Who`s Most Capable of Making Decisions?
Recently I reported some corporate backlash against James Surowiecki`s ideas in The Wisdom of Crowds
and its message that, if organizations were smart, they could dump a
lot of expensive senior executive and consultant/expert baggage and get
better decisions by putting critical questions collectively to
employees, customers and appropriately `qualified` elements of the
`general public`.The objections point out that `crowds` are not
great at doing everything. But that`s exactly Surowiecki`s point: The
very things that crowds are good at are precisely those things that executives, consultants and experts pride themselves on doing. A
couple of readers asked me if I could distill Surowiecki`s arguments
into some kind of decision tree to decide who is best to make
decisions. This is my response.We need to start by looking at
who the alternative decision-makers are, and what knowledge, skills and
talents they offer that are relevant to the decision-making process:Knowledge of the Problem (Context)Knowledge of Solutions that Have WorkedExperience Solving Similar Problems (Know-How)Knowledge of People that Can Help Solve the ProblemAbility to Imagine New Solutions that Might WorkKnowledge of Tools, Models `amp; Methods that Can HelpExecutives,Consultants,Sr. Managers,Other `Experts`ModerateModerateModerateModerateLowModerate to HighCreatives, Working IndividuallyLow (High after briefing)Low (High after briefing)ModerateModerateHighModerate to HighCreatives, Working CollectivelyLow (High after briefing)Moderate (High after briefing)ModerateHighHighHighQualified `Crowd`: Co-WorkersHighHighHighHighLowLowQualified `Crowd`: Current `amp; Potential CustomersVery HighModerateVery HighHighLowLowQualified `Crowd`: Informed PublicHighModerateHighHighLowLowResearchersLow (High after research)Low (High after research)LowLow (High after research)LowLow (High after research)Each IndividualVariesVariesVariesVariesVariesVariesThese
would be, I think, Surowiecki`s assessments, based on the research in
his book. They are also mine, based on thirty years of varied business
experience. The reason why executives, consultants, senior managers and
other experts don`t rate `high` in any of the six categories of
relevant capacities for decision making is (a) they are usually
individuals, and can only know as much as any busy individual can know,
(b) in the case of outside experts, they lack experience/context
actually working for the organization, and (c) in large organizations
executives are paradoxically sheltered from awareness of problems due
to the "bad news doesn`t travel upwards" (because "they shoot the
messenger") information behaviour that is endemic to our society. For those who haven`t read The Wisdom of Crowds, a `qualified
crowd` is one that is (i) intellectually diverse, (ii) independent and
objective, (iii) each member has access to unique knowledge, (iv) each
member is basically informed, and (v) each member is appreciative of
(cares about) the problem or decision at hand. Surowiecki identifies five things
that qualified crowds can -- if asked
appropriately -- be very good at:
ascertaining (all the) pertinent facts surrounding an issuepredicting outcomes
making a decision among a discrete set or finite range of
alternativesdetermining an optimal process to follow (in simple or
complicated situations, but not complex ones)assessing causality (in simple or complicated situations, but not
complex ones)
In all except the first type, the crowd must be given a set or range of
alternatives to choose from, and, when they are,`nbsp;Surowiecki says, the
`errors` in
judgement tend to cancel each other out, so that the crowd`s consensus
tends to be consistently better than that of executives, consultants
and other experts. If you don`t buy this, you`ll have to read the book
-- his argument is compelling and well-substantiated (it`s also
intuitively sensible).In situations of the first type, ascertaining (all the) pertinent facts surrounding an issue, the crowd
is contributing more collective knowledge than any small group of
`experts` could hope to have, and are `better` at doing this by sheer dint of numbers.So what happens in the real world when important decisions must be made? In my experience, this is the typical process:The
executives decide whether they have sufficient knowledge of the
problem, sufficient knowledge of solutions that have worked in the past
in similar situations, sufficient experience solving similar problems,
sufficient knowledge of people who can help solve the problem, and
sufficient knowledge of relevant tools, models and methods that can
help. Usually they decide they already have all these things (or feel
they should have them) so they do not consult others. If they don`t,
they tend to bring in outside experts, who lack contextual knowledge of
the problem. They may involve researchers. They are unlikely to involve other subordinates in the organization, or customers.The
executives decide whether they have sufficient capability to imagine
new solutions that might work to solve the problem. Usually they decide
they do (or feel they should) so they do not consult others. If they
don`t they tend to bring in outside experts, who lack contextual
knowledge of the problem. They may involve creative people within the organization, either individually or collectively. They are unlikely to involve other subordinates in the organization, or customers.The
executives decide all by themselves which of the alternative solutions
that have come from steps 1 and 2 to implement. That, after all, is why
they`re paid the big bucks.If you accept the capacities in
the chart above, the result of this `business as usual` process is
clearly sub-optimal. Consultants and other outside experts bring
precisely the capacities that the executives already have, and none of
the ones they lack. Involving researchers and creatives will improve
the quality of the decision somewhat, but not as much as involving the
crowd. And that assumes that nothing gets lost in the `translation` of
knowledge between the researchers, creative people and executives.
