Management Cases

Managing public services in an emergency: the challenges of A2A

The challenge

The A2A Group, the biggest Italian multi-utility, operates in the sectors of electric power and gas (generation, sale and distribution); district heating; waste collection and recovery; and integrated urban water management. In 2020, due to the crisis triggered by the outbreak of Covid-19, the Group faced a series of challenges. The most pressing: guaranteeing continuity of service while safeguarding the health of employees and ensuring the economic and financial sustainability of the company. The latter was pursued among others by containing costs, in particular by tapping into temporary layoff funds, rescheduling new hires slated for 2020, and asking employees to use the past vacation days they had accumulated. The net negative impact of the crisis on the Group’s economic performance in the first half of 2020 was around €7 million.

Despite all the difficulties, A2A provided its full and prompt support for the areas that were hit by the pandemic. From the huge effort to step up street cleaning and disinfecting, to over €2 million in donations made to the Lombardy Region, to microfinancing for community-based initiatives to support for vulnerable families, to the production of valves for emergency masks in A2A’s plants.

The numbers

 

Sectors: Environment, energy, heating, networks and technologies, public services

Year established: 2018

Headquarters: The utility was founded in January 2008 subsequent to the merger of two public companies, ASM and AMSA, which became AEM. The Group is listed on the FTSE MIB Index of the Borsa Italiana

Headquarters: The A2A Group operates in Lombardy and in other regions of Italy; the company has also set up partnerships in other European countries such as Croatia, Spain, and the UK.

Share Capital: €1,629 million, divided into 3,132,905,277 shares, each with a par value of 0.52 euro. No investor may hold more than 5% of the share capital, with the exception of the Municipalities of Brescia and Milan, which control 50.8% of the company. The remaining investors (institutional and retail) number around 71,000.

Employees: 13,000

To contend with the initial phases of the Covid-19 emergency, what was clear to the company from the start was the need to protect its workers and at the same time to guarantee continuity of essential public services. Both were top priority; compromise was not an option.

To achieve both objectives, A2A started by reviewing protocols and procedures. A central committee was established with the participation of the CEO and a few operational officers, coordinated by the Head of Group Security & Cyber Defense, who drew up guidelines and interpreted the different decrees/laws, the Decree of the President of the Council of Ministers (DPCM) and the myriad norms issued daily by the government, the region and various municipalities. After clarifying the restrictions in the new rules, each individual Business Unit was tasked with deciding how to maintain service provision while keeping its people safe. The principal actions to this effect were setting minimum levels for essential services and determining the plants that were needed to guarantee them; handling documentation with the Prefectures to allow the company to transfer personnel as needed; engaging employees to ensure social distancing and to secure personal safety; and adopting organizational and technological solutions so that certain critical processes could be done remotely. A key aspect was the proper handling of internal communications, which essentially served to explain why, for everyone’s protection, office staff had to stay home while other employees were expected to work in the field. In the darkest days of the pandemic, A2A implemented communication activities for employees, utilizing all available channels (intranet, e-mail, text messaging to company cell phones, signage), with updated information on the situation and general rules to follow to safeguard people’s health and enable necessary activities to continue.

Crisis management also obliged the company to evaluate non-essential activities which, at least in the short term, could be suspended. This was done through a structured analysis on the entire portfolio of activities, and results were also shared with the labor unions. Another challenge involved making decisions in a context of intense regulatory uncertainty. The most delicate decisions involved interrupting plant maintenance, reorganizing remote work (including moving call center services to the homes of employees, which meant revamping the company’s organizational model), and effectively handling communication to all stakeholders.

The central committee also worked to effectively manage the resources needed to carry out activities to guarantee services to citizens. The number of employees per shift was reduced to a minimum; handovers between shifts were done in verbally form rather than written (as before the pandemic), daily temperature checks and symptom tracking were initiated with a self-administered questionnaire. To reduce the risk of contagion inside plants, a new organizational model was established with several teams that worked longer shifts, so that they never came into contact with one another. Following a request from the Prefecture to guarantee service for all plants, an agreement was drawn up with the labor union to contend with the emergency situation.

Crucial decisions were also made with regard to ensuring worker safety on one hand, and guaranteeing uninterrupted service to citizens on the other. To this end, housing was provided in the most strategic plants for workers who had to quarantine. Since essential service providers were considered front line workers, just like healthcare workers, if they tested positive for Covid but showed no symptoms, they were allowed to continue working. This being the case, A2A personnel were given the chance to quarantine directly on-site thanks to incentives, personal protective equipment (PPE), and health and safety protocols set down as agreed on with local healthcare units. The decision, which A2A went to great lengths to share outside the company, led to the need to build shelter villages complete with temporary housing units equipped with all the mod cons. Only a few weeks after the onset of the pandemic, the problem also arose of making sure social distancing was respected during plant operations. So the changing rooms and the cafeterias were closed, a move that upended the routines of 3,000 people. Employees were also allowed to go directly home once they finished their shift, without returning to the plant first as they previously would have done.

Takeaways

To recover from the crisis, A2A needed a new vision. This was the focus of the 2021-2030 Business Plan, finalized in January 2021, which aimed to “drive change by leveraging all our competencies and technologies to enhance the quality of life of people and the planet.” The current ten-year industrial plan includes €16 billion in investments earmarked for developing the circular economy and transitioning to clean energy. The new model represents a clear, transparent declaration of intent, an expression of the vision and the role of the company with respect to all its stakeholders.

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