In his famous book “Wisdom of the Crowds” James Surowieky has brilliantly explained how a number of average people can pool their collective wisdom to make outstanding estimations, decisions and predictions, better than what many brilliant people achieve individually. He does not claim that this is a magic solution. Neither does he claim that if zillion monkeys are given typewriters, possibly we will see the complete works of Shakespeare. (If that was the case we should be seeing at least one at www!). He is making a point that if we find a method for pooling together inputs from a large number of independent individuals with divergent views, then there could be many questions where the crowd would can come up with better results.[1]
Nature has also endowed such skills and processes to harness collective wisdom of agents who are individually endowed with limited knowledge and skill to build brilliant solutions. The way ants forage for food, the way bees select locations for their new hive, the way termites build mounts with weather control systems using natural energy with the sophistication that human beings have not yet achieved, are a few examples of how nature uses the wisdom of the crowds [2]
Democratic process we use in election of government, price discovery of goods and services in the markets and exchanges where various assets are traded among a large cross section of participating agents are examples how humans harness this wisdom of the crowds.
There are a few critical requirements for achieving meaningful results from large groups. They are: (i) diversity of knowledge of participants (ii) independence exercised by the agents (iii) mechanisms to pool this divergence; that bring about unimaginable solutions.
In the animal kingdom of ants and bees, this divergence and independence is hardwired. Human beings are also capable for this divergence; however there are many contexts and environmental conditions where this fails and the crowd or mob behaviour set in; where divergence fails and the group follows some crazy bubbles, fads or madness. (There are examples of such mob behaviour also among animals when nature uses this to trim overcrowding)
We have seen this in market bubbles, we have seen this in the similarity of strategies used my multiple fund managers, we have seen this in mob violence and so on. This depends on the context and the environment. Sometimes this is also misused by political leaders to serve their purpose.
Not just bee colonies or exchanges can benefit from the wisdom of the crowds, companies can also benefit by building environment that encourage diversity and dissent. Many company leaderships and bureaucracies don’t nurture environment for such dissent. The hierarchical structure and the feudal culture often suppress dissent, insecurity of the leaders encourages sycophancy and misguided sense of loyalty promotes conformance. Dissent is often equated to disloyalty to the organisation whereas it could be an expression of true loyalty. As Howerd Zinn observed; “Dissent is the highest form of patriotism”
Orson Welles has expressed this with a very interesting, rather cynical, example in his book ‘The Third man’: “In Italy for thirty years under the Borgias they had warfare, terror murder and bloodshed. But they produced Michelangelo, Leonardo da Vinci and the renaissance. In Switzerland they had brotherly love; they had five hundred years of democracy and peace. And what did they produce? The cuckoo clock!” [3]
This is not to suggest that the companies should encourage violence and conflicts. But it is essential to encourage diversity, dissent and competition for good ideas, if we plan to build performing teams. Very often in the normal corporate settings this does not occur naturally unless leaders actively encourage and incentivize such behaviour.
“Loyalty to the country always. Loyalty to the government when it deserves it” Mark Twain
1. Wisdom of Crowds, James Surowieky
2. Smart Swarm, Peter Miller
3. The Ape in the corner office. Richard Conniff
Nature has also endowed such skills and processes to harness collective wisdom of agents who are individually endowed with limited knowledge and skill to build brilliant solutions. The way ants forage for food, the way bees select locations for their new hive, the way termites build mounts with weather control systems using natural energy with the sophistication that human beings have not yet achieved, are a few examples of how nature uses the wisdom of the crowds [2]
Democratic process we use in election of government, price discovery of goods and services in the markets and exchanges where various assets are traded among a large cross section of participating agents are examples how humans harness this wisdom of the crowds.
There are a few critical requirements for achieving meaningful results from large groups. They are: (i) diversity of knowledge of participants (ii) independence exercised by the agents (iii) mechanisms to pool this divergence; that bring about unimaginable solutions.
In the animal kingdom of ants and bees, this divergence and independence is hardwired. Human beings are also capable for this divergence; however there are many contexts and environmental conditions where this fails and the crowd or mob behaviour set in; where divergence fails and the group follows some crazy bubbles, fads or madness. (There are examples of such mob behaviour also among animals when nature uses this to trim overcrowding)
We have seen this in market bubbles, we have seen this in the similarity of strategies used my multiple fund managers, we have seen this in mob violence and so on. This depends on the context and the environment. Sometimes this is also misused by political leaders to serve their purpose.
Not just bee colonies or exchanges can benefit from the wisdom of the crowds, companies can also benefit by building environment that encourage diversity and dissent. Many company leaderships and bureaucracies don’t nurture environment for such dissent. The hierarchical structure and the feudal culture often suppress dissent, insecurity of the leaders encourages sycophancy and misguided sense of loyalty promotes conformance. Dissent is often equated to disloyalty to the organisation whereas it could be an expression of true loyalty. As Howerd Zinn observed; “Dissent is the highest form of patriotism”
Orson Welles has expressed this with a very interesting, rather cynical, example in his book ‘The Third man’: “In Italy for thirty years under the Borgias they had warfare, terror murder and bloodshed. But they produced Michelangelo, Leonardo da Vinci and the renaissance. In Switzerland they had brotherly love; they had five hundred years of democracy and peace. And what did they produce? The cuckoo clock!” [3]
This is not to suggest that the companies should encourage violence and conflicts. But it is essential to encourage diversity, dissent and competition for good ideas, if we plan to build performing teams. Very often in the normal corporate settings this does not occur naturally unless leaders actively encourage and incentivize such behaviour.
“Loyalty to the country always. Loyalty to the government when it deserves it” Mark Twain
1. Wisdom of Crowds, James Surowieky
2. Smart Swarm, Peter Miller
3. The Ape in the corner office. Richard Conniff
very interesting article
ReplyDeleteMost companies have a top-down approach and miss getting valuable employee inputs. But the more successful and long-lasting companies are the ones that listen more than talk. I guess thats one of the factors that separate the good from the great.
ReplyDeleteAnd as companies grow in numbers, more than the willingness, its the process (to get feedback) that often is a bottleneck. But with technology catching up, there are quite a few ways social platforms are being integrated in innovation-hungry corporates to increase communication. One of the innovators in this area is Andrew McAfee who coined the word Enterprise 2.0 - read his blogs and books, very insightful on the tech aspects of social enterprise and innovation - http://andrewmcafee.org/
Michelangelo, Leonardo da Vinci and the renaissance are not the creation of the war and blood shed in Italy. Nor is The cuckoo clock to be undermined because it got produced in a very peaceful country. Had the cuckoo clock been produced in Italy, I am sure there would have been lot of appreciation only because it got produced in midst of warfare and bloodshed. Let the conditions of the geography be separated from the appreciative creations of some people of the country. Creativity (be in work of Michelangelo, Leonardo da Vinci or the one who thought of creating cuckoo clock ) is equal and respected equally. Resistance (because of which normally war and bloodshed happens) is good but history is witness that not necessarily it always gives good results. Wanting to differ and do something which one believes is better for the over all community is good but at times it is better not do dare untimely.
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