Implementing a knowledge-based management system: A work placement report


A work placement report

The vast amount of information now so readily available has both its benefits and its drawbacks. Particularly in large companies, making sure that everyone has the information, and, more specifically, the knowledge that they need is an increasingly formidable task. As a student sponsored under the Engineering Leadership Awards scheme, Joseph Corrigan spent July and August 2002 working with Thames Water’s Engineering Knowledge Management Team. Here he describes how he saw the way in which the internal operation of the company was changing as a result of the development of knowledge management systems.

A changing company

In 1995 Thames Water supplied seven million customers with drinking water and 11 million with wastewater services, operating in London and the Thames Valley. At the start of 2002, as the water division of RWE, Thames Water had developed into the third largest water company in the world, serving more than 44 million customers. When the business was primarily UK-focused, it worked using informal knowledge networks. Today, the company is growing so rapidly that informal networks alone cannot sustain the level of information sharing that is necessary. To cope with this change, many new ways of working have been introduced to enable closer group collaboration between experts in different areas. A new global information exchange system is needed that can support the development of global teams, build new relationships between experts, and make their resources available to all Thames Water projects. As an extension to the knowledge base that already exists, the company is turning to knowledge management to provide a solution.

Knowledge management

Knowledge management covers a broad spectrum of processes and activities, including a range of information-based solutions to allow people to work together globally. Knowledge is the raw data of information in context: it is information that has been adapted to a specific need. Knowledge experts usually divide knowledge into two distinct types:

  • explicit knowledge, which relates to ideas and information that can be easily written down and expressly captured, for example in databases, drawings and libraries

  • tacit knowledge, which is the implied knowledge that is tied up with context and culture. It makes certain statements and decisions more readily understandable; in short it helps choices make sense.

An example of tacit knowledge

A salesman working for one of the world’s leading desktop computer suppliers convinced a large customer to buy about a third more computers than they had use for, while still thinking that they were getting a good deal. When the unembellished result is presented, the story seems unlikely, but the context and reasoning behind the sale fill in the detail. The customer was Swedish, and needed the machines to be shipped to them. However, the number of computers needed did not completely fill a container. If the container were filled, the unit cost of transporting the computers would be reduced. So the customer was persuaded to reduce the unit shipping cost by filling the container and re-selling the extra machines. The customer was happy with the deal because this decision provided the lowest cost per machine; the supplier benefited from higher sales from the deal and new openings to customers who bought the surplus from the Swedish customer.

In this example, the context of the sale justifies the means. The tacit knowledge lies in the relationship and trust established between salesperson and customer, which is built on understanding the culture of the client and the nature of their needs. Tacit knowledge is the lynchpin behind the ability to strike up and maintain a good working relationship, and passing it on within a company can mean the difference between winning and losing a bid. The new Thames Water business model hopes to support both task-centred and informal communities between departments, and gain from the new ideas created (Figure 1).

Most efforts in knowledge management have previously focused on explicit knowledge capture and, to that end, the conversion of tacit knowledge into explicit. To some extent this conversion is useful: it allows tacit knowledge to be stored and categorised, but this results in the tacit knowledge losing some of its flexibility and value. Thames Water Engineering already has a comprehensive relational database, hidden from the user behind a filing system interface, which adequately covers the explicit knowledge that the company owns. So the company is now concentrating on the challenging task of building a structure of communities and tacit knowledge sharing.

Sharing tacit knowledge

The successful application of information requires tacit knowledge of how to use it appropriately. In order for tacit knowledge to be imparted, it must be learned, usually through some form of training, experience or through narratives. These are in the form of anecdotal stories that illustrate points, through to fully-fledged parables that illustrate cultures to people.

The book Who Moved My Cheese? by Spencer Johnson tells a clear story (concerning the actions of two mice and two men who live in a maze) of how change in a business, or indeed the home, can be coped with effectively. This parable has been deliberately constructed to be accessible to everyone and is a good example of tacit to explicit knowledge conversion. In business, concocting stories and metaphors to pass on tacit information is not really feasible, so instead we must use a much more transparent method: conversation.

