helm in 2013. His poor performance in bringing about a turnaround saw him quit the job in August this year, as among others, the way the company dealt with billing problem have seen the company’s image among customers fall further, coming at the bottom of the list of customer satisfaction survey of energy suppliers (at 35% satisfaction).
Paul Coffey, a long veteran at RWE, has since taken the helm at the company, and is tasked with seeking ways to limit the mounting losses at the UK subsidiary npower. Total losses topped £111 million in the first nine months of the year, compared to ‘only’£81 million in losses booked in the same period last year.
As part of the company’s strategy to improve its reputation, McKinsey & Company’s Kyle Braden has been drafted in as the company's chief recovery officer. Kyle has more than 15 years’ experience in the turnaround/restructuring arena, with a focus on distressed clients.
In the new role Braden, a partner in McKinsey's energy practice, will focus on developing and implementing a range of projects with the aim of getting the company back on its feet in terms of profitability. The appointment may come in the nick of time for the utilities firm, as regulatory requirements that ease the switching of dissatisfied customers from poorly performing companies are about to come into effect.
“We have initiated a fundamental recovery programme in order to stabilise the business as early as possible whilst providing a more robust and effective operating basis to serve our customers in future," says Coffey. He adds that the addition of McKinsey’s expertise, as well as wider management changes, are set to "provide the necessary capability to execute an effective and sustainable recovery”.