British Gas: Innovation and Risk Management using Pinwheel Framework

This report offers an in-depth analysis of innovation and risk management within British Gas, a leading energy provider in the UK. It examines the company's innovation processes, particularly focusing on the implementation of smart meters and its commitment to customer-centric services. The core of the report centers on the application of the Pinwheel Action Framework, illustrating how British Gas utilizes this framework across eight key steps to align its strategic planning, risk management, and innovation initiatives. These steps include evaluating business intelligence, refining its vision, defining goals, determining strategic priorities, identifying critical initiatives, integrating projects, monitoring initiatives, and assessing strategic performance. The report provides a comprehensive understanding of how British Gas integrates the Pinwheel Framework to drive innovation, manage risks, and achieve its long-term objectives within the competitive energy market.

Running head: INNOVATION AND RISK MANAGEMENT
Innovation and Risk Management
Name of the Student:
Name of the University:
Author Note:

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Executive Summary:
The report gives an overview of innovation and risk management in the light of Pinwheel Risk
Management Action Framework of an energy company. The company discussed in this report is
British Gas. The report provides a brief introduction of the company and discusses about the
process of innovation adopted by the company. The report also has a section where explanation
is provided on the application of Pinwheel Action Framework in the decision making process for
innovation of British Gas.

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Table of Contents
Introduction:....................................................................................................................................3
About the Company.........................................................................................................................3
British Gas and Innovation..............................................................................................................4
Application of Pinwheel Action Framework In the Process of Innovation of British Gas.............6
Conclusion.....................................................................................................................................10
References:....................................................................................................................................11

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Introduction:
The report is a discussion on innovation and risk management in the context of the
Pinwheel Risk Management Action Framework of an energy company. The energy company
chosen here is British Gas that is one of the leading energy and home service provider in United
Kingdom (UK). The report however gives a brief introduction about the company. There is also
discussion on the process of innovation adopted by the company. While discussing about the
company, one can find that the company focuses mainly on the implementing innovative
techniques that in way is beneficial for its customers at large. There is also a section in the report
where there is discussion about how the decision of British gas for the process of innovation
aligned with the Pinwheel Action framework. The report however ends with a conclusion that
mentions the good practices of the pinwheel framework.
About the Company
The company chosen here is British Gas that is a home service and energy provider in
United Kingdom. The trading name of the company is British Gas Services Limited and British
Gas New Heating Limited, both of which are subsidiaries of Centric (Britishgas.co.uk 2017).
However, the company is one of the biggest energy suppliers that are serving close to twelve
million houses in UK. The company however dominates the electricity and gas market in the UK
and is believed making a difference. British gas however makes a difference through
empowering communities for using energy in an efficient manner, supporting the needs of the
households and builds necessary skills for future service (Britishgas.co.uk 2017). The company
considers its employees as it assets who play a role in driving the company forward. However,
the company has a set of standard that determines the ethical viability of their activities. Further,
British Gas also initiates a procedure of fuel mixing for generation of electricity. Thus, the

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company is trying to focus in building skills required by Britain for attaining a brighter future
and is helping its customers with energy supply, home services and smarter homes.
British Gas and Innovation
The Board Member of the company, Mark Hodges, focused on the changing customer
needs and thereby meeting them through excellent customer service and growth through
adoption of the process of innovation and enhancing the efficiency level as far as possible.
Moreover, Mark Hodges also had an in-depth understanding of the consumer markets and
experienced in improving the business performance of the company (Engerati - The Smart
Energy Network 2017). The man has a record of initiating significant improvements efficiency,
service, innovation, and business transformation even under political and regulatory scrutiny.
The company therefore planned to roll out smart meter as a process of innovation and
initiated the benefits of the customers. In this regard, the company installed close to 1.5 million
meter of which one million finds an installation in the residential properties. However, the
installation of the smart meters gave the customers the following benefits:
1. Assurance of accuracy in bills
2. There is control and transparency since the customers get access to information related
to consumption that helps them in controlling the consumption in a better way. Moreover, the
consumer can view their consumption and gain some efficiency tips.
3. Brought new propositions to the customers by allowing them to remotely get
connected to the meter that not only helps in making the pre-payment process easier but also
ensures more convenience to the customers.

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4. Makes use of new technologies including smart grid, big data and demand side
response.
British Gas also believes in providing rapid service wherein the availability of the assessor is
within ten working days. Moreover, these assessors are not only qualified but also regularly
undergoes evaluation of their competency (Axaconnect.co.uk 2017). The company tries to ensure
that its customer gets value for their money. Further, the company also ensures providing tailored
services for small and large-scale industries.
The company always focused on customer service and ensured providing facilities for
smarter home energy management through its smart meter. Thus, the company makes use of this
new and innovative technology to help the customers and do a lot more as far as consumption of
energy and management is concerned (CGMA, 2017). Thus, the company feels the need of
keeping the customers happy and thus focuses on a shift from the generalized approach followed
for customer service to an approach that is more individualistic creating more customer
convenience and building trust. However, the consumption data from the smart meters provides
more insight to the needs of the customers that will help the company in providing appropriate
services.
Application of Pinwheel Action Framework In the Process of Innovation of British Gas
A company develops the Pinwheel Action Framework for the alignment of wide strategy,
planning and risk processes of the organization (Lees 2017). The strategic and corporate
development team introduced the Pinwheel Action Framework for aligning the processes
undertaken by the executive leaders and CEO within business process unit and subsidiary for
creating culture that would not only foster transparency, alignment and teamwork but also reach

