Karachi Electric

Lecturer: Sir Abdul Hameed Khan

Emad Hanif – 18642

Uzair Haroon – 18568
Faizan Ahmed – 19393
Wasma Junaid – 16432
Noor Effendi – 5896
 TABLE OF CONTENTS

1. INTRODUCTION 3

2. ORGANIZATIONAL PHILOSOPHY 5

3. PESTLE ANALYSIS 7

4. PRE-PRIVATIZATION ERA 9

5. LEWIN’S CHANGE MANAGEMENT MODEL IMPLEMENTATION IN K-ELECTRIC 11

6. PRE VS POST TURNAROUND 13

7. TURNAROUND STRATEGY 15

8. FOUR FACES OF ALTERNATIVE WORKFORCE 16

8. INITIATIVES 18

9. ELEMENTS OF NEW CULTURE 19

10. SOCIETAL IMPACT 21

11. AGILE MANAGEMENT 23

12. IMPLICATIONS OF COVID-19 25

13. UNPRECEDENTED RAINS 26

12. PLANNED IMPROVEMENTS 28

1. Introduction

K-electric is also one of the oldest companies in Karachi which was established in the city even
before the creation of Pakistan. K-electric came into existence on September 13, 1913, under
the 'Indian Companies Act of 1882', the company was nationalized in 1952 but was re-
privatized on November 29, 2005. K-Electric is also one of the city’s largest employers with
almost 17,500 permanent and contractual employees currently. K-electric by providing
efficient electricity ensures that the cities and country’s economic engine continues running
knowing that Karachi is the financial capital and also the industrial hub of Pakistan.

Karachi Electric Supply Corporation (as it was known formerly), was established to fulfill the
energy needs of Karachi. The purpose was to enhance the power demand. In the year 2005 it
was privatized by the government which retained its stake of an estimated 26%, with 71%
approximate ownership transferred to foreign confederation and Abraaj Group acquired it
with Tabish Gauhar being the CEO. Abraaj group turned the whole organization around with
an initial investment of $1.2 billion.

Before and after privatization company remained in loss and it was the first time in 2012 that
the company made profits. Then later on they rebranded KESC to K-Electric. In 2016 onwards
they planned on bringing change and improvement to the company which also became part
of the company’s core values that is aiming towards customer centricity and the provision of
uninterrupted and safe electricity. At every level of operations comprising of environmental,
social, and governance policies the company introduced value creation.

1.1. Nature of Business

At present, KE is Pakistan's only private electricity utility. It is also the only vertically integrated
utility, meaning that the company is generating, transmitting and distributing electricity. No
other power utility is vertically integrated. KE caters to over 3 million consumers not only in
Karachi but also in Dhabeji and Gharo in Sindh, and Uthal in the adjacent province of
Baluchistan. It covers the total coverage area of 6,500 square Kilometers.

Geographically 1/3rd of the city is categorized as low loss; meaning there is little to no theft
in these areas hence load shedding is exempted. This accounts for about 70% of the utility’s
consumers. However, 2/3rd of the city are high loss areas of KE as there is more theft, and
therefore load shedding in these areas.

KE has 1800 plus feeders. The Low tension (LT) cables length is 19,751km and 11KV (High
tension) cables length is 9,875km. There are 30 customer care centres that are established by
KE in past 12 years. These are basically universal centres like whichever centre you go to your
issue will be resolved irrespective of the area. They are basically known as Integrated Business
Centres (IBC).

1.2. Competitors

K-electric has no direct competitors as it is an exclusive license holder for electricity

distribution in Karachi. There are other entities generating energy, such as Tapal and Engro,
however they act as KE’s supplier due to the company’s exclusivity.
2. Organizational Philosophy

2.1. Vision:

To restore and maintain pride in KE, Karachi and Pakistan.

K-Electric vision is to rejuvenate pride in the minds and hearts of its customers and
stakeholders for the company but also for the city and county as well.

2.2. Mission:

Uplifting Karachi, By Creating the Value to Deliver Safe, Reliable & Affordable Power to Its
People.

K-Electric mission is to uplift Karachi by providing it nonstop, safe and cost-effective power.
This mission is engraved in all the initiatives taken by K-Electric.

2.3. K-Electric Values:

K-Electric values its employees and customers immensely. They believe that their employees
are the key driver of K-Electric’s success. This ethos is reflected in their core values – CARES –
which defines their corporate culture. CARES stands for,

Customer Centric

K-Electric aims to satisfy all its customers and stakeholders by anticipating and understanding
their needs and delivering the best possible solutions and services. Putting customer
centricity at the core of its business values, KE has been able to be the first one in several
initiatives taken in the sector focusing on improved customer experience. To ensure customer
centricity, K-Electric has taken multiple initiatives such as they implemented SAP – ISU for
greater transparency into the billing system. They were one of the first utilities in Pakistan to
do so and also integrate digital platforms with SAP which enriched customer care touch
points. K-Electric also created Universal Customer Care Centre which is a one stop solution
for customers regardless of their power connection’s physical location.

