A noted management consultant argues that a knowledge of such diverse subjects as statistics, chaos theory, ecology, psychology, self-actualization, and the theory of multiple intelligences can provide a sound--and flexible--base for good management practices and ethical behavior in today's complicated corporate world. 10,000 first printing. Craig Hane Ph.D., chairman, Third Wave Industries Brilliant. Full of insights and wisdom. First, Rafael Aguayo elucidated Dr. Deming's 'Profound Knowledge' concepts in his 1990 book, Dr. Deming: The American Who Taught the Japanese About Quality . Now Aguayo elevates and extends Profound Knowledge to new heights in an exhilarating and nontrivial way. I believe any leader will derive significant benefits from the insights and synthesis Aguayo has amalgamated from many late-twentieth-century advances in human knowledge and understanding in this fascinating and rewarding book. -- Review Rafael Aguayo is the managing partner of Millennia Management Associates, Ltd., where he is a full-time consultant working with large and small companies to help them become dynamic, profitable, quality-conscious enterprises. His clients have included Bell Canada, Merck, MCI, Hewlett-Packard, Digital Equipment, Newsday , EAB, and many others. He lives in New York. Chapter 1: The Winds of Change America and the world are in transition. The basis of economic power and wealth is rapidly shifting. Whereas in the past economic power was determined by access to key physical resources such as petroleum, steel, or manufacturing, economic power is increasingly being determined by access to key knowledge resources. Evidence of the shift is seen in the profitability and valuation of different industries. US Steel, the pride first of Andrew Carnegie and then of JP Morgan, was once the largest corporation in the world. It represented real power. Today, while still involved in steel production, it is a minor company with paltry profits. Petroleum, while still a potent economic factor, is decreasing in importance. In the nineteenth century, 70% of the population of North America was involved in farming. By the 1950s that number was down to 5%. Today it is down to 2%. There is reason to believe that that percentage will shrink further. Similarly in the early part of the twentieth century, 50% of the population was involved in manufacturing. Today that number is down to 14%. This percentage will also continue to decrease. Several of the companies with the highest market valuation in the world did not exist twenty-five years ago -- and neither did their industries. Among these are Microsoft, the leading provider of software for the personal computer, and Intel, the leading provider of the personal computer microprocessor. The company with the highest valuation (at this writing) is GE. Amidst such obvious and dramatic changes it is easy to fall into the trap of assuming that management principles and the values we use to guide our lives must also constantly change. Thus in the recent past we have heard talk of a New Economics in which everything is in flux and profits are unnecessary. Before that the vacuous fad of Re-Engineering promised constant upheaval, but that just puttered before fading from serious discussion. For a management philosophy to be both effective and enduring it must be based on principles that transcend daily occurrences and swings in markets. Indeed it should help explain cycles and prepare managers to deal with swings in markets, cycles, and long-term trends. Such a management system must be based on knowledge tested and confirmed over decades. That basic knowledge would change slowly only after significant evidence required it. The system would encompass knowledge from diverse fields, some of which are normally considered to be unrelated. Metaknowledge in the generic sense of the word represents the presuppositions and knowledge that each of us has and that, in large measure, frame our thinking and help determine our actions. But MetaKnowledge, with a capital M and K, is the specific system of knowledge put forth in this book that brings together some of the most advanced thinking in several fields into a system of knowledge. MetaKnowledge is a system of knowledge that serves as the foundation for management in the twenty-first century. It is a kind of metaphysics for management, or a metamanagement. When Aristotle coined the term "metaphysics" it was meant to deal with topics beyond physics. In philosophy, metaphysics became primarily an examination of our presuppositions of reality, especially physical reality. The emphasis was often on a theory of knowledge. But the analogy with metaphysics is limiting for several reasons. Physics has often been called the queen of sciences. Models from physics and chemistry have been applied to most areas of our understanding, including psychology, biology, and economics, with some success. However it is becoming increasingly clear