When considering team performance, both micro and macro perspectives are necessary. The micro perspective is a viewpoint of individual relationships and is about building mutual understanding and trust with each person. On the other hand, a macro perspective is a viewpoint of the team as a whole, and is about optimizing the overall structure and information flow of the team as a system.
The former micro perspective begins with a deep understanding of people, and I think that the main effort is to maximize the overlap between each person’s motivation and what the company wants to do as a business. It is easier said, but just understanding people’s strengths is extremely difficult and requires a high level of communication skills.
On the other hand, there are various theories on the latter macro perspective. In particular, I like Theory of Constraints very much. In my daily activities, I am constantly thinking about how to find and predict bottlenecks and how to increase throughput by resolving conflicts in them.
I have been interested in and learning a lot about collective intelligence lately, and I recently studied a book Wisdom of Crowds.
It is a very famous book published in 2005, and in a nutshell, it says that the wisdom of the crowd is better than the genius of one person. It may seem like an obvious statement. However, the book does not absolutely accept that the crowd will always be the wisdom, but defines the conditions for it. The interesting point is that the conditions are very difficult to satisfy. As I sort out the difficulties, I see how difficult it is for each person to hold independent opinions and to make use of them, and how it is not easy.
When conducting business in a company, it is very important to create team wisdom, not just a collection of individual people. And creating that team wisdom is an important job for leaders and managers. In other words, I believe that it is up to the leader or manager to behave in a way that creates wisdom as a team.
In this post, I will consider the conditions under which a crowd becomes wisdom, while also considering how to create wisdom in a team, considering many anti-patterns.
What’s “Wisdom of Crowds”
To share a concrete image of the wisdom of crowds, I will give just one example.
The example given at the beginning of this article is an old quiz show. In this quiz show, the contestants had to answer four increasingly difficult questions, and if they answered all of them correctly, they would win a prize. In answering the questions, the respondent could use three types of help, once for each of the three choices: first, to make the four choices into two choices; second, to ask a friend for help; and third, to have everyone in the audience vote to see how many votes there were for each answer. As it turns out, the third type of help was the most effective, with 91% of the actual correct answers matching the option that received the highest number of votes, a higher percentage of correct answers than the other two types of help.
The above example is a very simple example of crowd wisdom. And the following five conditions are given for a crowd to become wisdom.
As in the quiz show mentioned earlier, it may be relatively easy to satisfy the above five conditions if there are no conflicts of interest within the group, there is no necessity for each person’s opinions to depend on each other, and it is possible to construct a simple mechanism to aggregate opinions.
However, in actual business activities, there are interests and different thoughts of each person. And the relationship between things and people is very complex, as some decisions have some impact on one’s own future. Therefore, I think that in order to establish these five, it is necessary to understand the relationships and their side effects, while carefully considering the order of implementation.
In a nutshell, the diagram below shows the five conditions, which I feel need to be built up in order, starting with Diversity, which is the most important foundation. In the following, I will include the dependencies among them.
Build Trust while maintaining Diversity
True trust is built on a foundation of affirmation of differences of opinion and mutual understanding of those differences. And if we respect that we think differently, there is no need to seek unnecessary consensus or excessive compromise. This is very difficult, however, and requires not just an emotional aspect, trusting the other person, but also the skill of being able to see things from multiple perspectives, both of which are different from one’s own ideas.
If too much importance is placed on trust in an environment where people are not used to seeing things from multiple perspectives, it is common to simply bring together people of the same opinion. When people of the same opinion are gathered together, there is no room for dissenting opinions, and it is easy to create an environment that is comfortable in a bad way and not even subject to good criticism. In a word, it’s conformity.
Once conformity is established, it is very difficult to break it and try to improve Diversity. Often, from the point of view of those in conformity, those who have different opinions, good or bad, are seen as mere enemies. It is very difficult to break the conformity and increase Diversity from that state, and it takes a lot of strength and energy.
The means to avoid such a difficult situation is to enhance Diversity in the first place. You should enhance Diversity before it develops conformity. By the way, Diversity here is Diversity with respect to the recognition of things. Of course, social diversity in terms of gender, race, nationality, language, etc., is related to diversity in terms of recognition of things. However, what is essentially important in the wisdom of crowds is the existence of different ways of seeing things, different opinions, and different values.
When Diversity is increased to a certain degree, Conformity is less likely to increase spontaneously. Under such a situation, you must build Trust while maintaining Diversity and being conscious of the fact that conformity does not increase. It is easy to write “Diversity is important! Diversity is important!” but I don’t understand it (at least I don’t). The important point I think is that people in leadership positions should enjoy differences in values and opinions. I think that by enjoying the differences themselves, you can naturally respect those differences and increase Trust while maintaining Diversity.
