No slides. No PowerPoint.
Premise: Under the right conditions, groups of people can often be remarkably intelligent, often smarter than experts in the same context.
It's called collective intelligence. Several examples and stories given.
Generally speaking, the group can be smarter than an individual.
Example of who wants to be a millionaire: Experts get answers rights 2/3 of the time; the audience, however, gets the answer right 91% of the time.
Problems are not that difficult, but one would expect the experts to be right more often.
As the problems get more complicated, collective intelligence becomes more powerful.
Google's page-rank algorithm is an example of Wisdom of crowds - uses hyperlinks to count as votes.
Surowiecki gave examples of using prediction markets to predict presidential election outcomes, then talked about the idea of how organizations and set up and use internal prediction markets. Gave example of HP and their internal prediction market for printer sales - found to be more accurate than HP's own internal market research organization.
The value of tapping the wisdom of crowds is that it can get around the impediments of bureaucracies and hierarchies. Why? because bureaucracies and hierarchies make it difficult for information to get from where it is to where it needs to be
The problem is that hierarchies and bureaucracies set up incentives for people to:
- hoard knowledge
- tell their bosses and managers what they want to hear.
- deceive or game the system
Wisdom of crowds only looks at the focus of being right
The catch: It only works in some circumstances. You have to set things up.
How do we get around the problem?
Three Criteria for Wise Crowds:
1. Need a way of aggregating individual judgements to produce a collective judgement. (We are not talking about a suggestion box. although that's better than nothing.)
2. Case for diversity - it will dramatically improve your decision making - if you can tap it correctly. (We are speaking about cognitive diversity more than socio-ethnic or other aspects of diversity.) [Need to go back and listen to tape to explore his ideas on building a diverse organization and how to use collaboration and knowledge sharing tools to tap that wisdom.)
Diversity helps us avoid peer pressure [in thinking]
Gave examples; cited studies.
3. Independence - want people to rely upon their own information, knowledge and intuition rather than imitating others. Need to set this up correctly.
There is wisdom in crowds.
Much of that wisdom is overlooked or obscured by hierarchies and bureaucracies that are not conducive to knowledge sharing.
Collaboration and knowledge tools provide the flattener to allow crowds to gather and exchange information.
Knowledge is not always in the most likely place to look.
Individual experts sometimes make mistakes. We can reduce the number of mistakes by aggregating knowledge across a group. (A crowd).