The Wisdom of Crowds Revisited
My earlier post on the collaborative approach to portfolio management from Inkling prompted me to pick up my copy of The Wisdom of Crowds by James Surowiecki.
It’s a fascinating read whereby Surowiecki proposes and illustrates that a co-ordinated ‘wise’ crowd will make better decisions or solve problems quicker than a leader or expert.
Of course the devil is in the detail of what constitutes a ‘wise’ crowd – the author states diversity (of opinion), independence (from influence) and decentralisation (of control) as the key factors.
The other important issue is the efficiency and accuracy of the mechanism of co-ordination. Technology obviously provides better and better ways of achieving this.
It’s not a theory I would wholeheartedly endorse but it’s certainly worth bearing in mind when the considered ‘wisdom’ doesn’t appear to be working…