Recently I reported some corporate backlash against James Surowiecki’s ideas in The Wisdom of Crowds and its message that, if organizations were smart, they could dump a lot of expensive senior executive and consultant/expert baggage and get better decisions by putting critical questions collectively to employees, customers and appropriately ‘qualified’ elements of the ‘general public’.
The objections point out that ‘crowds’ are not great at doing everything. But that’s exactly Surowiecki’s point: The very things that crowds are good at are precisely those things that executives, consultants and experts pride themselves on doing.
A couple of readers asked me if I could distill Surowiecki’s arguments into some kind of decision tree to decide who is best to make decisions. This is my response.
We need to start by looking at who the alternative decision-makers are, and what knowledge, skills and talents they offer that are relevant to the decision-making process:
These would be, I think, Surowiecki’s assessments, based on the research in his book. They are also mine, based on thirty years of varied business experience. The reason why executives, consultants, senior managers and other experts don’t rate ‘high’ in any of the six categories of relevant capacities for decision making is (a) they are usually individuals, and can only know as much as any busy individual can know, (b) in the case of outside experts, they lack experience/context actually working for the organization, and (c) in large organizations executives are paradoxically sheltered from awareness of problems due to the “bad news doesn’t travel upwards” (because “they shoot the messenger”) information behaviour that is endemic to our society.
For those who haven’t read The Wisdom of Crowds, a ‘qualified crowd’ is one that is (i) intellectually diverse, (ii) independent and objective, (iii) each member has access to unique knowledge, (iv) each member is basically informed, and (v) each member is appreciative of (cares about) the problem or decision at hand.
Surowiecki identifies five things that qualified crowds can — if asked appropriately — be very good at:
In all except the first type, the crowd must be given a set or range of alternatives to choose from, and, when they are, Surowiecki says, the ‘errors’ in judgement tend to cancel each other out, so that the crowd’s consensus tends to be consistently better than that of executives, consultants and other experts. If you don’t buy this, you’ll have to read the book — his argument is compelling and well-substantiated (it’s also intuitively sensible).
In situations of the first type, ascertaining (all the) pertinent facts surrounding an issue, the crowd is contributing more collective knowledge than any small group of ‘experts’ could hope to have, and are ‘better’ at doing this by sheer dint of numbers.
So what happens in the real world when important decisions must be made? In my experience, this is the typical process:
If you accept the capacities in the chart above, the result of this ‘business as usual’ process is clearly sub-optimal. Consultants and other outside experts bring precisely the capacities that the executives already have, and none of the ones they lack. Involving researchers and creatives will improve the quality of the decision somewhat, but not as much as involving the crowd. And that assumes that nothing gets lost in the ‘translation’ of knowledge between the researchers, creative people and executives. What’s worse, many researchers and creative people will tell the executives what they want to hear, not necessarily the truth — they lack the independence and objectivity that ‘qualify’ a crowd.
Here by contrast is the optimal process, for complicated (not complex) problems:
This learn-analyze-imagine-assess-decide-on-action process involves each group of stakeholders doing what they do best. If there are appropriate incentives for the crowd (and sometimes that’s as simple as recognition and thanks), this process need not be cumbersome, and to some extent it can be automated (members of the ‘crowd’ can to some extent self-qualify by going through an online qualification survey, and step 3 can also be done entirely online). It is course frightening to executives, because it reveals their true, limited value in the decision-making process. In fact just about anyone can perform the three steps above (they are mostly administrative and facilitative), bringing into question the need for highly-paid executives, and a hierarchical decision-making organizational structure, at all. So this approach is clearly more amenable to egalitarian, non-hierarchical organizations. It’s also bad news for the consultants and outside experts — they aren’t needed in the process at all.
Here, from an earlier article, are 25 business problems that such an approach might solve:
I said that the above process is optimal for complicated problems. What about complex problems, like these?:
The process for such problems must of necessity be emergent, rather than prescriptive as for merely complicated problems. Such problems do not lend themselves to (anywhere near) ‘complete’ knowledge, rigorous analysis, determination of clear causality, or predictability. In fact, such problems don’t have ‘solutions’ per se at all. What can emerge is a collective understanding sufficient to allow all of the participants in the process to contribute knowledgeably, positively and responsibly to addressing the problem in self-organized adaptive ways, individually and collectively, in the context of their own lives and work. This process is essentially the same process that indigenous cultures have used for millennia to address such problems, and the same process used by ‘complex system’ methodologies like Open Space:
This learn-explore-imagine-converse-emerge-let-self-decide-on-action process is structurally similar but significantly different in methodology and responsibility than that outlined above for complicated problems. Each process respects the different characteristics of the problem/issue and appreciates the need for a different approach to it.
What I have observed over the past few years is encouraging: Organizations with enlightened leadership (and leaders with modest egos) appear to intuitively appreciate the limitations of the ‘boss-decides-in-a-vacuum’ approach to management, and are starting to involve line staff and customers more in at least the information-gathering (step 1) part of the decision-making process. This isn’t tapping the wisdom of crowds but it’s a big step in the right direction. Some organizations are even beginning to realize that prescriptive ‘solutions’ to complex problems (and generally all problems that involve human behaviour and interaction are complex) don’t work, and are starting to devolve authority and responsibility to individuals on the front line to make more tactical decisions.
I’ve seen less willingness to involve creative minds in organizations in imagining alternative solutions, to actually devolve decision-making authority to crowds, or to give individuals decentralized authority and responsibility to make strategic decisions. But perhaps as some brave organizations start to do this, successfully, others will follow.
Laterally-thinking readers will probably have realized that these processes aren’t limited to business or even organizational contexts. Think about its application to problems in a family context, where the larger community is the ‘crowd’ (if you’re lucky enough to live in a community whose members know and care enough about each other to qualify as a crowd under Surowiecki’s five criteria) — and you’ll understand what ‘ittakes a village to raise a child’ could really mean.
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