Accountability:

K-Electric takes ownership, accountability and responsibility for all their actions. K-Electric
ensures that they are honest and fair in all their dealings. K-Electric aims to create an
answerable culture and accountability in each and every employee. To rightfully implement
this value K-Electric started rightsizing and accountability with identification of areas of cost
optimization. K-Electric brought in Change Management Program which is one of the largest
organizational development initiatives in private sector. To ensure accountability in
employees their performance is monitored and target based KPIs are set with interventions
at all levels.

Reliability

To eradicate the notion of unreliability in minds of its customers and stakeholders, K-Electric
has made reliability one of its core values. K-Electric proactively takes such initiatives which
creates a sense of reliability. To ensure a stable and standardized flow of power is the aim of
K-Electric and to be known and considered as a reliable source in the minds of its customers.
Furthermore, K-Electric supports communities for societal and environmental well being. For
this K-Electric has taken Community Engagement Initiatives such as Project Ujala, Project
Sarbulandi. K-Electric has also engaged with 16 philanthropic institutions.

Energized

K-Electric is energised to inspire their employees to add real value to all stakeholders. Hence,
K-Electric has focused on Learning & Organizational Development with targeted training. K-
Electric wants to energise not only themselves but the house, malls and industries of this city.
K-Electric wants a lighted and energised Karachi.

Safety

For K-Electric Safety of its employees and the safety of its customers is essential. K-Electric
wants to become a zero-accident company and wants to reduce chances of any accident on
field or in homes. K electric also tries to provide a safe environment for all its employees
therefore a cultural revamp was done and a focused approach towards becoming a more
inclusive organization. K-Electric as an employer supports diversity and inclusion and
providing an enabling environment.
3. Pestle Analysis

3.1. Political Factors

KE operates in a diverse locality stretching far towards city outskirts also covering some areas
of Baluchistan. People from all cultures of Pakistan are included in the company’s customer
base. This requires being on good terms with all political groups. The company operates with
the national interest at heart. However, its processes are vulnerable to the political instability.

Conflicts which may spark amongst the different political/ethnic/religious groups of the city
inevitably damage the company’s power infrastructure. Furthermore, utility companies are
the most common fatality of false allegations for political point scoring.

3.2. Economic

Companies in the power sector have extremely volatile raw materials in terms of their impact
towards the company’s costs. A small change (either positive or negative) in the
macroeconomic space has enough potential to affect the company’s fiscal performance,
growth and stability.

The main challenge of K-Electric is to supply uninterrupted power supply. The price volatility
of oil and gas sector becomes a hurdle in the achievement of this objective. Furthermore,
delays in determination of tariff and lack of rates not sufficiently compensating for the cost
of doing business can impact the ability to invest in the necessary infrastructure.

The constant accumulation of receivables towards government departments/offices has also

resulted in an increase in KE’s loans to fund operations and maintaining the working capital
requirement.

3.3. Social

K-Electric is directly impacted by the city’s social environment. The dynamics of Karachi’s
social structure are very diverse. Mushroom growth of population, (majority of which is not
planned) increases the demands of the company’s product. As the sole distributor of
electricity in Karachi, KE serves people from all economic classes, religions, sects, and family
structures.
The Company takes all measures to display respect towards local traditions and cultures. It
brings local communities onboard before the inauguration of operations in any area. This is
done to ensure a favorable social environment and to minimize the resistance from the locals.
CSR activities are a constant part of the company’s community centric endeavors and serve
as a means for the company to create social relationships.

3.4. Technology

Innovation and technology improve the chances of goal achievement and can help unlock the
potential of resources. Incorporating efficiency through technology can reduce costs and
improve the quality of operations. However, heavy investments are a prerequisite to remain
up-to-date with the briskly changing times.

Exploration of the digital environment is a great opportunity to increase customer

satisfaction. For KE, it can also help in improving recovery. Since the majority of customers is
reluctant to adopt the new means, the company has taken upon itself to introduce initiatives
to promote digital payment channels through customer promotions.

Advanced technology has also created newer methods to incorporate efficiency, for example,
the company is currently working on bi-fuel mix for augmenting and updating the generation
network.

3.5. Environment

Electricity generation requires the use of oil and gas. This eventually has severe ecological
effects creating air and water pollution, damaging the land and even resulting in dangerous
accidents including oil spills, gas leakages, and fires etc. These environmental bearings have
to be accurately identified, controlled, mitigated, and prevented.

