Program Management is a multidimensional discipline. It can involve a “cradle to grave” multiphase timeline that can include concept development, concept demonstration, design, product/system development, execution, sustainment, and closeout – all of these phases are part of program operations. A characteristic of effective and high performing programs is the attention to continually learning lessons that applied and reapplied as part of program operations.

Effectively capturing and reusing the critical and relevant knowledge of program operations by making knowledge capture, sense making, and reuse a fundamental operating principle, a part of the way the program operates, can substantially reduce operational risk. Said differently, it is about creating, and then sustaining the knowledge capability of the program being executed.

Knowledge Use and Flow

Only when a program can keep its knowledge current, and enable the movement of institutional knowledge across the program so it is searchable, findable, downloadable, and reusable, will the program be able to reduce risks associated with the evolutionary and operational challenges that the program must continually face. An effective and sustainable capability to “perform and learn” will improve program mission performance and mission effectiveness which can then be demonstrated and measured.

Operating Faster Than the Speed of Change

Not all program risks are insurable or preventable. By leveraging experience and insight (knowledge) across internal boundaries within the program, the Program Manager can make higher quality and more timely decisions about the challenges and problems they face based on the learned lessons within their evolving institutional knowledge base.

The Program Manager and their supporting organizations cannot know the answers to all of the risk questions nor how to address all of the risk challenges. But with a solid and sustainable knowledge management framework for institutional knowledge transfer that is part of the fabric of the program, the Program manager can immediately begin to more effectively ask the right questions to address these risks and do this much more quickly.

This is particularly true when dealing with significant change (risk) events that will continually and inevitably impact a program (Figure 1, Change Drives Knowledge Needs). The type of change will drive the knowledge needed. Why is this?

 Change Drives Knowledge Needs  (Figure 1) ©Working KnowledgeCSP

 Programs that routinely and consistently capture and retain knowledge about “the know-how and know-why” of their operations, the decisions they have made about how they have addressed challenges and opportunities in the past, and have enabled an ability for its workforce and leadership to “connect, collect , and collaborate” in addressing these challenges and opportunities will possess the ability to respond quickly to “right the ship “or take advantage of an opportunity for driving a better outcome…to more successfully mitigate and manage the risks facing the program.

When the program faces new or unfamiliar factors that can impact program performance or outside program perceptions, the ability to quickly leverage the program’s institutional knowledge base will improve the ability to more effectively deal with change, increasing the probability that performance will return to a more normal state more quickly…operating faster than the speed of change.

Based on the level of innovation driven by the decisions made and solutions implemented, the program can possibly exceed previous performance levels because the new knowledge created in addressing this change event enables improvements that helped the program execute more effectively.

Knowledge Based Decision Making Can Be The Basis of Operational Risk Reduction

By making sense of successes and failures, about what is effective and what can be done differently next time, and sharing learned lessons and advice across the program , the Program Manager can begin to eliminate risk through more than just trial and error. Going forward, the Program Manager can develop and integrate more effective practices to mitigate the risks faced, now and in the future, rather than just transferring the risk. This also requires the Program Manager to begin to recognize that a lack of a consistent and disciplined framework for knowledge capture, sharing, and reuse is a fundamental risk in and of itself.

 What Is Knowledge –One Perspective

One Perspective of Knowledge (Figure 2) ©Working KnowledgeCSP

“Knowledge” in a program consists of “all of the information” in the program and “all of the experience” in the program. The Program Manager’s ability to successfully solve problems, make effective decisions, and improve program performance is directly related to the ability to effectively and efficiently integrate and apply both information (explicit knowledge) and insight and experience (tacit knowledge). Figure 2, Concept of Knowledge, illustrates this concept of knowledge.

The Program Manager’s ability to effectively integrate both explicit and tacit knowledge within the program so that it is relevant, accessible, and immediately reusable to solve problems, make decisions, and improve performance is critical for the program to effectively deal not only with change, but also with risk.

What is Operational Risk?

Operational Risk is a broad category affecting many aspects of any program. Several groups describe operational risk as “the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events (Culp, 2001).

Risk, in general, is defined by the ISO 31000 (2009) / ISO Guide 73:2002 as the “effect of uncertainty on objectives.” In this definition, uncertainties include events (which may or may not happen) and uncertainties caused by ambiguity or a lack of information. According to the 5th Edition of the PMBOK® Guide, project risk is “an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives such as scope, schedule, cost, or quality.”

