Innovation And Risk Management

Running header: Pinwheel risk management action.

Pinwheel risk management action.

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Pinwheel risk management action.

Executive summary.

Risk management is a crucial aspect of any business organization. The success of any

business depends on its ability to manage and control the implications of risks. Various tools of

risk management are used by different organizations to improve their risk management operations.

Pinwheel risk management framework is one of the risk management tools used by different

organizations. Pinwheel provides a comprehensive 8-steps framework that will assist business

organizations in managing risks and optimizing returns. Pinwheel risk management framework is

often considered as the most effective risk management tools since it’s easy to understand and

implement.

Introduction.

Risk can be defined as a chance that the return of an investment will differ from the

expected return of the investment. Risk may also create the possibility of losing the original

investment. Risk is often caused by different events or changes in circumstances revolving an

investment. For a business to control the risks that could lead to adverse effects, it is crucial to

have an effective risk management framework.

A risk management framework for an organization is a comprehensive description of the

specific functions and activities that define the risk management system within the organization.

Risk management framework is used by an organization to define time and processes used in

managing risks. There are various characteristics of a good risk management framework. One of

the characteristics is that the risk management framework ought to be transparent and easy to

Pinwheel risk management action.

understand by all the stakeholders. The risk management process is also supposed to make the risk

management processes more efficient.

Pinwheel risk management framework of Shell Energy Company.

The pinwheel risk management framework provides a process which integrates activities

and process of risk management and security into the system development cycle of an organization.

Shell Energy Company has used the pinwheel risk management factor in its operation to remain

competitive in the energy industry. The success of any business is influenced by different factors

depending on the business. However, with effective risk management factor and execution, Shell

Company can develop a deep understanding of the business environment in the energy industry

including the risks, ability to innovate and adapt. By using the pinwheel risk management factor,

Shell can design innovative ways to adapt to the business environment (Hull, 2012).

The CEO of shell energy and other executives of the company can successfully use the

pinwheel risk management factor to reduce the risks that the organization faces. Shell, which is a

multinational gas company has its headquarters in Netherlands. The company can use the pinwheel

risk management framework action to ensure that the ultimate goal of the company is achieved.

Through the pinwheel risk management factor, the company can be most successful energy

companies in the world. This is because the pinwheel risk management framework action can be

used to convince the leaders of the company on how the risk management strategies are crucial to

the success of the organization. Shell can use the pinwheel risk management framework to mitigate

risk and control the effects of the risk to the business. This will lead to increased transparency in

the operations of the company and also improve strategic planning within the company (Anthony,

2013).

Pinwheel risk management action.

The following is a pinwheel of Shell.

Steps for implementing the pinwheel risk management framework

There are different steps of implementing the pinwheel risk management framework. Shell

followed the steps in evaluating the risk management framework.

Step 1: Evaluating business intelligence

Pinwheel risk management action.

This is the first step in implementing the pinwheel risks management framework. The first

step entails understanding the global business conditions and trends. Understanding the two

concepts is crucial to governance and strategic planning of the company. Shell, being a

multinational organization had to study and understand the emerging issues in the energy industry

to avoid many risks that would have had adverse effects on the company. Some of the risks that

face Sell Company in the evaluation of business intelligence stage is selling substandard oil and

gas products. This is a high risk that the company has to avoid to maintain its customers. Various

tools are used while conducting an external review of a company. Shell energy can use PESTEL

and SWOT analysis in conducting a thorough review of the external factors of the company. Some

of the external factors that affect how the energy company operates in different countries include

the political stability, technology, and level of competition in those companies. Also, while

evaluating business intelligence, it is crucial to consider the actions that the company could take

to affect the regulations that could affect its brand (Broder, 2012). Some of the things that the

company should consider include ensuring that all its retail outlets in all countries sell products of

the same quality. Homogeneity of the products shows that the products are standard and according

to the aspirations of the company. Using the PESTEL and SWOT analysis as strategic tools enable

the company to focus on their capabilities while working on the weaknesses. The tools provide the

company with challenges and possible solutions to the problems facing the company. SWOT

analysis for instance provides the opportunities that the company can explore thereby increasing

its customer base.

Step 2: Refining strategic purpose and vision.

Pinwheel risk management action.