As a vertically integrated utility generating, transmitting and distributing electricity, K-Electric

has a proactive approach towards its carbon footprint and control of emissions. The company
ensures compliance to global standards as a preamble of its operations.

Lack of awareness related to observance of safety procedures is a challenge this company

faces every monsoon. Encroached structures constructed close to, or extending on the power
infrastructure pose a great threat.
3.6. Legal

As a public listed company, K-Electric is duly audited by reputed accounting and audit firms.
KE is in compliance with the regulations of the State Bank, the Pakistan Stock Exchange, SECP,
the regulatory body NEPRA, and the Ministry of Energy; for all monetary disclosures,
investment audit, statutory and supervisory rules. Compliance to these bodies is mandatory
for the company. Considering the environment, it operates in, even the pricing and tariff of
the company are decided by regulator NEPRA. The company is not independent and
autonomous in its operations. Furthermore, KE has to work with civic bodies and government
authorities for continuing its operations.

Any change in the government plans pertaining to the energy and power sector has a direct
impact on the company. Therefore, KE remains vigilant; discovering new opportunities and
challenges which may arise from changing national political climate.

4. Pre-Privatization Era
K-Electric was known as KESC. It was undoubtedly facing huge losses for 17 consecutive years
and zero profits for the last five years at least. The costs of producing electricity for the
company was always higher than revenues from sale of electricity. This has been happening
due to various different reasons as mentioned below,

• Financial & Liquidity Issues:

K-Electric was in dire need of investments before privatisation. K-Electric had cash losses of
$15 million per month. Due to lack of investment and capital, they were unable to purchase
sufficient furnace oil or raw resources. They had huge outstanding sovereign debts and
issues. There was $1 Billion CAPEX requirement over next 3 yrs. In addition, high number of
doubtful receivables year on year. In conclusion, KESC was financial unstable and had massive
liquidity issues.

• Infrastructural Issues:

Due to lack of investment and liquidity issues, KESC had old and destroyed plants which led
to inadequate maintenance & unreliable network. The plants had high-capacity costs and the
useful life of the plant and machinery had been depreciated to almost 60 percent. This
resulted into high transmission and distribution loss of approximately 40%. Also, the theft and
pilferage of electricity was a major reason for transmission and distribution loss.

• Structural issues:

KESC had a very lop-sided structure and due to ineffective communication across different
business processes, there was no stability in the structure. Without proper structure it was
impossible for the management to come to terms upon strategies and ideas to set the
direction for the company's future.

• System & Process Issues:

KESC had very outdated processes. The old and legacy billing system was an example of how
obsolete the processes were at KESC. Shortage of funds led to lack of automated process
which was highly required. There was also no investment in energy management modules for
accurate calculation of losses. We could say that after 1970, there were no meaningful or
substantial process changes brought into the company. The company did have computers but
they were also not up to date or used efficiently by the employees. KESC required a proper
system change in order to progress.

• HR Issues:

KESC major problem in HR was the absence of transparency & accountability. The company
was overstaffed to an extreme. There was excessive overstaffing of non-core workers. The

Labour Union had a strong hold and were largely politically motivated. KESC was famous for
corruption and bribery. There was no proper performance management system which led to
operational inefficiencies. Employees were not answerable to anyone and were highly
inefficient.

• Stakeholder issues:

KESC faced a lot of law-and-order problems. The existence of no-go areas within the city led
unreliability of power supply and ensuring there was no power theft was extremely difficult.
Moreover, KESC had a very unfavourable reputation in front of its stakeholders.
5. Lewin’s Change Management Model Implementation in K-Electric

Lewin proposed three essential components in bringing the change within the organization.
In order to bring an effective change, an organization has to go through the following three
stages i.e., Unfreezing, Change and Refreezing. When an organization is on the verge of
eradication phase, the last resort it obtains is to bring actual change rather than a cosmetic
one; therefore, the driving force for the change is robust than the restraining force. The was
the same case with Karachi Electric (previously known as KESC); the organization has decided
to completely revamp itself. The political induction, inefficient operational and energy
management, lack of change w.r.t time, talent acquisition was the major reason for their
debacle.

Unfreezing

Karachi Electric (at that time known as KESC) was privatized and Abraaj group took over its
management. Abraj Group, initially investment approx. $1.2bn to uplift and comprehensively
revamp the organization. There were three factors that influenced unfreezing stage i.e.,
political-induction, old & decimated power-plants and orthodox billing system. Tabish Gauhar
was appointed the Chief Executive Officer for the organization and he commenced from
Square-One. Under his leadership, Karachi Electric went through major overhaul and from
there the organization uplifted their graph.

