COP26: EIC's Supply Chain Case Study Series - EthosEnergy (Day 9)

COP26: EIC's Supply Chain Case Study Series - EthosEnergy (Day 9)

09 Nov 2021

The EIC's Supply Chain Case Study Series highlights key EIC Survive and Thrive Insight Report case studies all throughout COP26, highlighting the success stories of the energy sector in decarbonisation and innovative new energy transition technologies.

On Day 9 we look at how EthosEnergy emerged from a crisis with a OneEthos culture.

How is EthosEnergy thriving?

Having just embarked on a root and branch cultural transformation, EthosEnergy was hit hard by the COVID-19 pandemic. However, by seeking out opportunity in a crisis situation, the company propelled its OneEthos agenda to new heights, the acceleration of the programme helping it to achieve extraordinary results across the board.

The challenge

Growing a business to hundreds of millions in turnover inside seven years is no mean feat. Starting out in 2014, EthosEnergy has swelled into a truly global organisation made up of 4,000 employees spread across 94 locations.

It has become a worldwide go-to provider of rotating equipment services and solutions for players in the power, oil and gas and industrial markets, specialising in asset management and long-term maintenance alongside the provision of parts and repair services.

However, while EthosEnergy had grown somewhat exponentially, it had also morphed into a machine that was becoming increasingly difficult to manage. By the time new CEO Ana Amicarella joined in December 2019, the business was held together by an unwieldly and complex structure made up of 40 profit and loss lines, 12 business units and overheads that were unsustainable. To compound the problem, opportunities to secure more work with clients were being missed due to a lack of cohesion among different areas of expertise within the company.

A few short months later, the world was shaken by the coronavirus pandemic. EthosEnergy entered into survival mode.

The solution

Despite the immediate crisis created by the pandemic, EthosEnergy was already well on its way to reversing its fortunes before it arrived. The silver lining (if it can be called that) was that COVID-19 served as a catalyst to accelerate the OneEthos project: the firm’s bid to simplify the business, transform its culture and build closer ties with clients.

Amicarella had already collaborated with upper management to detail the company’s position and plans for reform. A wholesale listening exercise (with staff and customers) kicked off at the start of March 2020, a process that involved interviews and data gathering, and resulted in the idea to restructure and simplify. Board approval of the three-year plan soon followed, before the strategy was unveiled throughout all layers of the company.

On July 1, 2020, two months ahead of schedule, the new structure officially went live. The most senior personnel across EthosEnergy started new roles as the business quickly adapted to new ways of working – indeed, relaying the message that this transformation stretched far beyond revised organisational charts was a key priority.

The crux of the simplified OneEthos business plan is a laser-like focus on what the firm does best. Loss making activities were cut out as much as possible as part of a back to basics reset which also involved the implementation of straightforward processes and principles.

Such principles encompass several cultural keywords, namely engagement, relentlessness, nimbleness, and inclusivity. Furthermore, an uncompromising approach to quality and consistency was instilled through rigorous training on standards and client relationship building.

Another key outcome has been in the realm of capex. Today, EthosEnergy views capex through the lens of ESG and energy transition, the ultimate objective being to become the partner of choice for energy industry players who need support in sustainability-led areas. Helping clients with end-of-life equipment issues and carbon footprint reduction has become a key value proposition.

So, what fruits have such a huge transformation exercise bared so far?

Financially, EthosEnergy is in a far healthier position. By the end of 2020, profits had risen by 40% and cash reserves were boosted significantly. This is in part driven by impressive rates of repeat business – among the firm’s existing clients, 80% typically offer repeat work and carry high praise for the way in which services are delivered.

Indeed, such relations are becoming more contractual as opposed to transactional, with new clients being handled in this manner. For example, last year saw a new customer in Israel pen a contract for $72 million of work.

On the cultural front, staff are routinely feeding back on how EthosEnergy feels like an entirely different company to be a part of. Survey results are 30% more positive than ever recorded!

While EthosEnergy will be the first to admit that more needs to be done, it can now realistically work towards its state long-term ambition – cooperating with all partners to make energy sustainable, affordable and available for everyone, everywhere.

About EthosEnergy

EthosEnergy is a global leading independent service provider of rotating equipment services and solutions to the power, oil & gas, and industrial markets. The company has depth and experience in asset management and long-term maintenance agreements, whilst offering transactional, factory-based parts and repair services across all industry sectors. Globally, its services include power plant engineering, procurement and construction; plant start-up; facility operations and maintenance; design, manufacture and application of engineered components, upgrades and re-rates; repair, overhaul and optimisation of gas and steam turbines, generators, pumps, compressors and other high-speed rotating equipment. In 2019, KTR-EthosEnergy was awarded a Certificate of Recognition by North Caspian Operating Company (NCOC) for valuable HSSE contributions, high quality work and timely delivery.

Read the full EIC Survive and Thrive Insight Report here.

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