EPPO: Pioneering Smart Cities and Sustainable Solutions in Brazil

The RenDanHeYi model, developed by Haier Group CEO Zhang Ruimin in 2005, is revolutionary management philosophy aimed at transforming traditional hierarchical corporate structures into highly adaptive, customer-centric ecosystems. Rooted in the belief that employees (Ren) and their entrepreneurial capabilities should align with customer needs (Dan) to create value, the model emphasizes individual accountability and dynamic organizational roles (HeYi). By dismantling conventional silos, the RenDanHeYi model fosters a network of autonomous micro-enterprises within the larger corporate entity, transforming the organization into a nimble startup factory.

To develop and share the idea of Zero Distance and its broader management philosophy of RenDanHeYi, Haier hosts an annual forum to celebrate the world's most progressive organizations. This September marks the 8th edition of the forum, taking place in Haier’s hometown, Qingdao, on September 20. Working with the Business Ecosystem Alliance and the Management Lab, the Haier Model Institute will release the inaugural listing of the progressive companies which are putting Zero Distance and related ideas into practice.

These organizations are characterized by:

• Zero Distance to customer | Decision what to build is based on insights from the marketplace

• Autonomy | Small teams with full decision-making autonomy enable speed in execution

• Shared Rewards | Everyone in the micro-enterprise participates in its financial success

For the 2024 inaugural ZeroDX awards, Haier approached us to list 50 self-managed organizations that showcase the principles of RenDanHeYi in how they organise their work. EPPO is one of the 50 organisations we listed this year.

Introducing Eppo

Founded in 1995, EPPO is a pioneer in the field of Smart Cities in Brazil, specializing in providing innovative solutions for both public and private sectors. Initially focused on waste collection and civil construction for the public sector, EPPO has expanded its service portfolio to include the operation and management of waste treatment plants, water and sewage systems, eco-efficient buildings, and intelligent lighting. These services contribute to creating sustainable urban environments. Headquartered in Itu, São Paulo, EPPO’s contract with the city, its longest and most significant, spans over 25 years and involves the development of advanced waste-to-energy treatment plants. With an annual revenue of approximately $40 million and a workforce of 1,000 employees, EPPO serves a population of 700,000 people, directly impacting communities and fostering a more sustainable future. EPPO’s mission is to develop eco-efficient solutions while ensuring profitability and sustainability, deeply embedding the values of innovation, responsibility, and community engagement into its corporate culture.

EPPO has emerged as an excellent example of RenDanHeYi in Brazil through its decentralized structure, distributed authority and shared rewards mechanisms. These underline a commitment to act in the best interest of all stakeholders.

Decentralization and Self-Management at the Core

EPPO’s organizational structure reflects its commitment to decentralization and self-management. The company transitioned to a self-management model in 2020, under the guidance of its CEO, Rodrigo Ventre, who implemented reforms inspired by the principles of Anthroposophy and progressive organizational practices. The company moved away from traditional hierarchical structures, embracing self-managed teams known as circles. These circles operate autonomously, with decision-making authority distributed among employees rather than concentrated at the top. This shift towards decentralization required overcoming significant challenges, including resistance from some managers who feared losing power and the complexity of redefining roles and responsibilities within the organization​.

The self-management model at EPPO is based on three key principles: self-development, self-management, and business profitability that benefits all stakeholders. This approach empowers employees to take ownership of their work and contribute to the company's strategic goals without the need for constant supervision. As part of the transformation, EPPO restructured its operations, eliminating unnecessary positions and reducing bureaucracy, which resulted in significant cost savings. For example, the company saved R$3 million annually by streamlining its processes and decentralizing authority.

Customer-Centric Approach Enhanced by Decentralization

EPPO’s decentralized structure has directly contributed to its strong customer-centric approach. By granting employees greater autonomy, EPPO has created a more responsive and flexible organization capable of meeting customer needs more effectively. Employees are encouraged to take ownership of their customer interactions and make decisions on the spot, reducing the delays that often occur in more centralized organizations. This is particularly important in EPPO’s public-private partnership projects, such as its collaboration with the city of Itu. Here, EPPO’s self-managed teams are able to address local issues, manage waste efficiently, and deliver innovative solutions like converting waste into energy and gas, contributing to both environmental sustainability and community well-being.

Furthermore, the self-management model has improved communication with clients, as it allows employees to address concerns quickly without having to navigate through layers of management. This level of responsiveness has helped EPPO maintain long-term relationships with clients and position itself as a trusted partner in the Brazilian market for smart city solutions. EPPO's customer-first mindset is also reflected in its commitment to innovation, as the company constantly seeks to improve its services and offer cutting-edge solutions in waste management and sustainable urban infrastructure.

Fostering a Progressive Company Culture

EPPO has cultivated a progressive company culture centered on self-management, transparency, and continuous personal and professional development. The company offers a range of programs designed to foster employee growth, including the "Leader of Yourself" initiative, which encourages individuals to take charge of their personal and professional development. Additionally, EPPO has implemented the "Theatre" program, which allows employees to engage in self-expression and creativity, promoting a holistic approach to work-life balance and emotional well-being. These initiatives are part of EPPO’s broader effort to create a humanized workplace where employees feel empowered and supported .

EPPO’s commitment to equity is also reflected in its remuneration policies. The company has introduced profit-sharing mechanisms that align employee incentives with the organization’s success, ensuring that everyone benefits from the company's profitability. This approach not only fosters a sense of ownership among employees but also reinforces their commitment to the company’s goals. In terms of employee recognition, EPPO was named one of the best companies to work for in Brazil, receiving several awards for its workplace culture and employee well-being.

Additionally, EPPO is in the final stages of obtaining B Corp certification, which recognizes companies committed to building a more inclusive, equitable, and regenerative economic system. This certification underscores EPPO’s dedication to social and environmental responsibility, further solidifying its reputation as a leader in sustainable business practices.

Conclusion

EPPO stands as a shining example of how a company can successfully integrate innovative governance models, customer-centric strategies, and a strong commitment to sustainability to create value for all stakeholders. Through its journey of adopting self-management, EPPO has overcome significant challenges and emerged as a more agile and customer-focused organization. Its ongoing commitment to employee development, equitable business practices, and environmental stewardship continues to drive its success and position it as a leader in the Brazilian market for smart city solutions. As EPPO continues to expand its impact, its pioneering approach to business offers valuable lessons for organizations worldwide seeking to balance profitability with purpose.