What`s worse, many researchers and creative people will tell the
executives what they want to hear, not necessarily the truth -- they
lack the independence and objectivity that `qualify` a crowd.Here by contrast is the optimal process, for complicated (not complex) problems:The
executives identify and qualify a crowd of co-workers, customers
(including prospective customers) and informed members of the public,
and interview them, in interactive sessions witnessed by the
organization`s creative people, to augment their (the executives` and
the crowd`s) collective`nbsp;knowledge of the problem,`nbsp;knowledge of solutions that have
worked in the past in similar situations,`nbsp;experience solving
similar problems, knowledge of people who can help solve
the problem, and knowledge of relevant tools, models and
methods that can help.The
executives then charge the creative people (who by virtue of their
involvement in step 1 now have a deep contextual understanding of the
problem and how to approach it) with imagining new solutions that might
work to solve the problem, working both individually and as a team.
These creative people do not assess or rank these potential solutions
-- their job is simply to identify alternatives.The executives
then canvass the crowd from step 1, presenting them with the solutions
that have worked in past, those which the executives based on their
experience think have potential, plus the alternatives that were
surfaced in step 2. The crowd makes the final decision.This learn-analyze-imagine-assess-decide-on-action
process involves each group of stakeholders doing what they do best. If
there are appropriate incentives for the crowd (and sometimes that`s as
simple as recognition and thanks), this process need not be cumbersome,
and to some extent it can be automated (members of the `crowd` can to
some extent self-qualify by
going through an online qualification survey, and step 3 can also be
done entirely online). It is course frightening to executives, because
it reveals their true, limited value in the decision-making process. In
fact just about anyone can perform the three steps above (they are
mostly administrative and facilitative), bringing into question the
need for highly-paid executives, and a hierarchical decision-making
organizational structure, at all. So this approach is clearly more
amenable to egalitarian, non-hierarchical organizations. It`s also bad
news for the consultants and outside experts -- they aren`t needed in
the process at all.Here, from an earlier article, are 25 business problems that such an approach might solve:How can we improve employee productivity?How can we reduce business/credit/security risk?How can we become more innovative?Should we outsource IT, KM, HR and/or marketing?Which of these new product ideas will be successful?What price should we sell this new or old product for?How will sales/prices be affected by future innovations?How will sales be affected by inflation, int. rates etc?How will material `amp; labour costs change in the future?How can we reduce our fixed costs `amp; overhead?How can we increase our market or customer share?How can we (a) find or (b) keep the best people?Which acquisitions should we make, at what price?How much is our company worth?What service/community wraparounds would work?How much should we be paying staff, management?Which companies should we partner with?Which functions should we centralize, decentralize?How should we penetrate a new market/demographic?How can we increase customer satisfaction/retention?Which suppliers should we use?How can we reduce employee theft, fraud, error?Where are we paying more taxes than we have to?How should we protect our intellectual property?What new businesses should we start, or spin off?I said that the above process is optimal for complicated problems. What about complex problems, like these?:`nbsp;Should our central bank raise interest rates next month, and by how much?`nbsp;What is the $US going to be worth, relative to the Euro or a global currency basket, this time next year?`nbsp;Which alternative voting system is the best?`nbsp;What`s the best way to motivate people in the third world to have fewer children?`nbsp;How could we break our dependence on fossil fuels within the next decade?What`s the answer to eliminating popular support in many countries for terrorist attacks?How can we fairly reduce global disparities between rich
and poor, and improve distribution mechanisms to get resources
desperately needed by the poor to their destinations?`nbsp;How can we motivate both polluters and the public to take appropriate steps to stop global warming?How can we create a health care system that offers quality, universal care affordably?How
can we create an education system that teaches critical life skills and
enables its graduates to be self-sufficient, productive, and informed,
engaged citizens?The process for such problems must of necessity be emergent,
rather than prescriptive as for merely complicated problems. Such
problems do not lend themselves to (anywhere near) `complete`
knowledge, rigorous analysis, determination of clear causality, or
predictability. In fact, such problems don`t have `solutions` per se
at all. What can emerge is a collective understanding sufficient to
allow all of the participants in the process to contribute
knowledgeably, positively and responsibly to addressing the problem in
self-organized adaptive ways,
individually and collectively, in the context of their own lives and
work. This process is essentially the same process that indigenous
cultures have used for millennia to address such problems, and the same
process used by `complex system` methodologies like Open Space:The
project champions constitute themselves and selected researchers
(perhaps including a qualified or self-qualified crowd) to collect,
organize and share as much relevant information as possible about the
problem/issue.The project champions then invite anyone with
sufficient passion around the issue to commit appropriate time and
energy to the project, to study the information collected in step 1 and
attend one or more facilitated, self-managed sessions to explore and
discuss the problem/issue. Those who accept the invitation become in
