Jeffrey Saltzman's Blog

Enhancing Organizational Performance

Imaginary Decision Making

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Imagine a clear glass jar full of gum balls. Imagine 100 people trying to guess the correct number of gum balls within the jar in order to win some fabulous prize. Say you took those 100 people and randomly split them into 2 groups of 50.  Within one group you would take an average of the 50 independent responses to the number of gum balls and that would be their guess as to the total number of gum balls within the glass jar. The second group would also make 50 independent guesses but there would be no averaging of the responses, no collaboration. So there would be 51 guesses competing for the prize, one, an averaged response and 50 other single person responses.  

If you were a business person and the success or failure of your business depended on correctly guessing the number of gum balls in the glass jar which approach would you go with, the average response of what 50 people thought or one of the 50 individual guesses? What if your business success depended on having the best track record over a sustained period of time? The equivalent of repeating the above experiment about 100 times, say once a week for 2 years. Which approach would yield the best long term track record for your business?

When this experiment is actually played out the results may or may not surprise you. The best guess is often times not the average of the 50 independent responses. The best guess is often times from one of the 50 whose responses were not averaged, but as you repeat the experiment 100 times, the person who made the best guess will change each time. Your odds are 1 out of the 50 that you would select the person with the closest guess on the number of gum balls. The group whose responses were averaged will often score number 2 or number 3 if you were to rank the guesses from best to worst, but they will do so consistently.

As a business person does it make more sense to take a crap shoot and go for the 1 chance out of 50 that you will select the individual who will provide the best guess this time, or will your company prosper more if you consistently were able to score in 2nd or 3rd place? If there are no prizes for scoring in 2nd or 3rd place maybe you would take the crap shoot, but sustained consistent performance on the part of a business is often much more highly rewarded than a strategy that gets it right one time out of fifty.

This is a very simple depiction of Critical Mass Decision Making, as described in The Wisdom of Crowds, by James Surowiecki.  The basic theme of Critical Mass Decision Making is that large groups of people have within them a type of group intelligence that if properly unlocked can be very beneficial for organizational decision making. This approach has been used for things as diverse as finding lost submarines, predicting elections (more accurately than traditional polling methods), and determining future terrorist targets.   

Imagine if you had a company of 10,000, 50,000 or 100,000 people and you could tap into the intelligence already available within your company to answer questions regarding which products should be developed, how should they be marketed or priced, which expansion opportunities should be taken advantage of, how the organization should be structured for optimal performance etc. Imagine if that information was easily available through survey research techniques…..Imagine.

Written by Jeffrey M. Saltzman

November 11, 2009 at 7:28 am

One Response

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  1. I have participated in this activity a few times. Yes, it is full of surprises.

    I think that one of the barriers for leaders tapping into the collective intelligence of a group is an absence of small- and large-group processes. Meetings—whether face to face or virtual—need to be structured so people can generate and winnow ideas seamlessly and effectively.

    Some great books that contain a variety of creative processes include:

    1. The Change Handbook by Peggy Holman, Tom Devane, and Steven Cady (2007).
    2. The Practical Decision Maker by Thomas Harvey, William Bearley, and Sharon Corkrum (2001).
    3. The Handbook of Large Group Methods by Barbara Bunker and Billie Alban (2006).

    Thought intriguing post.
    Cheers!
    Perry
    http://wisefoundations.wordpress.com/2009/11/05/leadership-the-strategic-use-of-anonymity-in-decision-making/

    perrywiseman

    November 11, 2009 at 7:50 pm


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