The Thames Water strategy is to consider knowledge as four interrelated building blocks (see Figure 2). These are intended to help develop the culture of the company into a learning community, make knowledge available and help networks form. The knowledge culture will aid knowledge retention and help it to become time-and space-independent of the specialist who works with it. A culture focused around knowledge sharing is intended to help the company to meet its goals.

Working with innovation

Innovation and creativity are messy, disordered and chaotic, but humans are very good at picking out relevant pieces of information from a wealth of sources. There are very few work areas in any company that are free from clutter, no matter how many times a clean-desk policy is reiterated. So it makes sense to have an information system that supports a dialogue or narrative way of thinking. Group forums, or ‘team rooms’, are intended to do this. These allow threads of conversation between groups of specialists to build trust networks out into other areas of the company, allowing people wider access to knowledge and resources. Thames Water is also building informal areas, such as lounges and cafés, to encourage informal meetings and expand social networks between the older and otherwise more exclusive departments. Even in its infancy the approach is bearing fruit. New links between the UK & Ireland Business Development team and the Technical Development team in the Americas are allowing development of the Irish market with technologies from the USA.

Freedom of knowledge

One of the first rules of information sharing is freedom, the facility for teams to create and manage their own intranet sites, and team rooms help to encourage a knowledge-sharing environment. These groups must be free to develop in any way that they want, and with any structure, so that as much knowledge, tacit and explicit, is shared as possible. This may sound like overkill: why not have just one group for each team and leave it at that? The simple answer is that you can never tell what information is relevant until it is needed, by which time it may be too late to try to generate it. To that end Thames Water has supported both business focused and general interest communities to form. Cross-pollination of ideas is prevalent in such groups and they can expand social networks more rapidly and through wider circles of experience than the company’s traditional cultural structure was able to do.

Open communities

Knowledge groups can be expanded further than the limits of the company’s employees: an electronic musical instrument manufacturer in the USA has an extension of its system into the public domain. For one product they provide a community split into two areas: developers and users. The developers have access, via a nondisclosure agreement, to the proprietary software that allows designers to develop their own modules for the product. This has the effect of increasing the value of the product for the customers, and at no cost to the manufacturer.

The second area is a user base, and the members of this have between them spotted problems and produced fixes within the system more quickly than the manufacturer could ever have done without such interaction. What at first was introduced by accident has become a valuable pool of information, with specialists from many fields freely providing their knowledge. The success of this kind of knowledge sharing has lead to the popularity of the ‘open source’ movement, responsible for developments such as Linux, the free computer operating system.

Partnerships between a company and its customers are sustained by building a relationship of trust and information sharing. Thames Water is rapidly moving towards a situation where any project will have direct access to key specialists, regardless of geographical location, providing the best solution to the customer. A pilot scheme successfully coordinated engineers in Australia and the UK for a customer in South Western America.


Thames Water is moving towards having an unfettered knowledge culture; the first round of online groups is in place, and there is an extensive and rapidly expanding explicit knowledge store. The tacit knowledge capture system will come into its own as people become accustomed to the new tools available for collaborative learning and sharing. To get the groups to work effectively, the company will foster a new knowledge-based culture through encouragement, effective leadership and trust, moving from exclusive to inclusive departments.

To manage this culture change is a challenge, but to provide innovative solutions for the world market, the collaborative experience and knowledge of all employees need to be harnessed. This is what knowledge management aims to achieve.

The Royal Academy of Engineering Engineering Leadership Awards

The Engineering Leadership Awards provide motivation and support for some of the most exceptional engineering undergraduates, with the potential for high-level industrial leadership, in British universities. The Awards enable those students fortunate enough to be selected to engage in carefully planned training and experience which, through financial constraints, may otherwise have been denied to them.

The scheme targets the top upper quartile engineering undergraduates on the second year of MEng courses (third year in Scotland and other five-year courses) who are selected through a rigorous application programme followed by a Fellows Selection Board. Currently it sponsors 30 students each year on the three-year programme.

Joseph Corrigan

Joseph Corrigan is a third-year mechanical engineering student, studying at UMIST in Manchester. As part of his Royal Academy of Engineering, Thames Water Engineering Leadership Award he was placed with the Engineering Knowledge Management Team for two months from July 2002.

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