Enterprise Risk Management at Fermilab Erik Gottschalk erikfnal

Enterprise Risk Management at Fermilab Erik Gottschalk (erik@fnal. gov) Head, Office of Integrated Planning and Performance Management 17 November 2016

Overview • Enterprise Risk Management (ERM) at Fermilab • Risk terminology Based on “Risk Management – Principles and Guidelines” (ISO 31000) • Risk management – features, forums, people • “High” rank enterprise risks • Strategic Planning and Risk Management Framework • Fermilab strategic plan • Project risks (DOE O 413. 3 B projects) • Operations risks • Enterprise risks • Integration with DOE and ERM Working Group • Summary and Next Steps 2 11/17/2016 Erik Gottschalk | Enterprise Risk Management at Fermilab

Risk Terminology • Risk: Effect of uncertainty on objectives. • Enterprise Risk: Effect of uncertainty on strategic objectives of the organization. • Enterprise Risk Management (ERM): Processes to identify, analyze, mitigate and respond to risks that may impact lab goals and lab objectives. Risk grammar: If RISK occurs then IMPACT jeopardizes OBJECTIVE 3 11/17/2016 Erik Gottschalk | Enterprise Risk Management at Fermilab

Fermilab Risk Management – Features, Forums, People • Features: • Lab-wide risk register for DOE O 413. 3 B projects, and lab operations • Database with a web interface for managing lab goals and objectives, lab activities, achievements, enterprise risks, project risks, and operations risks • • Database developed during the last two years (3 strategic planning workshops) • Integration of enterprise, project, and operations risk management (in progress) • Integration of strategic planning and risk management (in progress) Risk Management Board established for operations risks (pilot), similar to what is already done for project risks • Forums and People: 4 • We participate in the ERMINE international forum of senior risk managers • Keith Molenaar (Professor of Construction Engineering Mgmt; U. of Colorado) • Lucas Taylor (Ph. D. Particle Physicist; Fermilab Risk Manager) • Anne Kerhoas (Physicist, Engineer, MBA; CERN Enterprise Risk Management) 11/17/2016 Erik Gottschalk | Enterprise Risk Management at Fermilab

Enterprise Risk Register– “High” rank risks • Process: • 164 risks identified by interviewing lab senior management and DOE site office • Risks were analyzed to produced a consolidated list of 47 risks • Risk tolerance matrix was developed with help from Keith Molenaar • Probabilities and impacts were assessed using the risk tolerance matrix • Risks are ranked based on probabilities and impacts • “High” rank risks are owned by the Lab Director: 5 11/17/2016 Erik Gottschalk | Enterprise Risk Management at Fermilab

Fermilab Strategic Plan “Science and Technology Strategy for the Future” ( http: //go. usa. gov/xk. AYf ) 6 11/17/2016 Erik Gottschalk | Enterprise Risk Management at Fermilab

Fermilab Strategic Planning and Risk Management Framework ERM TBD Enterprise Risk Management ERM Process TBD Accelerator Science Computational Science Cosmic Science PEMP Process Lab Operations Risk Registers • Scope • Cost • Schedule LHC Science Neutrino Science Precision Science PEMP Goals Lab Goals (26) Lab Goal 1 Lab Goal 2 Lab Goal 3… Lab Objective 1. 2 Lab Activity X Erik Gottschalk | Enterprise Risk Management at Fermilab Lab Activity Y Project Risk Pr 01 Project Risk Pr 02 PEMP Goal 1 PEMP Goal 2 PEMP Goal 3… PEMP Objectives Lab Objectives (86) Lab Objective 1. 1 7 Performance Evaluation and Measurement Plan Major Initiatives (Science) Enterprise Risk Register • Science • ES&H • Finance • Reputation DOE O 413. 3 B Project Risk Registers • Scope • Cost • Schedule PEMP DOE & Science Community (HEPAP/P 5) Lab Objective 2. 1 Lab Objective 3. 1 Lab Activity Z Operations Risk Op 01 Operations Risk Op 02 PEMP Objective 2. 1 PEMP Objective 2. 2 Notable Outcome 2. 2. 1… Achievement A Achievement B Lab Achievements Lab achievements reported annually to DOE 11/17/2016

Summary and Next Steps Summary • We have established lab-wide framework for managing project and operations risks at Fermilab • Integration with lab strategic planning and enterprise risk is underway Next Steps • Integration with DOE enterprise risk management Ø Standardizing ERM across the DOE will be challenging. For example, at Fermilab we have a quantitative approach to defining probabilities and impacts that is standardized across the laboratory (i. e. risk tolerance matrix). Ø Imposing a different standard on the lab (i. e. different approach to defining probabilities and impacts) will influence risk assessments and risk ownership • We request that the ERM Working Group engages the labs on developing standard quantitative definitions for risk probabilities and risk impacts. 8 11/17/2016 Erik Gottschalk | Enterprise Risk Management at Fermilab