This is the sixth in a new AOK series featuring the known practices of knowledge champions who are not consultants or gurus, but quiet, unassuming knowledge professionals who are "just doing it" for their organizations. The first Leading Lights were selected from among the 45 breakout speakers who presented at the March 13-15 AOK/Delphi Group Enterprise Learning and Knowledge Exchange Summit in Palm Springs, California, U.S.

An interview with Kuan-Tsae Huang

Asia Connection: Innovation, Transformation
and Knowledge Management

By Fred Shoeps
AOK Leading Lights Reporter

Kuan-Tsae Huang is the Chairman and CEO of TASKCO in Asia headquartered in Taiwan with offices in Japan, Singapore and China. He plays a key role in the transformation of Taiwan's economy rooted in manufacturing, into a knowledge-based economy driven by innovation.

Kuan-Tsae's career is in fact one of innovation, transformation and knowledge management. Trained at MIT, Kuan-Tsae became a recognized scientist and researcher while working at IBM Watson Center. For six years he led a remarkable joint venture in Singapore focusing on software solutions based on global resource integration. At the same time, he headed IBM's multimedia business unit in Asia Pacific created to drive business opportunity with broadband solutions designed for the telecommunication and media industries in AP countries. In order to increase productivity and speed of solution delivery to customers, Kuan-Tsae was called to lead integration of knowledge management and object asset reuse into IBM Global Services. Kuan-Tsae brought focus to applying Object-Oriented and KM technology in solution deliver and in support of communities of practice. His leadership helped transform and accelerate growth of IBM's solution and service business in IBM Global Service.

Kuan-Tsae's business and development experiences brought him to the forefront of IBM's e-business transformation and implementation. Today many global companies use IBM's implementation of e-business transformation as a their model. Because of his wealth of experience Kuan-Tsae was appointed as a Taiwan government advisor for e-business to focus on leveraging e-business in transforming Taiwan's manufacturing industry. Subsequently he returned to Taiwan and set up his own business to work with Asia Pacific companies to enable them to effectively compete in a knowledge-based economy.

AOK: Kuan-Tsae, how would you describe the business and economic landscape in Taiwan and China today and the rest of Asia?

Kuan-Tsae: Taiwan was one of the best, world-class manufacturing industry countries, particularly for PCs PC related products and semiconductors. There are about one hundred products that were rated as number one from Taiwan and occupy about 50 percent of market share. With China opening up the claim is that it is the low cost manufacturing center with many Taiwan investors moving resources to China. This is opening up a new opportunity for Taiwan to transform itself and go beyond manufacturing into innovation, creative industry and into service industry. Not only is this an opportunity for Taiwan but the whole Asia region to transition to a new era. In this context knowledge management provides essential tools to enable this type of transformation.

AOK: What role do you see knowledge management playing in the next few years in Asia?

Kuan-Tsae: If you take Japan as an example, about 20 years ago they looked into quality design, not just manufacturing -- designing quality into cars and moving to creating innovative products reflected in such products as the Walkman, DVDs --all innovation based activities. Taiwan is spending large amounts of resources to drive innovation based R&D. This will impact a cross section of industries -- textiles, electronics, and semiconductors In semiconductors, Taiwan is focusing on 'system on a chip', which is all about IC design -- a main themes for the next two years. Another area is the Bio-infomatics/biochemistry. Taiwan is investing more than $30 billion over the next few years.

AOK: What role is the Taiwanese government playing in knowledge management? What can other countries learn from Taiwan's experience?

Kuan-Tsae: Taiwan's government right now invests about $1 billion in R&D yearly. What is being realized is the importance of collecting all the experiences and transferring speedily -- when technology is leading edge and hot. The importance of patents is another thing being realized. Taiwan is now number four in patents per year behind the US, Japan and Germany. Needed know how will be how to cash out on these intellectual properties.

AOK: Are there role models in Taiwan?

Kuan-Tsae: Yes, Fox Com was rated as number seven in patent holding. TSMC, Taiwan Semiconductor Manufacturing Company, has been ranked in the top 10 of semiconductor manufacturers worldwide. Both have a lot going on in intellectual property and knowledge sharing. The government is fostering sharing not just within the company but also across the whole supply chain -- competing with other supply chains more efficiently. I am involved with how to transform such large R&D organizations into service oriented not just technology-oriented efforts. One government project is Taiwan2008. One focus is to provide a service focus on such R&D activity.

AOK: There seems to be a real buzz around KM in Taiwan, Singapore and just beginning in Japan and China. How likely is it that Asia will set the pace for the next phase of knowledge management?

Kuan-Tsae: Last year President Chen of Taiwan announced 2001 is the first year of Taiwan's knowledge economy. And then, subsequently the government announced the Taiwan2008 Challenge program intended to transform Taiwan into a knowledge-based economy. With closed hi-tech relationship globally such as Japan, Taiwan also hopes to create about 30 multi-national R&D centers -- and centralizing a so-called R&D innovation service industry. This is also about cross discipline and cross industry for knowledge exchange. For example the clean-room experiences in industry of semi-conductor are applicable in the biochemical arena. Biotechnology requires stringent clean and safe facilities. In this case it's about leveraging existing knowledge across industries. Taiwan is positioning itself as the leader of TCT/LCD in LCD computer displays, which is an accomplishment about innovation, not manufacturing. In this regard four major efforts are achieved: IC Design -- system on a chip, TFT/LCD industry leadership, biochemical/life sciences, and digital content. All efforts are the result of knowledge and intellectual capital intensive.