Implement Decentralization and Aggregation based on Trust
The next phase is the mechanism. As in the quiz example at the beginning of this section, there is no need to worry if the matter is something that can be easily aggregated through a voting system, but decision making in corporate activities is complex. There are so many variables in deciding something that there is no single correct answer. In such an uncertain situation, it is unlikely that anything can be decided mechanically, and someone has to make the final decision.
However, as this book also states, it is almost impossible for one person at the top to make the best decisions for everything in an increasingly complex business. The solution is to create hierarchies and delegate authority, but even so, it is not realistic to expect the head of each department or team to always make the best decisions in all areas that he or she must manage. Very often, there is a “best judge” who is not the head of the company, department, or team for each of the large number of decisions that need to be made every day.
Determining who can make the most appropriate decisions is precisely the appropriate delegation of authority itself. However, simply handing over authority is not enough; it is necessary to create a mechanism for information to flow to that person so that appropriate decisions can be made. I believe this is exactly what Aggregation is.
And as one tries to create an Aggregation structure so that information is gathered to those who can make the most appropriate decisions, the organization will become more and more networked. This is because when the optimal flow of information is dynamically determined according to the subject matter to be judged, it will not stop at a simple hierarchical structure, but will naturally become a structure that is connected to each other in multiple ways. A networked organization is not a hierarchical or centralized organization, but a system in which the flow of information and decision makers are determined according to the subject matter, which I believe is a state of good decentralization.
However, trust is a prerequisite for this networked organizational structure: decisions are made not by a single head, but by the appropriate person for the subject matter, and the acceptance of those decisions by the team is highly dependent on the existence of trust. If there is no trust, information can be easily hidden and it becomes difficult to create a structure that gets information to the most appropriate people. It is also easy to fall into a situation of bad decentralization, no one taking responsibility, and no one making decisions.
In summary, the Trust phase is to create a mechanism. The mechanisms are Aggregation and Decentralization. Once the structure is in place, you can say that you have finally created an environment in which the wisdom of the team can be demonstrated.
Keep Independence after the environment
After the environment is in place, the last step is to create a state in which Independence is maintained.
Independence is a state in which each person has independent opinions, and these opinions are asserted as needed without the need to inadvertently change them due to peer pressure. In the first place, having an independent opinion depends on Diversity. And whether that opinion is asserted depends greatly on Trust. If trust is low, there is a high possibility that people will be hesitant to express different opinions.
And Decentralization and Aggregation are very important to properly handle the opinions asserted. Even if there are people who have independent opinions, if there is no system in place to properly collect those opinions and ensure that they are conveyed to the appropriate people and utilized, it will be difficult to make the most of the diversity of opinions. If people feel that their opinions are not being conveyed to the right people or are not being properly utilized, they will gradually give up voicing their opinions. For example, a person who joins a team as a mid-career hire may start out with very unique ideas, but before you know it, he or she has stopped sharing those unique ideas. I think this is very common. In order to maintain the existence of different opinions with various values, we need a mechanism to aggregate them and a structure to ensure that they reach the right people.
As with Diversity, it is very difficult to recover Independence once it has been lowered. Therefore, when we listen to opinions, we have to be prepared to take responsibility for understanding the various opinions, and then implementing and producing results after making use of them in our decisions, regardless of their depth. If you simply ask for opinions without being prepared to do so, not only will you not produce anything, but you will also leave the impression that you have no choice but to speak up, which may have a negative effect.
In other words, even if Diversity, Trust, Aggregation, Decentralization, and these elements are in place, it seems to me that in order to maintain Independence, the attitude of leaders and managers toward their teams must always be challenged.
Although it has been expressed very negatively, I believe that maintaining Independence is very sensitive and can be maintained only after both the relational values and the mechanism are in place. Therefore, it is required to understand the premises and the factors that can break Independence. However, while very difficult, if you can overcome the difficulties and keep Independence, your team will be stronger in various difficult situations and fast changes. And you will be able to make the most of the different values, ideas, and opinions of each person on the team, and become a highly flexible team.
At the end
I have discussed the conditions for wisdom of crowds. If you try to solve the conditions of the upper layers without creating a foundation, not only will you not be able to solve them, but side effects may occur, making it even more difficult to solve them. Therefore, I think it is very important to carefully do one thing at a time, starting from the bottom.
It is very important for leaders and managers to elevate the wisdom of each person on the team to the wisdom of the team as a whole. There are many things to do in management, but very few things that really need to be done at any given moment. Based on the situation of the moment and future projections, only what is truly necessary should be done at the right time.
When I read the Wisdom of Crowds book, I thought it was a very neat framework for organizing the order of what needs to be done and the actions that are really needed by reading the five conditions and considering the dependencies.
Last but not least, as always, I am not at all sure that I am able to implement 100% of what I write about by myself. There are many things that I am not able to do and can only do occasionally. However, now that I have outputted it in this way, I will update myself with more awareness.