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The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations

by James Surowiecki

(New York: Doubleday, Publisher, 2004, ISBN: 0385503865)

Sometimes you do something, and it works. It is only years later that you fully understand what prompted you to do what you did, or why it proved successful.

I recall many years ago, when I was an elementary school principal, I prepared for the new school year by reminding teachers that the supervision of children before and after school and during recess and lunch breaks was an inescapable part of the job. At the same time, I invited them to develop a plan for supervision.

The teachers were divided into groups for this project. No specific instructions were given other than to discuss the topic, appoint a representative who would meet with the representatives of the other groups, and develop a plan that would be presented to the administration.

I had no idea what to expect from this process, and what the staff came up with was nothing that I could have anticipated. Frankly, what they proposed was far better than any plan that the vice principal and I could ever have devised. Their plan for supervision was innovative, focused on the needs of students and differed from the traditional approach still used in many schools today. More importantly, it proved successful, reducing the number of behavioural problems and having a positive impact on the school's learning environment.

Now, a quarter century later, I have a better understanding of what happened and why it worked, thanks in part to a recent book by James Surowiecki. In the Wisdom of Crowds, Surowiecki extends the old adage that “two heads are better than one” to suggest that many, even if they are unsophisticated and relatively uneducated on the topic, will come to better conclusion than an elite group of experts. “The idea of wisdom of crowds is not that a group will always give you the right answer, but that on average, it will consistently come up with a better answer than any individual could provide,” he writes.

With examples drawn from everyday life, business, science, government, the stock markets and Las Vegas book makers, Surowiecki builds support for his point of view. Some of his strongest arguments come from the simplest of examples.
In 1906, visitors to the West of England Fat Stock and Poultry Exhibition were invited to guess the weight of an ox after it had been slaughtered and dressed. Butchers, farmers and people unrelated to the agricultural industry all joined the contest. Francis Galton collected all the guesses, totaled them and discovered that the average guess was within one pound of the actual weight of the butchered animal.

The television show Who Wants to be a Millionaire provides another example. When contestants were stumped by a question, they had the option of phoning a friend or asking the audience. Over several seasons, the audience more frequently identified the correct answer than did the knowledgeable friends.

Other anecdotes cited by Surowiecki are more serious. On the day of the 1986 Challenger explosion, investors immediately began to sell shares in the four companies that provided major components of the space shuttle. The price of shares in three companies dropped about 3 per cent, before beginning to rebound. Shares in a fourth company, Thiokol, dropped 12 per cent and did not recover.

Without the benefit of any public speculation by NASA officials about the possible cause of the explosion, investors decided that the fault was in the booster rockets and began to divest themselves of the manufacturer's shares. Months later, investigators determined that the booster rockets were, in fact, the cause of the fatal crash.

Surowiecki suggests that four conditions should exist to benefit from the wisdom of the larger group: diversity of opinions (everyone brings their private information to the task), independence (people's opinions are not determined by the opinions of others around them), decentralization (people are able to specialize and draw upon local information) and aggregation (there exists some way to gather information to make a collective decision).

These conditions were present in 2003, in the aftermath of the SARS outbreak. In labs around the world, scientists worked independently searching for the solution to the mystery disease. No single line of inquiry was followed by all the researchers. Different sources of information were explored. Once a week, the scientists met via teleconference to report their progress, to learn from others and to modify their investigations.

In Surowiecki's view, organizations put too much trust in the people at the top and don't listen to the collective wisdom of other members of the organization. By asking, listening and not beginning with an assumed consensus mindset when discussing issues, organizations can find better solutions and make better decisions.


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A professional trainer, speaker, and consultant since 1995, Nelson Scott works with organizations that are committed to making the right hiring decisions, developing and retaining productive staff, and strengthening relationships with customers.  Learn more by visiting or e-mailing


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