AOK: What are other likely scenarios?

Kuan-Tsae: The importance of integrating R&D and manufacturing in China or for that matter any country with low cost manufacturing.

AOK: How do you see yourself playing?

Kuan-Tsae: A portion of my activity is providing suggestion to government a, and most of it is help industry move ahead into a knowledge-based economy, which serves as an agent of enterprise transformation. This plays to my experiences.

AOK: What are some of your experiences in how knowledge management is making a difference in Asia today?

Kuan-Tsae: Asia in context of manufacturing has been practicing many of the disciplines and methodologies into business operations. For example in traditional manufacturing, these practices include total quality management, manufacturing process re-engineering and supply chain. At the same time as they want to transform to a knowledge based economy they are realizing that knowledge management processes are critical to the success of a services industry. They understand and see the importance of applying knowledge management into the real business operations. They see the competitive advantage of competency planning as Michael Porter introduced some time ago. This is really important in context of knowledge based services business.

Semiconductor manufacturers used TQM to focus on quality control. Quality control has to go beyond traditional quality control to achieve high yield. High yield rate is based on experiences. The semiconductor processes have to be improved by sharing knowledge and gaining feedback from users to feed back into the manufacturing processes -- this results into a much higher yield semiconductor process. High yield of course drives higher margin -- this is now about managing knowledge. This is about responding to configurable requirements of the marketplace and designing margin into the chip -- which goes way beyond quality control. We are talking about moving from pre-planned manufacturing to customer driven manufacturing and that requires knowledge.

AOK: What are the lessons you have learned about the role of knowledge management in business?

Kuan-Tsae: When I went back to Taiwan, I realized how operational based Asian companies are where they focused more on doing and focused less on strategic thinking. In my opinion, to fully realize the value of knowledge management, they will need to do more strategy thinking. You can't do it all at once as strategic thinking is important for the deployment of knowledge management. Cultural issues are always a key part for knowledge management deployment. In the eastern world, the issues come from a different perspective. The Asian world is realizing the importance of teamwork and multi-disciplined activities. In the next few years, Asia has to leverage these even more extensively. It will be necessary to use multi-disciplined approaches to create new products, services and new ways of thinking.

AOK: If one had the time one could attend weekly knowledge management related events somewhere in the world: a portal conference, hot to value intangible assets, a cyber- librarian conference, a community of practice conference, an intellectual capital conference, an e-Learning conference, a human resource development conference, etc.

Kuan-Tsae: I'm amazed at how much goes on weekly in conferences around the world and apparently how little has penetrated into the fabric of how businesses operate.

AOK: What do you make of that?

Kuan-Tsae: I see some companies are making things happen. Asia has the habit of copycat; when they see other competitors they jump in very fast. The trend is to use knowledge management as a methodology, as a tool, as a way of enabling transformation. They will focus on skill development, human resource development, they will also focus on patents and branding. Now with China's large market, they realize the importance of such mechanisms to protect long term interests. Transitioning from a manufacturing economy to a knowledge-based economy will require skill development -- eLearning. Much of eLearning will be focused on industry based activities rather than traditional school activities. The fourth area will be focus on innovation. Innovation and creativity will be the keys. How to recognize an idea, turning it into innovation as a product or service offering is yet another goal.

AOK: You are a CEO with deep knowledge about knowledge management. In 25 words, what is the compelling reason for knowledge management?

Kuan-Tsae: I would say it is enabling tools to transform a company into a knowledge based service business, leveraging knowledge, experience, and people. The most important is people. In Taiwan's case is the productivity rate of its people.

AOK: Some argue successful transformation and innovation is all about trust and respect. New knowledge flows where there trust and respect are the norm. Trust and respect fosters powerful conversations that reveal what we don't know what we don't know. Trust and respect is about how humans behave.

How does human behavior factor into knowledge management?

Kuan-Tsae: You've touched upon the trust issue. Trust is important and essential to maintain good relationship. In Asia it is called Quan-Xi which is a key role in business dealings. But even more important is teamwork If people realize that teamwork can compete better than the individual. Not just teamwork of employees but that of companies working together will be essential -- so does speed of response and flexible creativity.

AOK: How does knowledge factor into an Asian business? What are the fundamental values that underpin Asian business?

Kuan-Tsae: Asia is recognizing the importance of diversity of thinking which can create new type of competition. Business alliances will become a focal point to become a global player. Taiwan sets a goal that by 2008, to have English as the official language, all people are intend to be a global player rather than a local player.

AOK: Kuan-Tsae, thank you for sharing with us your insights into the role that knowledge management is playing in Asia, specifically in Taiwan. I look forward to the results Asia achieves through knowledge management. Clearly the word is out in Taiwan that it will transform itself into a knowledge-based economy. I wish you much success in your endeavors and look forward to what may very likely be a decade of Asian leadership serving as role model for integrating knowledge management into the daily operations of business.

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