Shell can use this step to give opportunity to revise its purpose, strategic priorities, and

vision which are critical to governance strategy of the company. Shell has clear vision, purpose

and strategic priorities that enable the company to compete effectively with other global players

in the energy industry. Refining strategic purpose and vision is a very important step in the

implementation of the pinwheel risk management framework.

Step 3: Defining goals and aspirations

This is the third step of the pinwheel implementation process. Since the company’s strategy

is to reinforce its position as the leader in gas and oil industry, there are various aspirations that

the company has for the next 10 years. Some of the goals and aspirations and goals of the company

include affordable and clean energy. Due to the changes in climate change that result from

excessive use of gas, the company can implement the pinwheel risk management framework action

to offer clean energy with minimal effects on the environment. Industry innovation and

infrastructure is another goal of the company. Climate action and other sustainable development

goals allow the company to define its goals and direction. The company also aspires to have its

branches in every corner of the world to serve the maximum number of consumers (King, 2016).

All the aspirations of the company can be realized if the company is able to implement the

pinwheel risk management framework as a way of mitigating the risks experienced in different

stages of operations.

Step 4: Developing strategic priorities.

In Shell, the CEO and other executives of the company have the responsibility of strategic

priorities for the company. Strategic priorities are crucial for the company since they assist the

Pinwheel risk management action.

company in achieving its aspirations. This step is important in the implementation because it can

help the company in determining the subsequent operations and allocation of resources. Some of

the strategic priorities for Shell include becoming a leader in providing gas and oil in the world.

Other priorities for the company include relentless focus on the consumers. Gas and oil products

have negative effects on the environment. The company can use this step in remaining focused to

the complaints of the consumers to ensure that the consumers are satisfied with the products

provided by the company. Enhanced distribution of its products is another strategic priority for

Shell. The company can set its strategic priorities right in a way that it will be easy to realize the

set goals and aspirations. Innovation is another strategic priority that will enable the company beat

its competitors in the energy industry. Shell was a company established many years ago. The

company’s brand and cultural alignment is one of the strategic priorities that the company can use

to increase the number of consumers and also expand to different parts of the world.

Step 5: Identification of critical initiatives.

Through the company’s CEO, Shell Company can use pinwheel risk management

framework to identify initiatives that are fundamental and ensure the purpose and vision of the

company are maintained. The CEO can make some consideration in determining the critical

initiatives for the company. Some of the considerations that the leadership of the company has to

make is in regard to which initiatives and investments that are crucial for the successful execution

of the company’s strategy and ultimately achieving the set goals and objectives of the company.

Another consideration is with regard to the key financial and non-financial metrics that drive the

performance of the company. The CEO and the top leadership of Shell also have to determine the

operational and compliance risks of the initiatives before implementing them (Berman, 2014).

Pinwheel risk management action.

Step 6: The integration of the projects, operational plans of the projects and the

budgets of implementing the projects.

While implementing the pinwheel risk management framework for Shell Energy

Company, detailed projects that the company is taking can be incorporated into the operating plan

in place and use a one-year budget to monitor how the projects are performing. This stage can help

the company to determine the key project milestones and measures. This step of pinwheel risk

management framework can help Shell consider both the financial and non-financial aspects of

performance indicators by the projects implemented. At this stage, the company can identify the

risk indicators that need to be monitored. Monitoring and controlling the effects of risk would help

the company keep the risks at a minimum level. To ensure that the company is in line with its

aspirations, the company can compare its trajectory plans to the long-term goals of the company

and the performance of the competitors in the industry.

Step 7: Monitoring the critical initiatives

Monitoring the critical initiatives is crucial because it could allow the company to evaluate

and monitor the investment initiatives which is critical in the process of mitigating risk. This step

can allow the company to manage risks and control the impact of the risks to the organizations.

Shell can use the pinwheel risk management framework to become the leader in gas and oil

provider in the energy industry because it could help the company to monitor and manage the risks

that could adversely affect the company.

Pinwheel risk management action.

Step 8: Assessment of strategic performance.

For a multinational company like Shell, it is paramount to have effective governance in

the company to be able to mitigate risk. Effective governance can be used by the company to ease

the execution of leadership strategies. In assessing the strategic performance of Shell, the board of

directors of the company can consiser various factors of controlling and reducing the impact of

risk such as essential information needed in evaluating strategic evaluation. Other factors that the

board of directors of the company should consider during the last step of implementation are the

risks to the achievement of long-term goals and risks related to conforming to compliance and

reporting.

