Updated 4/12/09. I was handing out this book to all my friends and colleagues at work, especially our president, who seemed to think a small coterie of sycophants was all he needed.From an earlier review I wrote some time ago: Wisdom of Crowds is a very insightful book about how we make decisions. The author describes the dangers of homogeneity in promoting group think, something we will begin to see more of in the Bush second administration as he builds his Cabinet with "Yes" men and women. Analysis by social scientists shows that decisions made by groups that permit little diversity are often wrong and conformity to adhere to the majority opinion can be very strong. Solomon Asch 's studies on conformity showed that an individual would often agree with the group even if there was overwhelming evidence to the contrary. For example, when presented with a card showing lines of different lengths and asked to pick the shortest one, subjects would almost always pick the one chosen by other members of the group (the experimenter's confederates) even when it was obviously not the shortest.
Many of Surowiceki's arguments seem counter-intuitive, but he cites a fair amount of evidence that the best decisions, on average, are always made by groups rather than individuals regardless of their expertise. In fact, he says: "... the more power you give a single individual in the face of complexity and uncertainty, the more likely it is that bad decisions will get made."
For the group decision-making process to work the best, several elements must be present.
1. A formal process for encouraging disagreement must be present;
2. The group must consist of stakeholders and non-stakeholders, i.e., people normally not part of the group should be present to make sure diversity of opinion is present. Diversity guarantees that multiple perspectives are brought into the decision-making process and that a broader range of information is included;
3. the group must belief and see that it has the responsibility for making decisions. If the decision is made elsewhere, the result is the opposite, i.e., bad results or at least not the best;
4. individuals be independent and have that independence respected to avoid being swayed by a leader or one powerful individual,
5. and there be a process for aggregating the opinions. It's important that pressure to conform be suppressed.
An intelligent group does not ask of its individual members to conform to the dominant view. Instead it creates a mechanism that resembles a democracy or a market. Individual group members get the opportunity to bring in their own information and opinions and are not forced to change their views. Their independence must be explicitly protected.
Much like army ants in a circular mill who die from exhaustion following a lost leader, humans will often indulge in group think and group action even if it is not in their interest to do so. And the more influence we exert on one another the more likely we are to become collectively dummer. A very good argument for encouraging independent thinkers and nay sayers.
The first half, or so, of the book is theory (sounds dry, but it's really quite fascinating) followed by some case studies.
