“If we only knew what we know.”
— Jerry Junkins
“The many are smarter than the few” refers to the power of Collective Intelligence. Leaders can use this power to solve a complex problem or make an important decision by harvesting a broad spectrum of ideas, views, and opinions and synthesizing the insights.
In his fascinating book, The Wisdom of Crowds, New Yorker business columnist James Surowiecki explains why the power of Collective Intelligence is not widely understood.
We often think of groups and crowds as stupid, feckless, and dominated by the lowest common denominator. But look around. The crowd at a
racetrack does an uncannily good job of forecasting the outcome, better in fact than just about any single bettor can do. Horses that go off at
3-to-1 odds win a quarter of the time, horses that go off at 6-to-1 win a seventh of the time, and so on.
Consider what happens on the TV game show Who Wants to Be a Millionaire? Contestants have the option to either call an expert or poll the audience to help them get the correct answer.
How often is the audience right compared to the expert? On average, the audience is correct 91% of the time, and the expert is right only 65% of the time. Why does the audience do so much better?
An old saying states that ‘two heads are better than one’ and many heads are even better. There is ample evidence to support this, over a century of documented examples of large, diverse groups producing amazingly accurate answers.
In 1906, a British researcher visited a livestock fair and found an intriguing contest. An ox was on display, and the villagers were invited to guess the animal’s weight. Nearly 800 people participated, and the results were astonishing. The average of the 800 guesses was 1,197 pounds. That was only one 1 pound less than actual weight—99.9% correct.
In the 1920s, a series of social psychology studies at Columbia University found that the “wisdom effect” is a natural outcome: a large sample of imperfect
estimates tends to cancel out extreme errors and converge on the truth.
In the aftermath of World War II, the military funded
Project RAND to create a more accurate approach to forecasting than traditional methods. The result was The Delphi Method, a process in which a diverse group of experts answers a series of questions anonymously.
Since the 1950s, the Delphi method has been widely used in the private sector because it consistently increases forecasting accuracy.
For example, the Delphi Method has predicted the sales of new products with
an average accuracy of 96%–97%, compared with quantitative methods at 85%–
90%, and traditional forecast methods at 80%.
How to Think Strategically in a Warp Speed World
How does the Delphi Method work?
• A diverse group of experts in a field answer questions anonymously.
• A neutral facilitator processes the responses, filtering out irrelevant content and organizing the ideas by themes.
• The participants receive the theme report and comment on themes and the ideas of others.
• At any time, participants are free to revise their earlier responses.
It is interesting to note that people tend to stick to their opinions in typical meetings, regardless of new information. Yet during Delphi sessions, they are far more flexible and willing to change their mind.
Over the years, I have witnessed countless examples of extraordinary results when you tap Collective Intelligence under ideal conditions, which include:
• Deliberate Diversity. There is a group of people with different areas of expertise, different ages, genders, ethnicity, life experiences, and thinking styles.
• Psychologically Safety. The group operates in an environment that encourages freedom of expression without fear of reprisals by leaders or colleagues.
• Shared Cognitive Challenge. There is a set of simple but profound questions about a complex problem or an important decision.
• Leveraging Technology. Digital collaboration tools are used to instantly collect responses and refine insights via rapid, iterative feedback cycles.
When a group thinks together under these conditions, Collective Intelligence emerges. Because of the combined knowledge, experience, and unique perspectives, the group is better than an elite few at all aspects of strategic thinking: exploring the future, solving complex problems, fostering innovation, and making strategic decisions.