The Grey Chronicles

2008.December.27

The Wisdom of Crowds


James Surowiecki, (1998) explains in his Random House book published that in order for a crowd to be smart it needs to satisfy four conditions: Diversity, Independence, Decentralization and Aggregation.


Diversity. A group with many different points of view will make better decisions than one where everyone knows the same information.”

Annotations: As they usually say: two heads are better than one. Diversity means variety, and with that each person’s viewpoint is ruled by one’s knowledge, skills and attitudes. In diversity, there is also a quality of ideas. Instead of relying in only one point of view, the vista is much more clearer if seen by others. A group advocating similar ideas is much better than a lone human being fighting a battle all by his lonesome.


Independence. People’s opinions are not determined by those around them. AKA, avoiding the circular mill problem.”

Annotations: Although working in a group or team, each individual is entitled to one’s own opinion. Otherwise, if these opinions are disrespected, we are not human enough, but rather angry beast out to devour each other. In groups there is cohesiveness, at least; but surely individualism should not be ignored. It’s never good for social creatures, such as ourselves, to be alone. The company of loneliness is just misery!


Decentralization. Power does not fully reside in one central location, and many of the important decisions are made by individuals based on their own local and specific knowledge rather than by an omniscient or farseeing planner.”

Annotations: If power resides in one central location, it’s autocracy. If it resides on everyone else’s, then its chaos! Better read the power principles stated in Machiavelli’s The Prince. Decentralization is not necessarily disengagement, but rather giving personal space to everyone else makes creative thinking more creative, and innovative tinkering more innovative. I could not think properly if someone is looking behind my shoulders.


Aggregation. You need some way of determining the group’s answer from the individual responses of its members. The evils of design by committee are due in part to the lack of correct aggregation of information. A better way to harness a group for the purpose of designing something would be for the group’s opinion to be aggregated by an individual who is skilled at incorporating differing viewpoints into a single shared vision and for everyone in the group to be aware of that process (good managers do this). Aggregation seems to be the most tricky of the four conditions to satisfy because there are so many different ways to aggregate opinion, not all of which are right for a given situation.”

Annotations: Aggregation is done effectively by brainstorming, i.e., polling ideas—as absurd as or as out-of-this-world as they maybe, correct or wrong—from everybody else is better than having nothing to contribute. People are unlike dots in a graphs that you can declare as outliers. People only cooperate if they understood their part in a team as a contributor. In this technological age, with social networking and interconnectivity, emerging software technologies could aggregate information in more way than one. Think of it as creating a wiki of ideas.


“Satisfy those four conditions and you’ve hopefully cancelled out some of the error involved in all decision making: If you ask a large enough group of diverse, independent people to make a prediction or estimate a probability, and then average those estimates, the errors of each of them makes in coming up with an answer will cancel themselves out. Each person’s guess, you might say, has two components: information and error. Subtract the error, and you’re left with the information.”

Annotations: This is also called Participative Management. Let them do their jobs, but the decision still rests on your shoulders. Leadership is only part of management, but do not forget, that first and foremost, you are a human being dealing with human beings. Errors are the spices of decisions, but remember that two rules of errors: dispelling them or overestimating them could prove disastrous in any decision.


Notes:

Machiavelli, Nicolo (1972). The Prince. New York: Pocket Books, 1972. back to text

Surowiecki, James (1998). The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations. back to text

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