Wisdom Of Crowds: Exploit Teams For Their Smarts

Wisdom of the crowd is the notion that the collective opinion of a diverse and independent group of individuals, rather than a single expert, yields better judgment. This concept is not new. It is prevalent in web resources that rely primarily on collective human knowledge: Quora, Reddit, Stack Exchange, and Wikipedia. A large group’s answers to questions involving general world knowledge and reasoning has, as a rule, been found at least on par, but often superior to, the answer of any of the individuals within that group. Put differently, we are not just stronger together physically, but smarter together mentally.

The idea is simply that the collective intelligence of a diverse group can result in better outcomes than those derived from a homogenous, centralized authority. For this to hold, each person has to have diverse information. Even if this is just a different interpretation of the known facts. Diversity in background, experience, and perspective enriches the pool of ideas and prevents narrow-mindedness. Individuals should form their opinions independently. This reduces groupthink and ensures each contribution is genuine. Decision-making ought to be distributed, allowing expertise to emerge without somebody dictating the narrative. The result? A very wise crowd.

Diversity is critical in making the wisdom of crowds work. It’s the foundation. A fundamental of creativity and decision-making. A heterogenous group brings multiple perspectives. Meaning richer discussions and more solutions. Individual errors get called and cancelled out. Conventional wisdom is challenged. Novel ideas that may never come to a homogenous group are cultivated as fields crosspollinate. Once again, collective ideas win.

Real-world implications of the wisdom of crowds:

• Finance: in stock markets, analysts’ forecasts vary widely. When aggregated, however, the collective forecast tends to win over individual predictions. Financial institutions use aggregated, crowd-sourced data to inform trading strategies and risk management;

• Crowdsourcing: platforms like Kickstarter and Indiegogo invite diverse opinions to solve complex problems or put forth and validate new ideas. Tapping into the collective intelligence of the group, companies are able to identify viable products and innovative solutions before they are ever introduced to the consumer;

• Politics: opinion polls aggregate the views of a diverse base of voters to predict election results. While not flawless, when done correctly, these polls act as an accurate snapshot of public sentiment;

• Academics: medical researchers use meta-analyses and systematic reviews to aggregate results from different studies. The combined data from various populations and domains serves as a source of robust conclusions about public health and treatment effectiveness;

• User-generated content: online reviews on Amazon or Yelp aggregate experiences from a big customer base, helping potential customers make informed decisions and smoothing out individual biases.

How you might exploit this mental model: (1) gather diverse inputs when faced with a problem or choice, actively seeking out a range of sources rather than anchoring on one; (2) if you have access to a team of individuals, create an environment where contribution is encouraged and valued, where folks feel free to express their views—or if that’s too hard, try anonymous feedback tools that mitigate social pressure; (3) implement aggregation mechanisms—voting, averaging, consensus-building, brainstorming—to combine individual inputs into coherent, collective judgments; (4) reflect how valuable diversity is and celebrate distinct viewpoints, understanding that they strengthen the team as a whole; (5) monitor and iterate, regularly evaluating the process so that the input is indeed diverse and independent.