Pinwheel risk management framework in action at Shell.

In developing and implementing pinwheel risk management framework, Shell streamlined

its efforts in keeping its governance strategy aligned to risk and reward. Operating a multinational

company requires comprehensive risk management framework that would assist the company in

monitoring and managing risks that would have adverse effects ton the operations of the company.

Shell, through its CEO, focused on strategic risk management which would keep the organization

focused on its goals and aspirations by quantifying and managing risks. Implementing pinwheel

risk management framework was achieved through continuous discussions regarding the risk

management framework that would solve the problems that the company was experiencing

(Marcia, 2012).

The interaction between the CEO and other top officials of the multinational firm led to

changes in the organization, and the pinwheel risk management framework was designed and

Pinwheel risk management action.

implemented. The implementation of the risk management framework was driven by the need to

create a sense of ownership amongst the stakeholders. There are various ways in which the

company keeps the pinwheel risk management framework operational. One of the ways is through

its CEO who is tasked in fostering transparency and teamwork within the company. The CEO

ensures that the information that reaches the board of directors is in the best interest of the company

and ready for implementation. The CEO can also assesses the critical initiatives that the company

has before allocating any resources. The pinwheel risk management framework requires the CEO

to assess the critical initiatives that will ensure that the company is focused on its goals and

aspirations (Ascher, 2015). Shell can implement the process of innovation to its risk management

framework of the company’s top management which has the responsibility of aligning and

integrating the different function is the organization by implementing the strategic plan.

The role of management accountants.

For the successful implementation of pinwheel risk management, management accountants

play an important role. It is the role of the management accountants to identify what the consumers

of gas and oil industry want. The management accountants also have the role of determining where

the competitors are operating and expanding. Management accountants use competitors to gauge

how the company’s strategies have been implemented and whether the strategies are aligned with

the resulting demands of the consumers.

Another crucial role of management accountants at shell Energy Company is to align the

different functions within the company to ensure smooth operation. It is also the duty of the

management accountants to ensure there is sufficient budget allocation to the investment initiatives

that would assist the company in realizing its goals and aspirations. Implementing the strategic

Pinwheel risk management action.

plan will assist the company in realizing its set objectives and aspirations. Pinwheel risk

management framework also assists Shell in accommodating changes that might occur. This is

because the risk framework has a model that is resiliently allowing the company to achieve its

goals and aspirations.

Conclusion.

Pinwheel is no doubt one of the most effective tools used in managing risks. For

organizations like shell, using pinwheel risk management framework can successfully aid in the

expansion of the company and management of risks involved. Pinwheel has a lot of benefits to an

organization that implements it following the laid down steps. However, the success of pinwheel

risk management framework depends on whether the steps of implementation are followed.

Pinwheel risk management action.

References

HULL, J. (2012). Risk management and financial institutions. EBL. New York, Wiley.

ANTHONY SAUNDERS; MARCIA CORNETT, 2012. FINANCIAL INSTITUTIONS

MANAGEMENT: A RISK MANAGEMENT APPROACH. NEW YORK: MCGRAW-HILL

EDUCATION.

IANSITI, M., & SINOFSKY, S. (2013). One strategy: organization, planning, and decision

making. Hoboken, N.J., Wiley

BRODER, J. F., & TUCKER, E. (2013). Risk analysis and the security survey. Waltham, MA,

Butterworth-Heinemann.

ASCHER, W., & OVERHOLT, W. H. (2015). Strategic planning and forecasting: political risk

and economic opportunity. New York, Wiley.

BERMAN, B., & Evans, J. R. (2013). Retail management: a strategic approach. Boston, Pearson.

THOMPSON, J. L. (2017). Lead with a vision: managing the strategic challenge. London,

International Thomson Business Press.

KING, W. R. (2015). Planning for Information Systems. Hoboken, Taylor, and Francis.

Pinwheel risk management action.

JOHNSTON, R. E., & BATE, J. D. (2003). The power of strategy innovation: a new way of linking

creativity and strategic planning to discover great business opportunities. New York, AMACOM

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