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November 30, 2005

The High Cost of Missing Knowledge: One Example

Last Thursday, a house exploded in Lexington, Massachusetts, where I live. TV news showed the smoldering ruins and told about the people who had come out to rake leaves just before their home blew up.

You hear similar stories from time to time: a gas leak, a spark, boom—no more house. This was different. Turns out that workers from the gas company, following an order they’d received, connected a high-pressure gas pipe to a low-pressure one, creating a pressure spike throughout the system. That caused leaks and equipment damage throughout the town, and the explosion. It has meant 1,800 homes without heat for the better part of a week, restaurants closed in the center of town, and literally hundreds of gas company employees working 24 hours a day, digging up dozens of streets to replace damaged parts of the system and checking gas lines in every one of those 1,800 homes. One evening, I counted 31 company trucks on Massachusetts Avenue. Lawsuits are likely.

You can bet this error will cost the gas company many millions of dollars. I don’t know how it happened, but I imagine there must have been opportunities to avoid it. This was no subtle mistake; they connected a 60 pounds-per-square-inch line to a 2 pounds-per-square-inch line. The manager who gave the order could have caught his own error, perhaps someone who transmitted it could have noticed, the supervisor of the work crew could have seen it, the workers themselves might have said, “Wait a minute; this isn’t right.” You’d think those high- and low-pressure lines would look different (but apparently they don’t).

This episode suggests a couple of points. One is that a lack of knowledge or a failure to apply knowledge at a critical moment (“this is wrong!”) can be expensive and dangerous. Another is that avoiding such problem requires experienced people who can recognize errors, a culture that encourages people to speak up when they see a problem, and systems that incorporate and provide essential information (for instance, color-coded gas pipes, in this case, or drug-interaction databases in hospitals).

I had a conversation with Dorothy Leonard this morning, she mentioned that one of the problems with trying to measure the value of knowledge management is that much of it helps avoid problems, and how do you measure something that doesn’t happen? True, but when it does happen, the cost of missing knowledge is clear.

Posted by Don Cohen on November 30, 2005 11:47 AM | Permalink

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Hi Don,
Interesting stuff. I agree with you that quantifying benefits of using knowledge or losses due to non-usage are not very simple to bring out.

However, here the case was very different. I am sure that there would be some fool-proofing of the system, like color coded pipes, or different sizes of pipes or different connectors, etc. Knowledge would have been used to put those things in place. Knowledge is created and based on enquiry.

The point is that you can get the horse to the water but you can't force it to drink. I guess there is much more to that incident that meets the eye. We should catch the RCA (Root Cause Analysis) details and then discuss this again.

Posted by: Pawan Bakhshi, Ph.D. | December 25, 2005 09:33 AM

Hi Don,

My two cents worth on this. I am pretty new to this area of KM and Learning & Development, do factor this bit while reading my comments. :)

I think it's more of an "Attitude" issue than a mere "Knowledge" issue because I consider the curiosity to acquire knowledge and the ownership to apply knowledge both are largely a matter of attitude than anything else.

Do let me know your thoughts.


Sandeep Rao | Leadership & People Growth (People Strategy Organization)

Sapient Corp | Bangalore

Mobile : +91.9886000848
Email : srao2@sapient.com

Posted by: Sandeep Rao | December 9, 2005 11:21 PM

Hi Don

Sobering story. I just spent most of the last five years working for a natural gas utility (I was downsized in October and am now job hunting) and my clients in Operations would say, "Our product is not like shoes or hamburgers. Our product can blow up."

As the OD guy serving the Operations group through the tumult of being acquired in 2004-05, one of the biggest concerns we had was knowledge retention and transfer so that we did not have such mistakes.

This was a real concern because the new owner rode into town with guns blazing, downsizing lots of employees right from the get-go, including key knowledge holders. They were dismissed so rapidly in some cases that there was no time for any knowledge handoff.


Posted by: Terrence Seamon | December 1, 2005 10:59 AM

In Fort Worth, Texas a similar incident happened recently due to inaccurate and out of date maps.

Inadequate construction maps used by Atmos Energy contributed to a natural gas surge in June that damaged a historic downtown church and nearby businesses and injured two people, state investigators have determined.

Inaccurate and out-of-date maps also hampered the company's ability to locate gas leaks caused by the overload, the investigators found.


Posted by: Mike Sivertsen | November 30, 2005 02:18 PM

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