Why Collective Intelligence is the Future of Knowledge Generation for Businesses

If I placed an ox in front of you and asked you to assess its weight, how close would your guess be? While we don’t doubt your intellect and competence; statistically, you probably wouldn’t hit the jackpot. But if you place your guess as part of a crowd, now that’s another story.

Positioning an ox in front of a group of people may seem a little out of place in the 21st century, but in 1907, this is exactly what individuals at a country fair were asked to do by Sir Francis Galton in rural England [1]. Galton asked a group of farmers, butchers, and the general public to guess the weight of an ox, and he discovered that the averaged guess was extremely close to the actual weight. In fact, the averaged answer was more accurate than the guess made by any butcher. This local country fair scenario may seem far from today’s globalized, digital market-place; but it represents one of the first recorded examples of collective intelligence; a phenomenon business leaders today cannot afford to ignore.

Collective intelligence is not just about guessing values as a group. Collective intelligence represents any sort of intelligence or output that arises out of the collaboration and cooperation of a crowd; from predictions of future events, to crowds delivering solutions for creative businesses, or creating innovative products or services that shake up an industry.  But if collective intelligence has been around for a century, why has it only gained momentum in the past decade? Well, modern technology accelerates and facilitates connections, and thereby fosters collective intelligence. The Internet in particular gave rise to many new forms of collective intelligence. Wikipedia is a prime example of modern collective intelligence: Here, self-selected members of a crowd collaboratively contribute to the Internet-based encyclopedia by producing and editing content, controlled by other members of the online community (the crowd).

Crowds have been shown to be able to predict future events (as seen in various prediction market examples), to be highly accurate (as highlighted by the famous ox example) and to generate superior ideas for innovation processes. Crowdsourcing, for example, is a method that facilitates collective intelligence by allowing organizations to tap into a large pool of ideators and problem-solvers through the Internet, providing organizations with the opportunity to receive highly novel ideas and improve their innovation capabilities.

Collective Intelligence represents not only the future of knowledge generation and creation, but indeed provides a range of strategic tools for business leaders to overcome 21st century challenges. Such crowdsourcing methods for harnessing the collective intelligence can help businesses dealing with the fourth industrial revolution – which will require efficiency, cost reduction, creativity and innovation, as well as the ability to predict new market trends and operational changes better than the competitors. It is therefore not a surprise that collective intelligence methods are used by global organizations such as LEGO, Carlsberg and NASA. Surowiecki used the phrase “Wisdom of the Crowds” back in 2004 [2] – today it is inevitable for businesses to listen to and engage with their crowds. After all, as a decision-maker, wouldn’t you want access to more accurate predictions and faster innovation processes?

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[1] Galton, F. Vox Populi. Nature75, 1949, (1907), 450-451.

[2] Surowiecki, J. (2004). The wisdom of crowds: Why the many are smarter than the few and how collective wisdom shapes business, economies, societies, and nations. New York: Doubleday & Co.

 

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