Wisdom of Crowds

If you haven’t already read it, I’d like to direct your attention to an absolutely fantastic book called Wisdom of Crowds, by James Surowiecki. In it, Surowiecki argues that the decision-making and predictive power of diverse groups of people greatly exceeds that of most individual “experts”. The book is remarkably comprehensive and convincing, and the case studies in it will inspire and amaze you.

Wisdom of Crowds opens with a nice example: 800 people at a livestock exhibition participated in a contest to guess the weight of a live ox (on display) after slaughter and preparation. Some of the 800 were butchers and so-forth; people who should make a good guess. Many contestants were ordinary people with less “relevant” knowledge. But no expert within the competing pool beat the average guess of the group as a whole, which came within one pound of the true weight (1,197 lbs instead of 1,198).

If you’ve ever wondered why almost nobody can consistently beat the stock market over long periods of time, Surowiecki’s book will help you to understand why, and what you can do to foster the wisdom of crowds within your own organization. And the great thing about Wisdom of Crowds is that it also explains the factors that cause groups (including the stock market as a whole) to falter at key moments. For example, the ’99 market bubble and bust. If you want to avoid the dangers of group-think within your organization, reading this book will help.

I read Wisdom of Crowds back when it was first published a couple of years ago. The reason I’m writing about it now is because I had a conversation with someone who asked me if Blink (written by Malcolm Gladwell) contradicts Wisdom of Crowds. I do not believe that it does. Blink argues that, under the right circumstances, individuals (especially some experts) can make extraordinary accurate judgements by relying on the near-instantaneous, sub-conscious processing capabilities of the mind.

Even if you buy this (and IMO, it isn’t clear from the book that snap judgements are more likely to cause good than harm in any scenario) there isn’t necessarily a contradiction. It is theoretically possible that, in most cases, the snap judgements of individuals within a diverse group may still be (collectively) more accurate the the snap judgement made by a single expert. If you’re interested in exploring this matter further, check out this (all-too-brief) debate between Gladwell and Surowiecki.

Anyway, I think that Wisdom of Crowds should be required reading for every business person and producer in the video game industry. Learning how to rely on your co-workers (and customers, and partners) to help make key sales predictions and development decisions could make the difference between success and failure. And, by the way, you’ll feel 100 times better about living in a democracy (and about humanity in general) after reading this book. 🙂

PS. Now, here’s an interesting question: can the wisdom of crowds be applied to design? Most designers shudder at the very thought of “design by committee”, and perhaps the artistic/individualistic nature of design makes it incompatible with a group approach. But why does it need to be “design by committee?” What about a design approach that is driven by an individual (or very small group) but includes frequent, comprehensive group consultation? When you get right down to it, that’s just another way of saying frequent user testing — something that I (and many others) have been arguing in favor of for a while now.

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