Wisdom of crowds — except at work?

James Surowiecki has written about The Wisdom of Crowds, and many Web 2.0 services such as Wikipedia are based on the idea of “crowdsourcing,” as Wired magazine put it — aggregating contributions from many people to produce some kind of definitive result. But does that kind of thing work in the enterprise? J.P. Rangaswami, a former economist and financial journalist who blogs at Confused of Calcutta, has a great post in response to a recent opinion piece in Inc. magazine that argues it does not.

The piece by David Freedman has the ring of Nick “The Prophet of Web 2.0 Doom” Carr about it, with comments such as “the effectiveness of groups, teamwork, collaboration, and consensus is largely a myth” and “Our bias toward groups is counterproductive. And the technology of ubiquitous connectedness is making the problem worse.” A cheerful guy, this David Freedman. He goes on to cite numerous studies that find “groupthink” is a serious problem in corporations, because “groups often breed a false confidence that leads to unsound decisions none of the individuals in the group would have made on their own.”

It’s worth noting that much of what Freedman is talking about when it comes to group decisions — and by extension decisions that are made by collaborative tools such as email, online conference tools, etc. — is a problem because of inter-company dynamics such as being afraid that your boss might find out that you said his idea was the stupidest thing you’ve ever heard. To the extent that Web 2.0 apps help take advantage of “anonymous” groups, as it were, this isn’t a problem.

In any case, I won’t summarize all of Freedman’s arguments here. It’s worth reading them — and comments such as “Simply put, when you make it easy for everyone to put in his two cents, with little filtering or accountability, the scum tends to rise to the top.” And it’s worth reading what Rangaswami says in response.

While Freedman dismisses virtually all collaborative software as being just another producer of noise, when what is needed are strong individuals making decisions alone (nice management model, Dave — were you in the army by any chance?) Rangaswami makes the argument for informed consensus, which Web 2.0-style tools can help to bring about.

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