p.17 There is no substitute for knowledge.
p.50 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... The aim must include plans for the future. The aim is a value
judgment... Management of a system therefore requires knowledge of the interrelationships between all the components
within the system and of the people that work in it... It is management's job to direct the efforts of all components
toward the aim of the system.
p.51 A system must create something of value, in other words, results.
p.54 A system includes the future. Management and leaders have still another job, namely, to govern their
own future, not to be merely victims of circumstance.
p.55 By understanding a system, one may be able to predict the consequences of a proposed change.
p.57 What ignited Japan? The flow diagram shown in figure 6 was the spark that in 1950 and onward turned
Japan around. I displayed to top management and to engineers a system in production. The Japanese had knowledge, great
knowledge, but it was in bits and pieces, uncoordinated. This flow diagram directed their knowledge and efforts into a system
of production, geared to the market - namely, prediction of the needs of customers. The whole world knows about the results.
p.58,59 The flow diagram starts with ideas about a possible product or service - what might the customer
need; prediction... A flow diagram also assists us to predict what components of the system will be affected, and by how much,
as a result of a proposed change in one or more components.
p.92 The prevailing style of management must undergo transformation. A system can not 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.
p.97 The obligation of any component is to contribute its best to the system, not to maximize
its own production, profit, or sales, nor any other competitive measure. Some components may operate at a loss to
themselves in order to optimize the whole system, including the components that take a loss.
p.100 Management requires knowledge about interaction of forces... Use of data requires
knowledge about the different sources of uncertainty.
p.100 The interpretation of results of a test or experiment... is prediction that
a specific change in a process or procedure will be a wise choice, or that no change would be better. Either way
the choice is prediction. This is known as an analytic problem, or a problem of inference, prediction.
p.101 Management is prediction. The theory of knowledge helps us to understand that management
in any form is prediction.
p.102, 103 Knowledge is built on theory. The theory of knowledge teaches us that a statement, if
it conveys knowledge, predicts future outcome... Rational prediction requires theory... Theory is a window into the
world. Theory leads to prediction... Any rational plan, however simple, is prediction concerning conditions,
behavior, performance of people, procedures, equipment, or materials.
p.105 An operational definition is [defined as] a procedure agreed upon for translation of concept into
measurement of some kind.
p.106 information, no matter how complete and speedy, is not knowledge... Knowledge
comes from theory. Without theory, there is no way to use the information that comes to us on the instant.
p.107 Enlargement of a committee does not necessarily improve results. Enlargement of a committee is not
a reliable way to acquire profound knowledge.
p.116 Understanding of profound knowledge will lead to transformation of management.