Changing

Change is the common ‘principle’ for the survival of the organization and the organizations
have to adapt rapidly. Lewin’s model helps us to ensure that the change remains permanent
and static, and at the same time it causes minimalistic disruption among the business
operations. Karachi Electric was at the verge of collapsing and then Tabish Gauhar decided
to revamp the whole organization. The first step he took was HR-Restructuring and in this
process, he obtained numerous feedbacks from every employee within the organization. The
primary phase for HR-restructuring was the removal of politically inducted employees and
golden hand-shakes were provided to these employees; then the new management decided
to remove old and decimated plants to reduce extravagant cost and replace with new power
plants to generate efficient and effective energy. The essential step he had taken was to
remove the hook and theft connections from the whole city (which was quite difficult and it
is still in process). The cultural shift was quite visible as the organization shifted towards
flexibility, accountability & transparency. The transparent culture helps to uplift the
organizations and becomes the major source for the success. Tabish, shifted the organization
structure towards divisional model where the business processes were alienated and group
into divisions. This major shift helps the organization in increased operational efficiency and
flexibility.

Refreezing

Now, the organization has went through a major overhaul and the purpose is to persist this
change; therefore, the refreezing stage has been initiated within the organization. Multiple
policies and standard operating procedures (SOPs.) have been defined to ensure that the
change remains effective and persistent.

Some positive results were observed due to these changes. These positive elements include:

 KE recorded a profit after 17 years in 2012.

 In 2012, Issued Rs. 2 billion AZM Finance certificate and received an outstanding response
from investors.
 In 2014, issued Sukuk (Shariah compliant bond)
6. Pre vs Post Turnaround

This section explains prior and after-change scenario incurred within Karachi Electric.
Following are some key findings we have analyzed:

• Distributed Oriented vs Customer Service Oriented

Priorly, the purpose of the old-management was to just install the connections and increase
the existing customer base; however, the principles of safety & reliability were severely
compromised with this approach. Consumers may not realize, but with this strategy different
electrical appliances can get damaged due to unreliable and fluctuated power. However, post
2008 the company decided to opt from customer-oriented approach where the purpose is to
install reliable and safe connections. This strategy has enhanced the goodwill of the
organization.

• Large & Centralized Vs Decentralized

K-Electric was primarily a centralized organization which had to follow the directions set by
the power ministry (as it was nationalized). Therefore, the structure was utterly rigid and
centralized; however, this scenario was changed after the privatization. Tabish implemented
more flexible and transparent divisional structure where business processes were managed
by separate divisions and this causes increased flexibility. Decentralize structure brings
innovation and provides a flexible environment and for this reason K-Electric has shown a
remarkable improvement

• Stagnant Culture vs Innovative Culture

Stagnant culture is where the work environment within the organization has lost its positive
energy which enhances the efficiency among business processes. When you have a stagnant
culture, your organization is destined to get eradicated with the time. However, this issue was
realized when the company was privatized and from there, they have implemented sort of
innovative culture where employees are empowered to share and implement newer ideas for
the betterment of the organization. An innovative culture brings charm to the organization.
One of the key components of innovative culture is job-crafting and the new management
focused on this so employee can engage in different activities by changing their tasks and
interactions.
• Operational Myopia vs Ownership & Accountability

Organization which suffers from operational myopia or lack of foresightedness can never be
successful and this was the same case with K-Electric. K-Electric was more focused towards
distributed approach rather than seeing the `larger` picture. Therefore, the focused was
shifted towards futuristic approach and the customer satisfaction was primary goal. The
organization focused more towards ownership and accountability and this resulted in
increased employee satisfaction and work-life balance as well.

• Nepotistic Approach vs Fresh Blood Infusion

The organization main problem was political induction and politically-motivated employees;
therefore, they were the primary source of resistance in the revamp of K-Electric. They have
moved towards induction of fresh blood i.e., younger and educated personnel to increase
their business efficiency. Fresh blood infusion brings newer ideas and this attitude prosper
the organization.

• Bureaucratic Setup vs Intrapreneurship

K-Electric was a state-owned enterprise and the major disadvantage was the all the directions
are provided by the power ministry. Another problem was that the larger organizations
cannot have line or centralized structure. Bureaucratic setup for such firms seems to be
inefficient and ineffective; so, the organization later encourage intrapreneurship. Employees
were empowered and provided flexibility.

