Dave Pollard's environmental philosophy, creative works, business papers and essays.

trust your instincts

< £ Salon Bloggers & >

	June 5, 2004

THE WISDOM OF CROWDS James Surowiecki, the financial reporter for The New Yorker, has a new book out called The Wisdom of Crowds. It is essentially about decision-making, and the two most fatal (and ironically, almost opposite) judgement errors we make when making decisions: Groupthink -- the tendency of people's judgement to coalesce around a single point of view (and not necessarily the most logical or wise one). You can witness this with a group that wants to believe something -- the members tend to attach too much credibility to assertions that support that belief, and deny, or not even hear, assertions that contradict it. Arrogance -- the tendency of those with power and influence to believe their experience or gut feeling is more reliable, more credible, than the consensus of advisors, focus groups, or even customers. Some CEOs even pride themselves on their ability to make critical decisions with imperfect information, and feel that asking for such information is unnecessary, or even a sign of weak leadership. The consequences of both types of flawed decision-making can be catastrophic, and constitute what I have called the cost of not knowing. I have cited Surowiecki before in this blog, and I have enormous respect for his sharp, challenging mind. His is no conventional wisdom -- he's imaginative, brilliantly logical and profoundly skeptical. Groupthink can be prevented, he says, by ensuring the group has intellectual diversity, independence (from each other) and is neither too centralized nor too decentralized. A group with these qualities is inherently more knowledgeable and its judgement more sophisticated, informed and reliable than any CEO or 'subject matter expert' that business, with its cult of leadership, tends to rely on for making critical decisions. The greatest knowledge failures in recent history are preventative failures, sins of omission -- notably 9/11, SARS, bird flu, BSE, the Great Blackout of '03, Enron and other corporate rip-offs, and, in Canada, the Walkerton e coli deaths, not to mention many murders and other crimes. To what extent did our failure to prevent such disasters result from simply not having critical information, and to what extent were these failures aggravated by groupthink or individual arrogance? Was groupthink on a very large scale behind the dot com bubble, and is it happening again now? And is the dearth of genuine innovation in large organizations also partly attributable to these judgement errors? Surowiecki tackles these questions thoroughly and provocatively, and proffers some steps we can take to employ the wisdom of crowds (or, more precisely, substantial, informed, well-designed decision-making and decision-influencing groups) to prevent groupthink or arrogance from producing knowledge failures. But Surowiecki's most unsetlling lesson is that much of the time, these failures arise not (or at least not just) because we don't know, but because we don't want to know, or don't care to know. Painting above is Van Gogh's 'Pollard Birches'. Pollarding is the process of harvestiing the tops off trees without killing the tree, so that they grow back. Its earliest practitioners gave me my surname. 10:46:53 AM  trackback []  comment []

THAT'S AWFULLY PERSONAL: DO WHAT YOU WANT Here is my answer to this week's That's Awfully Personal question: Q: You wake up in a strange new world where everyone gets paid the same salary no matter what they do for a living, even if there's no obvious 'market' for it, and no matter how many hours a week they work at it. And everything costs 'whatever you can afford'. What would you do for a living? Is this something you're already good at, or something you'd like to *become* good at? What kind of people would you like to work with, or would you prefer to work alone? And what would you do with your new-found leisure time? A: For a living, I'd study and report on the languages of other animals, so that ultimately we could learn to talk to them, and learn from them (more than we do already). I have some skills that would help: Strong analystical and problem-solving ability, creativity and communication skills. But I'd need to study linguistics, to be a better listener, and to pay more attention to detail. I'd like the project to be self-managed, and the team working on it to be self-selected (that means we would pick each other, not that I would pick the team). My spare time would still be spent as it is now -- writing -- though I would probably also spend more time talking with, perhaps in a teaching/coaching (but not lecturing) capacity, young people. If you're interested in playing That's Awfully Personal each week, the questions, and a complete explanation, can be found here. 10:23:33 AM  trackback []  comment []

© Copyright 2004 Dave Pollard. Last update: 01/07/2004; 12:24:48 PM.