The human brain is magnificently complicated, but it's wired to avoid complexity. Our decision heuristics have evolved from our survival instincts—which means we often respond quickly and don't explore our options. In the wild, a fast decision was better than no decision at all, but we live in a hypercompetitive and fast-paced world that requires us to make complicated decisions that often require some thought.
So how do we decide what's best, given our limitations as decision makers? One approach is to tap into the minds of the collective, something we can do now much more than ever before, thanks to recent technologies. Given our access to information markets, wikis, social networks, collaborative software and other Web-based tools, we're entering a new era of decision making.
The trick is, the proliferation of such technologies necessitates a framework for understanding what types of collective intelligences are possible and affordable.
Solving a problem entails two essential tasks: generating solutions and evaluating them. Our biases can easily get in the way. Often we seek out information that confirms our assumptions, and we'll maintain our beliefs in the face of contrary evidence. We can also be overly influenced by how solutions are presented to us.
What collective intelligence can do is mitigate those biases. Diversity of viewpoints combats some of our individualistic limitations. Some companies have begun to try to tap into this, with applications that concentrate on generating solutions. InnoCentive, for example, is a Web site through which companies can post a problem and solicit solutions—the winning entry receiving a cash prize. Other applications focus on evaluating. HSX, for instance, is a mock market in which users buy and sell futures for current movies. The results indicate the money-making potential of those releases. Still other applications consider both idea generation and evaluation. The Digg Web site asks participants to contribute stories and then vote on them. The most popular entries are posted on the home page.
An application that taps into collective decision making sounds simple, but can be difficult to implement. As with many systems, the devil is in the details. Collective decision making has been largely empirically driven until now. And for every success like Wikipedia, many projects have failed. At a minimum, managers need to consider some of the following issues.
The first issue concerns losing control, which can manifest in several ways. A collective might make a decision that harms a company. It could also take the form of unpredictability—a decision might not be bad, but the organization could be unprepared to deal with it. Another issue is unassigned liability: Who is responsible for a poor decision? One of the biggest questions becomes whether to include outsiders in the decision-making process. Bringing in those from the outside means you might disclose information to the external world or provide a forum for people who don't have your organization's best interests at heart. If the collective veers in an unexpected and potentially harmful direction, the resulting damage could be difficult and costly to contain. On the other hand, tapping into the diversity and expertise of the outside world could lead to superior outcomes.
Another issue involves striking the right balance between diversity and expertise. Certain problems lend themselves to a diversity-based approach more than others, but no amount of diversity will help if the participants are ignorant of the issues. The actual composition of diversity also is important. In the same way that sampling biases exist in polls, the diversity of a large population can be skewed, leading to distorted decisions. Organizations thus need to decide which people to involve, based on the ability of those individuals to understand the problem at hand and collectively make positive contributions to solving it. Consider Pallokerho-35, a Finnish soccer club. A few years ago, the coach invited fans to help determine the club's recruiting, training and game tactics by having them vote using their cell phones. The season ended in disaster, with the team firing its coach and scrapping the fan-driven decision making. The lesson here is that many applications require a large number of participants, but those individuals still must have the necessary knowledge to make useful contributions.
Perhaps the trickiest issue of all is mechanism design, which addresses numerous basic questions. For instance, should every participant be given an equal voice, or should some have greater say? If the latter, how do you select those individuals? Designing the right frame for collective decision making is neither simple nor straightforward, and the rules of engagement can make an enormous difference in the outcome.