• Corruption vs Zero-Tolerance

The new culture is focused on the zero-tolerance principal where the accountability is an
essential ingredient. In the past, we have heard of many illegal practices which does have
impacted KE; however, now there is a zero-tolerance policy where the illegal practices are
accountable and strict actions are taken. This approach has also increased their public image
as well.
7. Turnaround Strategy

• HR-Restructuring

The primary challenge for Tabish was the HR-restructuring and the removal of politically
inducted employees. The first step, he took was the put voluntary separation scheme in place
or in simple words golden handshakes were given to many employees. The organization then
outsourced more than 4000 non-core designations to enhance effectiveness. The
organization workforce was reduced from 17,000 (approx.) to 10,000 (approx.).

They further introduced a cultural change management program within an objective to bridge
the gap b/w the employees and the management. This bought confidence among employees
and at the same time they considered themselves as a part of single family. More than 1000
employees were removed on the basis of corruption and illegal practices as a part of
accountability process.

Employee performance management was introduced to have an insight and evaluate

employees. Some measures include such as Annual bell curve was put in place, 360-degree
performance review etc. were implemented.

• Customer Service and The Concept Of IBC

The organization after 2008 have shifted their focus towards customer satisfaction and for
the resolution of their problems they established 30 integrated business centers. It is a one-
window resolution center where customer from any locations can come and resolve their
issue; it is not divided on the basis of district or areas. Existing call-centers were expanded
and upgraded. The firm also established SMS and other alternative communication channel
to engage the consumer and resolve their problem. With this communication channel, they
timely provide updates regarding the maintenance and other issues. These measures have
certainly increased their image and also resulted in increased customer satisfaction.

• Segmented Load Shed

The fundamental issue was the unreliable and fluctuated power which results in damage of
electrical appliances. Therefore, the management, in view of supply-demand challenge,
decided rotation of load-shed timings on same feeders and also segmented / divided feeders
into multiple categories to measure losses and make strategies to optimize them.
• Recovery Initiatives

K-Electric has taken some brilliant recovery initiatives by introducing multiple schemes.
Recently, they have also launched schemes like Azaadi and Qadam barhao to provide amnesty
in the billing process. Different measures such as rebate/amnesty scheme, out of court
settlements were taken to enhance recoveries and lessen their losses. Furthermore, they
have also collaborated with law-enforcement agencies to facilitate this process.

• Technology

As a part of turnaround strategy, K-Electric move towards automation to increase their

business efficiency. They implemented SAP-ISU, a popular tool for waste disposal and utility
companies. SAP-ISU helps to automate and streamline generation, transmission, distribution,
metering and customer care functions. However, the organization still needs to invest more
in technology to reduce its cost and increases the efficiency task. Furthermore, implemented
energy monitory system with a purpose to reduce transmission & distribution losses.

8. Four Faces of Alternative Workforce

Organizational culture may be hard to define and tricky to manage. It can have a powerful
impact on team and individual performance. Organizations that nurture an optimistic culture
around a shared set of values have an advantage over competitors. Employees who perceive
their need for finding meaning and purpose of life being met at work display higher levels of
productivity and put in greater effort. Culture is a powerful driver of employee engagement,
which has been found to augment productive performance. This is why leaders in K-Electric
struggle to purposely create a culture that inspires employee determination and partnership
around a set of shared values.

8.1. Traditional Worker

The traditional workers of K-Electric include the company’s management staff. These are the
employees who fully benefit from the company’s culture and the incentives it provides. All
management staff is entitled to sick and casual leaves, medical reimbursement, health
insurance, and company services such as gyms and yoga rooms.
8.2. Outside Contractor

These are the employees who work on campus, but are not on the company’s payroll. These
third-party hires include the company’s data processing staff. They also include support staff
such as peons, security guards and janitorial services. These employees are not KE staff and
are not entitled to all benefits. The company’s management has allowed these employees to
utilize the gym/yoga facilities as an initiative of balancing the culture.

8.3. Tenured Remote Worker

These include the company’s field staff, including the meter reading operators, field
supervisors, and 50% of the company’s maintenance teams. These non-managerial
employees are not able to use the company’s on campus resources. They are compensated
by a higher number of annual leaves, better medical coverage, and pension.

8.4. Transactional Remote Worker

These include 50% of K-Electric’s field teams which are hired via contractors. These also
include the contractual teams hired during emergencies (such as rains, urban flooding and
heat wave). These are temporary employees as they are hired by (and report to) contractors.
However, K-Electric provides these employees with medical insurance as long as they are on
its contractor’s payroll.

K-Electric believes that creating a consistent culture across the four unique human capital
segments requires a strategic foundation. A positive organizational culture is not able to
flourish without proper focus, purpose, and necessary action.
9. Initiatives

9.1. HR-Initiatives

In the initial phase when KE realize the need for change they came up with the idea of change
management that was to promote a culture of ownership and visibility, a change
management program was launched to bridge the distance between employees and senior
leadership. But it wasn’t in this way that the change management program was directly
implemented in KE instead they take onboard each and every employee ie 13000 employees
and share the program idea with them each employee from top management to lower
management and ask them to share their opinion on it. Taking onboard every single employee
increases the motivation in each employee that the company does value them and their
thoughts hence the implementation of change management would be easily compared to
another scenario of directly implementing as it can be resisted by employees.