effect a second self-qualified crowd.The project champions
document the proceedings of these sessions and facilitate the
organization of groups to pursue collective actions emerging from them,
involving attendees and others as appropriate. But, most importantly,
each attendee is charged with the responsibility to pursue individual
actions and to individually initiate other collective actions involving
non-attendees, that they think make sense in the context of their own
life and work as a result of the understanding they have acquired from
the sessions.This learn-explore-imagine-converse-emerge-let-self-decide-on-action process is structurally similar but significantly different in methodology and responsibility
than that outlined above for complicated problems. Each process
respects the different characteristics of the problem/issue and
appreciates the need for a different approach to it.What I have
observed over the past few years is encouraging: Organizations with
enlightened leadership (and leaders with modest egos) appear to
intuitively appreciate the limitations of the
`boss-decides-in-a-vacuum` approach to management, and are starting to
involve line staff and customers more in at least the
information-gathering (step 1) part of the decision-making process.
This isn`t tapping the wisdom of crowds but it`s a big step in the
right direction. Some organizations are even beginning to realize that
prescriptive `solutions` to complex problems (and generally all
problems that involve human behaviour and interaction are complex)
don`t work, and are starting to devolve authority and responsibility to
individuals on the front line to make more tactical decisions. I`ve
seen less willingness to involve creative minds in organizations in
imagining alternative solutions, to actually devolve decision-making
authority to crowds, or to give individuals decentralized authority and
responsibility to make strategic decisions. But perhaps as some brave organizations start to do this, successfully, others will follow.Laterally-thinking
readers will probably have realized that these processes aren`t limited
to business or even organizational contexts. Think about its
application to problems in a family context, where the larger community
is the `crowd` (if you`re lucky enough to live in a community whose
members know and care enough about each other to qualify as a crowd
under Surowiecki`s five criteria) -- and you`ll understand what `it
takes a village to raise a child` could really mean.Ten Steps to a Radically Simpler Life, and a Scenario to Imagine
I`ve written before about Jim Merkel`s book Radical Simplicity, and "living simpler" is a key component of my What You Can Do
(to Help Save the World) list. But I`ve never really spelled out how
each one of us can achieve a radically simpler lifestyle without
hardship or significant sacrifice. So now I will:Building `amp; Maintaining a Simpler Home:
Buy or build a home that is designed for living simply. Follow the
Japanese model -- movable walls, multi-purpose, reconfigurable rooms,
and no wasted space. Use the roof as a permaculture garden, a solar collector, a meditation space, a water collector. Landscape with native species
that don`t need watering, herbicides and pesticides to flourish. Use
simple, durable construction methods and learn to do your own repairs
and preventative maintenance. Share your tools, know-how and time with
others in your community helping them and allowing them to help you
build and maintain your home.Simpler Furnishings:
Build storage into walls, so you don`t need furniture for storage.
Consider flooring (padded -- but not with chemical-laden carpets -- or
cushion-covered) that obviates the need for seating. Make both seating
and tables portable, adjustable and multi-purpose. Make them simple. Make them yourself, so you can repair and maintain them yourself. Simpler Utilities: Insulate. Use renewable energy sources. Collect rainwater. Use graywater
for irrigation and other purposes. Use compact fluorescent and LCD
lights. Use timers and setback thermostats. Turn off heat, A/C and
lights when you`re away or not using them. Dress to be comfortable when
it`s 80`#176;F indoors in summer and 60`#176;F in winter, and set thermostats accordingly.Eating Simpler:
Learn to make meals out of simple, unprocessed, raw ingredients. Buy
local, organic and fair trade products, and avoid processed and
chemical-laden foods. Learn to cook simple, quick meals. Follow the
French model -- learn about sauces, herbs and spices and how they
simply make raw foods exotic and nuanced. Become a vegan.Dressing Simpler:
Buy local, durable, hand-made clothing and personal-care products made
from natural ingredients and free of slave labour, animal products and
animal testing. Learn to make your own clothes, jewelery, accessories
and personal-care products. Climate permitting, stop wearing clothes
entirely. Simpler Fun:
Learn how to entertain at home, simply, creatively and inexpensively,
instead of having to "go out" to have fun. Rediscover simple pleasures
and share them with your community: sandlot sports, massage,
non-electronic games (like cards and charades), meditation, making
love, conversation, hands-on hobbies, playing with children and animals.Simpler Transportation:
Remember that every minute you spend walking adds three minutes to your
healthy life, so it "takes" no time at all. Put a carrier and light on
your bicycle and use it. Use virtual presence technology to reduce the
need to travel. Carpool. Drive a hybrid. Avoid flying as much as
possible. Simpler Investment:
Pay off your debts. Don`t get into debt. Don`t buy on impulse. Buy
stuff that lasts. Invest your time and energy in things that will make
you self-sufficient and resilient and which are recession-proof,
like your own sustainable business, know-how and fitness. Donate cash
you don`t need to responsible causes you believe in -- they`ll invest
your money with more focus and care than you probably can. If you can, work less -- and recapture time that will save you nearly as much as you have foregone in income, that will simplify your life further.Simpler Health Care: Take charge of your own health -- illness prevention, diagnosis and first-line treatment.
