The Wisdom of Crowds: Collaboration

notes from Surowiecki, James. The Wisdom of Crowds. (Anchor: 2005).

Collaboration generates a diversity of perspectives and makes collaborators more individually productive.

“Division of cognitive labor” allows scientists to incorporate many different kinds of knowledge, and to do so in an active way (rather than simply learning the information from a book.)”

In small groups, the relationship is quantitatively different from that in a market. Small group individuals see themselves as members of their group, and the group has its own collective identity. Small groups can make very bad decisions, but they also have great potential.

Swing — a small group that works well has “swing” (term derived from the feeling of perfect synchronization in competitive rowing)

Ralph Cordiner, former GE chairman:

If you can name for me one great discovery or decision that was made by committee, I will find you the one man in that committee who had the lonely insight — while he was shaving or on his way to work, or maybe while the rest of his committee was chattering away — the lonely insight that solved the problem and was the basis for the decision.

“Gangster movies do a surprisingly good job of representing the challenges that are created anytime you try to get a group of self-interested people to work together to achieve a common good.”

  1. The Godfather Part II: top down hierarchy, with Michael Corleone as CEO figure,  makes decisions and has them carried out for him. Allows for long-term investments and planning, but information is not shared efficiently. There is little loyalty in the lower ranks, and the larger it gets the more these problems grow, the more isolated the top position becomes.
  2. Heat — Robert De Niro is the head of a small, tight-knit gang that “has the advantages that small, coherent groups have: trust, specialization, and mutual awareness of each member’s abilities.” Members can monitor each other (less slacking off) but ambitions are limited by resources.
  3. Asphalt Jungle or Reservoir Dogs — a group of individuals together to do a single job. People can be chosen based on individuals skills. Everyone has incentive to perform well. But it’s a lot of work to pull the group together, and there’s no guarantee of trust between members.

What the gangster film theory of business suggests is that no organizational model offeres an ideal solution. Once you leave the market behind to consciously organize individuals toward a common goal, you face inevitable tradeoffs. Companies want to retain the structure and institutional coherence of the traditional corporation. They want tightly knit groups to do much of the work at the day-to-day level. And they want to be able to have access  to workers and thinkers (if not safecrackers) from outside the corporation as well.

Corporations exist because they reduce the cost of getting large numbers of people to act in a coordinated fashion, to accomplish particular future goals, and because they make the future (of the company) more predictable.


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