Accountability

The implementation of change management and taking onboard each employee also
increases the productivity of the employees as they felt honored that KE does value them and
their views. On the other hand, this change brings up the level of accountability each and
every employee was accountable to each and every work and task performed by them to be
either checked on weekly or monthly bases and each member was questionable to the work
done by the employee. I proper track record of tasks was kept to make sure each employee
is monitored.

Performance Management

As the accountability of the employee increase and their product directly increase because of
the implementation of performance management. Each employee was evaluated and
rewarded based on the performance

9.2. Learning and Development Initiative

Induction

Fresh minds were inducted in the form of Engineering, Management, and Finance Trainees to
bring new perspectives for the company’s direction. The ideology was to bring new ideas and
fresh blood to the organization and work in the expansion of the business. The management
Trainee program is for 1 year in which the talent candidate is trained over a year in different
departments to gain expertise in different areas. Based on the performances the trainee
candidates are promoted to Assistant Manager positions.

Distribution Network Academy

Establishment of KE DNA for providing technical and vocational training to the city’s youth.
This is one of the many steps taken for community upliftment. KE also hired individuals from
the high loss area and train them by giving awareness and provided the opportunity for the
employee in this area i.e., Landhi, Korangi etc.

Training Calendar:

Launch of a quarterly training calendar to emphasize the importance of learning for

management employees of all levels. Each and every activity and training of the employees
are listed in the training calendars.

10. Elements of New Culture

Safety

Safety is the most important factor for KE. It makes sure that the employees are working in a
safe and secure environment and try to provide all safety measures in the field too. Not only
this but also KE wants a secure environment for the consumers too.

An example of this during Eid Ur Adha social media campaigns ran across the digital media
platforms to not to tie your animals with an electric pole

During monsoon rain spell and a massive campaign is run across channels to make sure each
and every citizen is safe and secure.
Improved Network

KE establishing a new and improved network that has increased the supply of electricity to
3202KW

Employee Management

Azam Tameer e Nau: When bringing up the change management 13000 employees were
taken onboard with their points and views on the change management.

Zaufishan: it is an extension of Azam Tameer e Nau i.e., KE realizes that there were some
problems within the department and that is affecting the productivity of the employee
therefore they upon all the departments all together to resolve all the internal problems
within the department and restore the productivity and maximize the productivity of the
employees.

Integrated Business Centers (IBC)

KE established 30 integrated business centers all over Karachi, IBC centers are built to cater
to the problems of citizens of Karachi though they belong to any area of the city. Your
problems would be entertained on the prior bases

Campaigns

Burq was one of the campaigns against electricity theft. For such operations that are too risky
for the employees because they face too much retaliation from the general public in that area
therefore KE not only required their own security but also, they usually required helps from
the police and the rangers.

Qadam Barhao Scheme was one of the campaigns ran to provide leverage to the defaulters
who actually were not the defaulter in the first place but due to any of the reason they were
not able to pay up the bill on time and when they got the next bill including the amount of
the previous bill, they were unable to pay the bill lump sum and therefore they were listed or
included in the defaulters. In Qadam Barhao Scheme KE provide leverage to these people that
they would waive off the 50% of the default amount and they are required to pay up the
current bill and the default bill would be distributed into installments. For each payment of
installment, the next other installment was wave off, this is how KE was able to restore the
50% of the due amount that was from high loss areas.

Project Surbulandi was to empower and upliftment of society and to provide opportunities to
the people of high loss areas to spread awareness among the people. Secondly, KE noticed
that the ones who wanted to pay out their dues but due to not having access to a bank in the
areas were unable to pay their bills i.e., people to need to travel around 10km to 12 km to
have access to banks. To cater to this problem KE launched IBC on the wheel that was
employees were sent to these areas to collect the bill and these employees visit the areas
twice a month so that the bill was collected on time.

KE started to use Arial bundled cable (ABC cable) that were theft-proof to reduce the number
of electricity theft too.

11. Societal Impact

11.1. As An Employee

As an employer, K-Electric is an equal opportunity employer. The company considers it as its

duty to create a platform for the prosperity of the differently-abled members of the society.
The company inducts unsighted individuals in its customer care department and trains them
to operate ERP systems without their sightlessness becoming an obstacle. Currently, many
such individuals are a part of the 118-response team.