Preventing illness is cheaper and simpler than coping with it, but it
takes an investment of time. Learn how the system works, and when it
works in the interest of the patient and when it works against it. Simpler Education: Learn, and teach, how to learn.
When you and those you love have acquired that, use it to acquire
critical life skills, through self-education, collaborative learning
and home-schooling.None of these lifestyle changes entails
deprivation or forfeiture. Living with less `stuff` is a matter of
sufficiency, not efficiency or self-sacrifice. Living simpler isn`t something you do for
altruistic reasons -- it provides the very real, tangible, personal
benefits of greater independence and self-sufficiency, resilience,
control over your own life, personal freedom, more time for things that
matter, better health and well-being, and greater personal happiness. If you doubt this, consider this scenario:Imagine
you are single and free from any urgent responsibilities and
commitments, and you meet someone, K, at a party, to whom you are
strongly attracted in every sense. K invites you to spend the weekend
together at the intentional community in which s/he lives. You agree,
and spend a blissful, hedonistic and educational weekend. K spends
hours each day paying attention to and appreciating your body, your
mind and your ideas: Kissing, hugging, caressing, arousing, satiating,
washing you, brushing your hair, massaging you, walking, talking, just
sharing the moment, moonlight, candle-light, learning, teaching. At the
end of the weekend K invites you to stay for sixty days and learn and
explore more about K and the community. You are able to arrange for
work sabbaticals and to defer scheduled activities, so you say yes.
Over the next sixty days you discover that the intentional community is
clothing-optional and polyamory and that most of its members are young,
healthy, attractive people who were invited before you by K or by one
of K`s loves. On a couple of occasions, with K`s approval and
encouragement, you experience brief polyamory experiences yourself. The
community exemplifies a radically simple lifestyle in every respect and
has implemented the ten steps listed above. People in the community
rarely leave their communal home, but entertain many visitors, and the
group seems extremely happy, healthy, friction-free and egalitarian.
You grow to love many of the members of the community.Now the
sixty days is up and you are invited to join the community on a
more-or-less permanent basis. You ask what you should do about your
job, your home, and all your possessions still waiting for your return.
K tells you you can quit your job, and that all that would be expected
from you is to spend an hour or so a day continuing to do the work you
have been doing voluntarily and joyfully for the last sixty days --
gardening, cooking and coaching some of the community`s home-schooled
children. S/he also says you can sell or give away your possessions --
you haven`t missed them and won`t need them anymore -- and that you are
welcome to leave the proceeds in the bank in case you ever decide to
leave the community. Would you say yes?This
scenario makes the decision on adopting a radically simple lifestyle
easy: It`s just a choice of yes or no. My purpose for including it is
to help you imagine what such a lifestyle might be like, and appreciate
that it is not a subsistence lifestyle but a very rich and fulfilling
one. The scenario also demonstrates that radical simplicity is easier
to achieve and sustain when it is done with others in community instead
of just by you, or you and those in your household, alone. That`s not
to suggest that doing so alone, or just with your family, is not
possible or worthwhile -- just that by taking it to the next,
intentional community-wide level, radical simplicity becomes easier,
more sustainable, more powerful.Achieving radical simplicity is
a measured process, not something to be achieved overnight. To get
there, use the process that successful weight-loss and other lifestyle
change programs use: Set reasonable goals, take it one step at a time,
and measure your progress over the long term towards an ultimate
target. Don`t worry about progress or setbacks. It`s enough to be on
your way. It`s the journey that counts. Fare forward, fellow voyager.
<< Home