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the employees at every level thereby increasing the focus on the vision and overall mission of a
company. One of the primary elements of the process refers to the consideration of the external
factors that includes market forces, changes to customer buying behavior and regulatory and
economic issues (Chen 2013). However, the management can also play a vital role in the
alignment and integration of various functions within an organization and thus ensuring that their
version of the Pinwheel is resilient and is able to accommodate stress and changes to the
business.
British Gas considers the Pinwheel Action Management while undertaking the process of
innovation using the eight key steps:
1. Step 1: Evaluation of business intelligence for Innovation
This process begins with a comprehensive analysis of the broader trends. This step
focuses on the understanding of the business trends globally and conditions of British Gas. There
is also the necessity for ensuring effective planning and governance for initiating the process of
innovation of the company (Amin et.al 2017). However, an extensive tool used for conduction of
the external forces impact and factors having a potential impact revolves around a pestel analysis
that encompasses the political, economic, social, technological, environmental and legal factors.
2. Step 2: Refining the Vision and Strategic Purpose for Innovation
Once there is a thorough understanding of the external factors and key trends, the next step
followed by the company depends on reviewing and refining the purpose and vision of the
organization (Owaineh et.al 2015). The company believes in making difference through its
process of innovation since they consider serving the communities. The company puts forward
its objectives and strategic purpose for innovation for helping the people who need extra support

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for keeping their house warm as well as working, building the skills that the country requires for
powering the homes and providing enough resources for supporting local causes.
3. Step 3: Defining of the goals and aspirations for Innovation
British gas considers the Pinwheel Risk Management Framework for defining the long-
term aspirations and goals of a company. However, the long-term aspirations are like vital
catalysts on the innovative and disruptive thinking that lies beyond the momentum growth
embraced by the strategic planning frameworks of most of the subsidiaries’ (Webb 2015).
However, there should at least be a gap between organizational aspiration goal and strategic plan.
The company aspires to supply business energy services and commercial services for suiting the
needs of consumers. The company has also brought in the concept of smart meter for its
consumers.
4. Step 4: Determination of the Strategic Priorities for Innovation
This step talks about the strategic priorities defined by the CEO of the company and his
team. The priorities with time thus become the pillars universal for all the subsidiaries and used
by the company for setting itself in motion and achieving the aspirations and goals for
innovation. Tactical or operational planning and resource allocation is used for driving the
strategic priorities (Bilodeau, Podger and Abd-El-Aziz 2014). Although strategy and planning is
a dynamic process, innovation process adopted by the company defines its strategic agility and
cultural change. Therefore, British Gas continuously adopts new initiatives put forward by the
management and the board. This helps the company in achieving its long-term vision and
aspiration. Thus, this step of the Pinwheel framework involves the reviewing of the present
strategy and consideration of the strategic options available alternatively. Moreover, at this step

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of the framework the company also identifies and evaluates the potential threats faced by the
company in achieving its goals. The company also identifies the challenges to the underlying
assumptions and thereby creates scenarios for evaluation of potential impact for alternative
outcomes and developments.
5. Step 5: Identification of the Critical Initiatives for Innovation
This step involves that the strategic priorities undertaken by the company guides the
critical initiatives towards reaching their aspirations (Urciuoli et.al 2014). Critical initiatives
primarily undertaken by the British Gas and are linked towards the reward mechanisms of the
company.
6. Step 6: Integrating Projects, Plans and Budget for Innovation
However, after the identification of the critical initiatives, there is initiation of detailed operation
projects and that are incorporated in the one year budget and three-year operation for tracking
and monitoring performance for the innovation. However, the primary consideration of this step
includes determination of the key milestones of the project and its owners (Badiru and Osisanya
2016). The company also defines the metrics for the indicators responsible for non-financial and
financial performance thereby resulting in the alignment of the incentives with the achieved
targets of the financial and non-financial performance. This also indicates identification of the
primary risk indicators that needs monitoring and at the same time establishing a proper practice
for enterprise risk management across the concerned company.
7. Step 7: Monitoring of Critical Initiatives for Innovation

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Monitoring of vital non-financial performance indicators and the development initiatives
is important for not only the executing a successful strategy but also achieving long-term goals
and realization of the vision of the organization (Jackson et.al 2014). The company also adopts
specific projects that provide a direct support in achieving the critical initiative in addition to
monitoring the budget and operational plans. These specific projects then undergoes subjection
to an analysis of cost benefit across the subsidiaries that is extending over several years that also
include substantial commitment to people resources and material cost.
8. Step 8: Accessing Strategic Performance
The eight step of the Pinwheel Risk Management Action Framework involves evaluation
of the strategic position of the position of organization since the effectiveness in corporate
governance determined by the evaluation of the competitor’s performance and their relative loss
and gain while in the competitive position, market share and brand (Jackson et.al 2013). Thus,
effective governance is determined through a customized strategy for information for the
leadership team and board of directors. Therefore, the information strategy includes necessary
information required for evaluating and monitoring the organization’s strategic execution. The
strategy also focuses on risk for achieving the objectives on a long-term basis (Yusuf et.al 2014).
Moreover, the risk should conform to the reporting requirements in the assessment of the
strategic performance and so the company essentially segregates the performance into
management and external actions.
Conclusion:
The report throws a light a light on the Pinwheel Risk Management Action Framework.
The report here gives an overview of how British Gas has implemented pinwheel framework

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with the decision making for innovation. However, the company has done through eight different
steps. Thus, the Pinwheel framework implemented through understanding of the alignment of the
strategy with risk and reward. The company has also initiated formal process for the
implementation of the framework based on the culture of the organization. In the report, it is
evident that the company has reinforced the desired culture that cascaded to its subsidiaries. In
addition, there has been creation of initiatives for supporting and adopting the framework and the
process. However, the adoption of the Pinwheel framework has helped in aligning the
performance and enterprise risk management. Through the framework, there has been significant
collaboration between the CEO and business units. The framework also helps in clarifying the
role of the management.

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