The company has inducted women in various management and non-management roles. The
company prides in promoting the women of Karachi and providing them a path towards
independence and self-sufficiency. A recent move by the company, was to induct women in
its meter reading team. The initiative was conducted in areas of Lyari, Korangi and Malir and
local women of these areas were hired. This initiative was met with praise from the locals and
has become a benchmark of supporting women empowerment.

11.2. As A Service Provider

K-Electric has completely transformed itself in a customer-centric service provider. The

company has been taken initiatives which support customers and are adding to their
feasibility.
Universal customer care centres or Integrated Business Centre (IBC) is one of these steps.
These revamped customer care offices are universal in the sense that any customer can visit
any of the 30 IBCs spread all over the city to register their problems. This is a one stop shop
for all billing, technical, and new connections related customer issues. Another one of such
measures was the introduction of IBC on Wheels. This step was taken to promote bill-
payments in city outskirts where there are no bank branches. Under the moniker of
Sarbulandi, this initiative includes payment collection vehicles to visit such areas to facilitate
the customers.

To discourage the use of illegal networks, K-Electric has simplified the process of obtaining a
new connection as a part of its customer focused strategy. Now residential customers can get
an electricity connection in as little as 15 days. To further add to customer ease, the company
has segmented areas according to their loss profiles and segmented load-shed schedules in
order to ensure no area faces prolonged power outages.

As a part of its digitalization initiatives, KE has launched the KE Live! App which is set to
modernize traditional customer care landscape. Now customers can register their problems
on the application as per their convenience and get prompt responses to all their queries. To
introduce the residents of Karachi to online and digital payments, K-Electric has been
partnering with digital channels such as Bykea, Daraz, HBL and others to offer digital payment
options. To further promote these convenient initiatives, consumer promotions are offered
to educate and encourage the residents of the city.
12. Agile Management
A core part of the change process is being flexible and admitting our mistakes as the first step
to redirect our approach towards success.

The nature of K-Electric’s business practically forces the company to incorporate agile
management in its processes. After its restructuring under the Abraaj Group regime, KE has
proactively designed its functions for stability and dynamism. The company’s operating model
possesses the ability to swiftly and efficiently redirect the strategy, structure, processes,
people, and technology towards creation and protection of value adding opportunities.

Strategy

KE has been committed to providing safe, reliable and efficient energy solutions to its
customers, and the company’s strategy effectively reflects the customer centric stance.
Therefore, the company takes measures for capitalizing on all available opportunities to
better be able to serve the people of Karachi. An example of such an initiative would be the
leveraging of public pressure into receipt of approval from government authorities for
expansion of KE’s network. The company remains dedicated to its customers.

Structure

The company’s structure is clear with accountable roles to discourage overburdening of

employees. With the introduction of opt-in teams and partnerships, the company provides
employees with the opportunity to assign themselves tasks in line with their career objectives.
Recently, K-Electric has been moving towards a flat organizational structure and self-
managing teams to maximize productivity. Although the company is not planning to shift
towards a Holacratic structure, it is definitely moving away from the traditional lines of
authority structure.
Processes

Having faced enough disruptive scenarios, the company designs its plans to be flexible and
responsive. As stated earlier, the company operates in an environment where its decisions
are taken by government and regulatory bodies. With uncertain climate and sharp demand
changes, the company often finds itself in hot waters. Therefore, the company remains on
the lookout for new opportunities in order to maximize the efficiency of its systems. For
example, after the devastating monsoon spell of 27th August 2020, K-Electric was able to
utilize its streamlines processes to draft a supplementary budget of PKR 9.5 Billion to uplift its
network in preparation for next year’s monsoon.

People

The company believes in empowering the staff by trusting them with decision making. This
not only displays the company’s trust towards its staff, but also helps in keeping an eye out
for inefficiency. K-electric aims to foster the entrepreneurial spirit of its highly skilled staff by
encouraging employees to take initiatives and propose ideas. The company organizes strategy
camps and brainstorming sessions to maximize the utility of its human capital.

Technology

Ever since the company’s corporate turnaround, incorporating digitization in all processes has
become a priority. Management is putting in effort to designing systems which complement
new technologies. Moreover, the staff is being trained to propose/craft solutions for the 21st
century. An example of forward-thinking initiatives would be the introduction of multi-fuel
generation plants which can be operated using gas and furnace oil; ensuring continuation of
operation in case of shortages.
13. Implications of COVID-19
The COVID-19 pandemic has caused unprecedented shocks to the global economies including
Pakistan. Like other companies, KE was also severely impacted by the pandemic which
significantly exhausted the company’s fiscal capacities, and the same is likely to persist going
forward.

Some of the issues faced by the company during the lockdown, and their respective responses
are as under.

