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Customers 26 | 4TH - 10TH SEPTEMBER 2015 | UTILITY WEEK Analysis H e had such high hopes. Paul Massara set out to turn around Npower's cus- tomer service on stepping into the role of chief executive in January 2013, but last week he finally conceded defeat. Specu- lation about his departure had been swirling since the start of the year, and the rumours became louder with the publication of the company's latest bruising financial results earlier this month Massara, a well-liked figure, made a gra- cious exit, saying he was leaving "by mutual consent". He posted on social media: "I am extremely proud of the Npower team and everything we have achieved to date. We have made progress and built a strong foundation but most importantly we have changed the culture to one of being totally committed to customers." For its part, RWE politely thanked Mas- sara and chief financial officer Jen Madrian, also departing, for their contribution. So just what went wrong for Paul Massara? That customer service pledge His pledge in January 2013 to take Npower from the bottom to the top of customer service tables by the end of 2015 was hugely ambitious, and as it turns out overambi- tious. At the time, Npower had just received a score of 39 per cent in a Which? customer satisfaction survey, placing it bottom of the big six. Utility Week understands that staff struggled to buy in to Massara's loy aspira- tions, losing motivation in working towards a "fantasy". In March, Npower admitted the target was unlikely to be hit. Billing system woes Npower implemented a new billing system in May 2013. It could have been the panacea for its customer service issues, but instead the move from three separate regional sys- tems to one new billing system created more problems. It resulted in some customers not receiving bills for up to a year, while others received inaccurate bills or bills for accounts that weren't their own. Massara's overhaul of the system pushed costs "higher than expected" but did little to stop the com- plaints coming in. Ofgem steps in As a direct result of the billing system change, customer service levels suffered "serious deterioration" to a level Ofgem declared unacceptable. The regulator inter- vened in December 2013. Massara was forced to apologise to every one of his 3.4 million domestic customers for the company's per- formance throughout 2013. He claimed "good progress" had been made, paid out £1 mil- lion to charity by way of recompense, and promised to make amends by spring 2014. A year later, Ofgem stepped in again. Last month the regulator secured free energy for 1,000 Npower customers with unresolved ombudsman complaints. Npower said it was continuing to improve customer service and that while some complaints were outstand- ing, overall ombudsman complaints were down 10 per cent since the start of the year. Disastrous H1 results The final straw was the financial impact on the business. Parent company RWE's first half year results earlier this month revealed just how bad things had become for Npower. Profit more than halved since the beginning of the year to just £38 million, from £109 million. It was a "steep decline" resulting from 300,000 customers leaving the sup- plier. RWE's UK profit was slashed by £11 million to £24 million, with the remaining profit mainly coming from Npower's busi- ness arms. Massara admitted that customer systems were to blame, conceding that the challengers were "tougher than expected". Eleven days later, he was gone. What next? Paul Coffey is the man tasked with turning Npower's fortunes around. Reportedly a dynamic, driven and capable leader, Coffey burst on to the RWE scene ten years ago and is well respected within the wider group. A source tells Utility Week that Coffey has been headed for the chief executive position for the past two years, with his most recent role as chief operating officer a training mission for the eventual top job. RWE's chief executive, Peter Terium, says Npower needs a chief executive who "has a track record of implementing operational process changes. Paul Coffey has repeatedly demonstrated this expertise". However, two major challenges stand in his way. First, despite his many years in the energy sector, Coffey has little experience of running a domestic retail business with 5,000 staff. Getting to grips with the organi- sation's size will be job number one. Dealing with head office in Germany will be chal- lenge number two – how much autonomy will he get? End of the road for Massara Npower's chief executive was well liked, but last week parent RWE lost patience with him after a string of customer service problems and a dismal set of financial results. Lucinda Dann reports. RWE SHARE PRICE, THREE YEAR (EURO) 34 30 26 22 18 14 1 Jan 2013 1 Jan 2014 1 Jan 2015