Operational risk can be further divided into six categories (Note:  I saw this somewhere a while ago and always kept it and have no idea where I found it):

  • People Risk is the risk of loss associated with the loss of critical knowledge due to retirement or other attrition within a program. Examples include retirement, transfer, or disaster.
  • Process Risk is the risk of loss associated with failure to accurately represent and then consistently execute core business or operational processes. Examples include undefined or undocumented processes that differ from common baselines.
  • Technology Risk is the risk of loss associated with the failure to effectively use and leverage enabling technology In support of a program’s strategic or mission objectives. Examples include failure to effectively use tools and methods that can efficiently and timely connect members of the program to make effective decisions.
  • Strategic risk is the risk of loss associated with failures to achieve strategic objectives outlined in a program’s strategic plan. Loss of critical knowledge (people risk) can also be a strategic risk.
  • Disaster risk is the risk of loss associated with disaster. Examples include fire, earthquake, flood, or war.
  • Reputational risk is the risk of loss associated with a program’s actions that can devalue its brand name and image. Examples include corporate or executive actions or decisions that bring legal action or public disenfranchisement with the program.

All of these categories of operational risk can contribute to significant loss, partial, or complete failure within a program. Figure 1, Change Drives Knowledge Needs, above, reflects these and other concepts of change, and therefore, risk.

Operational risk can be difficult to mitigate since it involves calculated decisions to assume risk. In many circumstances, programs with an ability to effectively capture and reuse their critical and relevant knowledge will be better able to mitigate the broad spectrum of operational risk they face. In addition, the program will be better able to set necessary and meaningful operational performance standards by using effective or leading practices associated with necessary proven processes or techniques.

Attributes of Effective Operational Risk Mitigation

It is possible to articulate several of the critical knowledge management practices of programs that effectively capture and reuse knowledge (flow of knowledge) to reduce operational risk. They include:

  • Use of “Fast Learning” Processes
  • Support for Communities of Practice Around Core Business Processes or Other Relevant Program Target Areas
  • Knowledge Assets (repositories or knowledge base) Supporting the Communities of Practice and the Broader Program Execution
  • Enabling technology to facilitate connection, knowledge capture, collaboration and knowledge sharing as part of workflow
  • Leadership supported culture that is acceptable of change as a component of business execution, views change as part of successful business evolution, and makes capturing and reusing knowledge a fundamental part of the core business processes.

Assessing a Program’s Knowledge Capability to More Effectively Mitigate Risk Through an Integrated Framework for Institutional Knowledge Transfer

There are some common characteristics of programs that effectively capture and reuse knowledge to mitigate operational risk. They have:

  1. Processes in place for assessing and tracking operational risk.
  2. An ability to monitor incidents and situations that have created operational problems and to link them back to causes that may have been related to lack of knowledge.
  3. A system for monitoring and reporting operational risk exposures.
  4. Processes and methodologies in place for the timely and effective application of knowledge (information and experience) to address operational risk exposures.
  5. An ability to capture and reuse knowledge (to move knowledge effectively across internal boundaries) with respect to mitigating or eliminating operational risk that is established and proven.

Additionally, a program’s knowledge capability can be classified by how effectively knowledge Is being captured and reused. Consider the following simple maturity model:

  • Level O: Nonexistent. The program does not demonstrate action that can be observed to capture and reuse knowledge.
  • Level 1: Casual. Knowledge is captured and reused on an ad hoc basis.
  • Level 2: Evolving. Knowledge is captured and reused but the capture, distillation, and institutional transfer of knowledge is neither consistent nor disciplined across the program. Some trust is evident but collaboration does not occur consistently.
  • Level 3: Integrated. A knowledge capture and reuse framework is part of the fabric of the program. People trust each other and collaboration occurs because people find value sharing and reusing knowledge as part of the business and operational processes of the program. Institutional knowledge transfer is not viewed as extra task and is part of project planning and measurement.

The increasing complexity and speed with which a program will be required to operate requires that the Program Manager rely on the total breadth of available knowledge, all its information and all its existing and evolving experience and insight, in order to effectively manage operational risk.

Only through a systematic, integrated, and leadership supported approach to capturing, transferring and reusing knowledge can a program effectively mitigate or eliminate the operational risk it must address in order to improve its performance, efficiency and effectiveness, and deliver the desired outcomes to its customers and stakeholders.