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That's all window dressing. That's not fundamental. That's not getting at change and the transformation that must take place. Sure we have to solve problems. Certainly stamp out the fire. Stamp out the fire and get nowhere. Stamp out the fires puts us back to where we were in the first place. Taking action on the basis of results without theory of knowledge, without theory of variation, without knowledge about a system. Anything goes wrong, do something about it, overreacting; acting without knowledge, the effect is to make things worse. With the best of intentions and best efforts, managing by results is, in effect, exactly the same, as Dr. Myron Tribus put it, while driving your automobile, keeping your eye on the rear view mirror, what would happen? And that's what management by results is, keeping your eye on results.

In Europe and in America, people are now more interested in the cost of quality and in systems of quality-audit. But in Japan, we are keeping very strong interest to improve quality by use of methods which you started....when we improve quality we also improve productivity, just as you told us in 1950 would happen.

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Why waste knowledge?... No company can afford to waste knowledge. Failure of management to breakdown barriers between activities... is one way to waste knowledge. People that are not working together are not contributing their best to the company. People as they work together, feeling secure in the job reinforce their knowledge and efforts. Their combined output, when they are working together, is more than the sum of their separate

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The aim of this book is to try to explain to top management of America that their job is to improve competitive position. One need not be an economist to understand from the papers that many American products are not competitive at home or abroad, lost to foreign invasion, causing unemployment at home. Failure of management to plan for the future and to foresee problems has nurtured waste of manpower, of materials and of machine time, all of which raise the manufacturers costs and the price the purchaser must pay. The consumer is not always willing to subsidize this waste.

What is a system? A system is a network of interdependent components that work together to try to accomplish the aim of the system. A system must have an aim. Without an aim, there is no system. The aim of the system must be clear to everyone in the system. The aim must include plans for the future. The aim is a value judgment. (We are of course talking here about a man-made system.)

The prevailing style of management must undergo transformation. A system cannot understand itself. The transformation requires a view from outside. The aim of this chapter is to provide an outside view—a lens—that I call a system of profound knowledge. It provides a map of theory by which to understand the organizations that we work in. The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding of the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people. Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to.

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Statistical methods had taken fire in America around 1942, following a series of ten-day intensive courses for engineers, initiated by Stanford University on a suggestion from this author. The war department also gave courses at factories of suppliers. Brilliant applications attracted much attention, but the flare of statistical methods by themselves, in an atmosphere in which management did not know their responsibilities, burned, sputtered, fizzled and died out.