Tuesday, May 4, 2010

James Surowiecki and the Wisdom of Crowds

Chris Andrews, Forrester Research, From FEI 2010

I was very excited to attend the session by James Surowiecki. Though I have not read James’s book, I am a regular reader of his column in the New Yorker. I am also intrigued by the paradox I see underlying the idea of “The Wisdom of Crowds”….On one hand, I see more and more companies and business models based on collective intelligence -- many of whom actually sponsored this event. On the other hand, however, we are literally surrounded by examples of poor wisdom coming from group intelligence, from the recent stock market collapse, to the “groupthink” that goes on within each of our individual companies.
Here’s what I heard during this session:

· James started out by highlighting and important point, that wisdom of crowds only works well “under the right circumstances”. I’m frankly very happy he pointed this out from the outset, because it underlies my skepticism about the wisdom of crowds.
· Jim told some interesting stories about jellybean counting contests, in which he often finds that the average of people’s guesses about the number of people counting the number of jellybeans in a jar, is surprising accurate, he says typically within about four percent of the actual number
· The same applies to innovation. James says that the vast majority of innovations typically work in a collaborative community. He noted that notable innovators like Ben Franklin actually relied heavily in collective or community intelligence.
· To make crowds work, you need the group to be diverse -- you need diversity of perspective and lots of different tools, multiculturalism, diversity of age, diversity of gender; diversity expands the base of information; Its also helpful to have a “devil’s advocate”
· He noted that diverse teams often have a hard time working together, because people have to work with people they agree with and who have a similar background to. There are more arguments within diverse teams, but the results can often be better. I think this was one of his most interesting points, because it highlights the problems that many managers have with diverse teams…they’re hard to manage!
· You also want independence of thought, which is much easier said than done, because we take cues from other people. Imitation, for the individual, is safe, but it creates more problems for a group (if everyone in the group is following others).
· What can you do to get people to think for themselves? Respect confidentiality, watch out for talkative people, if you are leader don’t dictate to people in advance (be open to new ideas). James noted that none of these are quite as easy as it sounds.
· James ended his talk about the search for the USS Scorpion, a great story about effective use of the wisdom of the crowds.

I was very impressed with Mr Surowiecki as a speaker. Not only was he focused in his subject matter, he was able to bring quite a bit of academic, statistical, and real-world examples of how the wisdom of the crowds can work effectively. As noted, I love the fact that he brought nuance to the argument – showing the exact conditions and circumstances in which the wisdom of the crowds work.

However, a frustration I can see among my clients is that diversity and independence are really not enough to ensure the reliability of crowd….I see organizations struggling with a variety of issues in their idea generation work: how to ask the right question, management of the market, proper sample selection, governance, incentives and metrics. These are things that make collective intelligence easier said than done – and how some innovation management suppliers differentiate themselves.

Nonetheless, and interesting and engaging session.
Chris

1 comment:

Michael said...

James is a brilliant guy. I'm putting some of these ideas to the test with Second Opinion, an iPhone app (free) that gives you the answer to your yes-or-no questions through crowdsourcing. It's been interesting, enlightening, and a bit addictive!

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