For the last few weeks I’ve been bouncing ideas on how to implement the principles in James Surowiecki’s book The Wisdom of Crowds off a variety of people in the public and private spheres. I think I’ve finally got a model that works.
For those unfamiliar with the concept of the Wisdom of Crowds, here is just a bit of what I’ve written to get you up to speed:
Tell me what you think of this approach, which is designed to integrate a lot of diverse applications: business, social, political, economic, artistic, scientific, or technological. You have a problem to solve or a decision to make, this model will help you do it better.
Just to restate the basic principle: Many cognitive, coordination and cooperation problems are best solved by canvassing groups (the larger the better) of reasonably informed, unbiased, engaged people. The group’s answer is almost invariably much better than any individual expert’s answer, even better than the best answer of the experts in the group.
The reason for this superiority is that each individual brings to the problem some valuable unique knowledge or perspective, and any errors in that knowledge or perspective are balanced off against those of others in the group, so the collective wisdom of the group is likely to be extremely accurate, reliable, knowledgeable, and predictive. If you’re skeptical, please read the book — Surowiecki presents dozens of examples to support this thesis. The average prediction of one such group, the Iowa Electronic Market, over the several months before the election, was that Bush would win by a comfortable 3% margin and that Republicans would make gains in both houses of Congress. They were exactly right.
My ‘Collective Intelligence’ model realizes (a) that there are some things that crowds can’t do (they need to be given a problem with a discrete or quantifiable set of possible answers from which to choose), (b) that care must be taken in the ‘qualification’ of the crowd to meet Surowiecki’s conditions of nonbias (they must understand the problem, be diverse in their perspectives, independent of groupthink tendencies and each able to bring a bit of unique knowledge to the problem, and (c) that there needs to be some incentive for people to participate in the crowd (those guessing correctly the number of jelly beans in the large jar at least win the jelly beans). The diagram above reflects these three constraints. Here’s how it works, using, as an example, a company’s problem of unsatisfactory productivity:
Let’s look at another, simpler example. Imagineers Inc. wants to know which of a new series of thirty possible products and services they should release to the market, and how to price them.
The model will even work on what Surowiecki calls co-operation problems, where there is some constraint that requires compromise by all, such as “What is the optimal salary distribution for our company?” All that’s needed to include such problems is to state clearly the constraints (e.g. total organization salary cannot exceed $X) and to not allow Qualified Crowd members to ‘vote’ on issues where they have a conflict of interest (e.g. each person can vote on everyone else’s salary but not on their own).
This model isn’t limited to business applications. Non-profits have productivity problems too. In fact, of the 25 problems that most often keep executives awake at night, which I reported on in an earlier post*, most of them are challenges for organizations of every type, from government departments to NGOs to charities. Although the bigger your organization the more likely the Wisdom of Crowds is to benefit your problem-solving and decision-making, even small organizations could benefit from tapping into Collective Wisdom. Here’s just a few questions that could be posed to the ‘crowd’, just to show the diversity of applications for this model:
I’m pragmatic enough to be willing to have Collective Wisdom work initially on business problems, and continue to use such fee-paying applications to fund the enterprise. But in my heart what I really want this enterprise to do is the think-tank work, solving some of the world’s most intractable and pressing problems. I’m optimistic for two reasons: I think when it comes to solving global problems, a lot of people will be motivated to join the ‘crowd’ for altruistic reasons, and donate their time just to help make the world a better place. We don’t need to offer them a Reward Pool for such problems. And I don’t think the infrastructure of Collective Wisdom needs to be all that large and expensive. I think a few profitable, successful business pilots will be enough to get the process streamlined, the infrastructure paid for and the crowd assembled, so that we can start spending a chunk of time on solving global problems, for free. And although there may be some first-mover advantage here, I think the real value of Collective Wisdom will be in the creativity and analytical skill of its core staff and Solution Teams, and in the quality of its Qualified Crowds and implementation teams. It’s the people, not the technology, that will make or break it.
There are some kinds of questions that I’m ambivalent about throwing to the crowd. In the above model, it’s the Solution Team and the customer whose imagination is tapped, not the crowd’s. I’ve assumed that giving a crowd, even a Qualified Crowd, an open-ended question like “What features would you like to see in a car, which you can’t find in any car today?” would be an invitation to anarchy. You could be reading replies to such a question for months, and end up with a completely unmanageable number of ideas, so many that you’d never be able to identify the needle in the haystack that might actually pay off in a big way. But maybe I’m a pessimist. What do you think? Could we tap in not only to the Wisdom of Crowds, but to it’s creativity as well? How could we do so in a manageable way?
I think the Value Proposition for this model is compelling: Tapping into the Wisdom of Crowds with a disciplined process will reduce or eliminate the need for (and cost of) ‘expert’ consultants, academics and focus groups, while producing better decisions and solutions than those experts can offer. In the process, it can even provide manpower and investment for implementing the solutions, reducing the need for RFPs and venture capital. Business is always looking for ways to reduce cost. Not-for-profit organizations are always strapped for cash. This model works for both.
That’s what I have so far. I’m getting a lot of expressions of curious interest, including some business organizations that would be willing to test the waters. I’m copying James Surowiecki on this post to see what he thinks. I’d love to know what you think. You are my wise and qualified crowd.
* Here are the 25 business problems, any of which could be addressed using this model:
Other Writers About CollapseAlbert Bates (US)
Andrew Nikiforuk (CA)
Carolyn Baker (US)*
Catherine Ingram (US)
Chris Hedges (US)
Dahr Jamail (US)
Dark Matter Women Witnessing (CA)
David Petraitis (US)
David Wallace-Wells (US)
Dean Spillane-Walker (US)*
Deena Metzger (US)
Derrick Jensen (US)
Doing It Ourselves (AU)
Dougald & Paul (UK)*
Gail Tverberg (US)
Guy McPherson (US)
Jan Wyllie (UK)
Janaia & Robin (US)*
Jem Bendell (US)
Jonathan Franzen (US)
Kari McGregor (AU)
Keith Farnish (UK)
Kristinha Anding (US)
NTHE Love (UK)
Paul Chefurka (CA)
Paul Heft (US)*
Post Carbon Inst. (US)
Richard Heinberg (US)
Robert Jensen (US)
Roy Scranton (US)
Sam Mitchell (US)
Sam Rose (US)*
Tim Bennett (US)
Tim Garrett (US)
Umair Haque (US)
William Rees (CA)
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