13.1. Remote Operations

As the city-wide lockdown was imposed in the last week of March, K-Electric had to move its
processes towards remote operations. While the management staff would adjust to the new
normal, the field staff was the most effected by the transition. The limited scope of operations
resulted in delays and defaults as many customers were unable to pay their bills due to the
crisis.

To resolve these issues, the company introduced a number of recovery measures to facilitate
customers. These included instalments and waivers of late bill payment.

13.2. Employee Centricity

To emphasize on the physical and mental wellbeing of its employees in the uncertain
situation, KE launched a series of initiatives including online exercise and yoga sessions.
Currently, KE locations are being equipped with training facilities for benefitting its onsite
employees.

In order to prioritize employee health and wellbeing over everything else, the company
created a policy to still hold all meetings on MS Teams to minimize physical contact.

13.3. Flat Structures

To avoid employee exploitation during WFH period, the company started its transition
towards flat organizational structures. This empowered employees in selecting their
assignments and seeing them through without being micromanaged.

As in the case of remote meetings, the flat organization concept has also been retained after
the end of first wave of COVID-19.
14. Unprecedented Rains
While rains may be a delaying factor for most businesses, they play a significant role in the
performance of a utility company. Rains and urban flooding can disrupt and damage the
sensitive electricity infrastructure. The onslaught of rain received during 27th-28th August was
no different.

During various spells of the Super Monsoon in July and August 2020 Karachi had already
received more than 500mm of rain. The earlier three rain spells of July were as per previous
year’s trend, where the total rainfall recorded was around 150mm. August 2020 brought
more intensity and the first three spells recorded around 350mm of rain, which already
created problems of waterlogging impacting the feeble infrastructure of Karachi. August 2020
became the month which received the most rainfall since 1931, breaking the 90-year record
previously standing at 298.4mm in 1984.

The ongoing Super Monsoon continued with a record-breaking rain spell on the 27th August,
2020 – 224mm of rain recorded in just 12 hours. Previously, 211mm in 24 hours was recorded
in 1967 to create the record for most rainfall received in a single day in Karachi. The previous
record-breaking rain had fallen in double the time of the rain of August 27th.

Following are some of the problems faced by the utility during the rains.

14.1. Submerged Infrastructure

Road levels had been clogged with rain water compromising K-Electric’s sensitive assets. The
submerged infrastructure created a problem in resuming operations as it created a safety risk.
14.2. Connectivity Issues
Weak/unavailable cell phone reception created communication limitations. Operations
centres were unable to communicate with fleet and direct them towards the problematic
areas. Maintenance vehicles had to come back to the centre to get the information of the
next fault.

14.3. Lack of Flood Resilience

The rain showed everyone the nature of preparation by the Karachi’s civic bodies. Inadequate
dewatering equipment by the city’s administrative bodies created bottlenecks for resuming
operations. It also creates a need for the requirement of Disaster Management planning.

14.4. Old Underground Feeders/Cables

The company has realized that the underground cables have been damaged time and again
by the reckless construction conducted by housing societies. These cables have repaired with
multiple joints over the years. This has damaged their quality. Standing water further
deteriorated the condition of cables.

14.5. Commuting Issues

Lack of public transport resulted in team formation issues. Submerged roads added to the
problem as employees at home were not able to reach their offices.

14.6. Measures Taken by K-Electric

Following are some of the measures taken by the company to prepare for similar situations
expected during next year’s monsoon.

• Dedicated PKR 9.5 billion for rehabilitation & rain emergency

• Uplifting & upgrading existing network
• A number of technical solutions have been planned including waterproofing of
substations
15. Planned Improvements
Restructuring has given K-Electric a new outlook. The company has exempted over 70% of the
city from load shedding. It is now moving forward with renewed vigour. KE has planned
investments to move into surplus scenario by 2023. These investments will undoubtedly
improve network reliability and resilience.

The company is working to exempt as much of the city from load shedding as possible by
investing in high loss areas and converting them to low loss. It is also working to educate
consumers on the risks of using illegally sourced electricity. Even though the company often
faces backlash during its operations, it continues to work for this city and its people.

The company has the consumers’ best interest at heart and the centre of all of its operations.
K-Electric has also been taking initiatives to improve its public image via active social media
marketing.

From a cultural point of view, the company is now incorporating employee-centricity to its
strategy. In the future we can see the company prioritize its employees over other factors.
This long overdue step is being taken to acknowledge the dedication of the hardworking staff.
The company aims to move forward with a fresh perspective and become a model work place
offering an encouraging, motivating, and inspiring work environment. K-electric has recently
been the recipient of a number of employee engagement awards which prove that the
company is moving towards its new objective.