collectiveintelThis is part three in a series of posts about collective intelligence.  As I wrote before, building lucrative collective intelligence requires tweaking the mixture of talent to achieve the artful goals of success and profitability.  According to conceptual theories developed by the Sloan School of Management at MIT, wisely deploying collective intelligence involves answering four base questions: what is being done; who is doing it; why are people doing it; and, how are people doing it.

Who is providing the information and skills that elevate your business and product performance?  Traditionally, it comes from within the business where you have self-selected the group of professionals with expertise and skills to make cost-effective decisions.  Working within that group, you are assured of local control of knowledge.  At the same time, the knowledge is only local.  Its creative generating powers are as great as the amount of people, which in a start-up can be awfully small limits.  You can expand your knowledge and still retain some control while mining talent from social and professional networks of your employees.  Or, you can throw the doors wide open and accumulate skills and expertise from anyone who wants to contribute, a sort of Wikipedia contributors scheme to increase your business’s talent pool.  The question is who – employee, associate, unknown – do you want doing it – adding capital to your enterprise?

Collective intelligence decrees that the sum is greater than the parts.  Consequentially, the more parts you have, the greater sum, or talent, you will have.  Harnessing the skills of massive groups has worked tremendously well for Wikipedia.  Collective intelligence has worked tremendously poor as well.  PK-35, a Finnish soccer team, opened up its team management process to the collective intelligence of its fan base, supposedly, to choose who to contract and how to manage the player rotation.  The experiment lasted one dreadful season and ended the coach’s tenure.

What Wikipedia learned in its development stage, while it had minimal followers, and PK-35 learned in its dismal year is when to leverage the crowd intelligence and when to leverage the hierarchy intelligence.

PK-35 dramatically overestimated the positive contributions of crowd intelligence.  By outsourcing management decisions to the fans, PK-35 definitely generated more loyalty among the fans and a greater publicity buzz.  However, they had no way of vetting if social media votes for team direction were made by actual fans who had a stake in creating a winning team.  The votes could just as easily been made by someone who supported a rival team.  Likewise, PK-35 had no filter for expertise or higher level commitment to the success of the team.  Contrastingly, another soccer team used the same sort of scheme, but the only people who were allowed to participate were season ticket holders.  This produced positive results.

Wikipedia has two methods for deploying collective intelligence: the collective itself and a hierarchy of editors.   Anyone can submit an entry.  Users of Wikipedia can factually edit the entry.  Beyond that, there is a level of curators who determines the inclusion of entries.

In the previous post, I discussed being clear about which stage you are in, idea generation or idea evaluation.  Generation works well among the crowd, the external collective, while evaluation works well with established and trusted actors, the leadership.  Optimizing the crowd gene is most useful in situations where the resources and skills needed to perform an activity are widely distributed or unknown to you.  Also, the crowd gene works best when an activity can be divided into different parts.  The crowd gene also promotes efficiency since it explores vastly more potential than a hierarchy can.  After all, a diverse independent and reasonably informed crowd can outperform even the best individual estimate or decision.

What are you doing, generating or evaluating?  Who is doing it, the crowd or a hierarchy?  Balancing collective intelligence with institutional intelligence gives the speed to change and the wisdom to know which direction.