By T. Alexander Puutio 3 minute Read
Most of us have led perfectly happy lives thinking that decisions benefit from collaborative input. In fact, if they ever made a movie about Tough Decisions Club, I’m quite certain that its first rule would be: Talk about Tough Decisions Club.
There’s good reason to instinctively seek support from others when faced with difficult choices in life. Anyone who has ever been on the TV show “Who Wants to Be a Millionaire” knows that there is real power in the wisdom of the crowds, just like all of us who methodically scour through user reviews before pulling the trigger on Amazon.
What most of us tend to forget is that this power comes with limitations and sometimes we make better decisions by going it alone.
Mark Twain may have quipped that “It ain’t what you don’t know that gets you into trouble—it’s what you know for sure that just ain’t so,” but it was Hans Rosling who showed that some misconceptions run so deep that even our peers can’t help us.
Rosling’s exploration of systemic misconceptions via Gapminder shows that even large groups of experts often fail to perceive the world for what it is based on current facts and instead hold on to antiquated narratives that no longer match the facts. In practical terms, Rosling found out that when asked straightforward questions about the state of the world today—such as how many people live in extreme poverty— humans typically perform worse than chimps guessing at random.
The lesson here is simple: We should consult the data instead of our neighbors when it comes to views and opinions that can be proven (or disproved for that matter) by facts. We are better off sticking to the facts, particularly when making decisions under social influence.
Recent research has shown how subtle cues about the consensus around a given topic can elevate initial inaccuracies into false gospel and drive the entire herd off the cliff.
This translates into a phenomenon most of us have witnessed firsthand. In typical professional group settings, the first opinion to be voiced (or the one backed by the highest salary) tends to have a disproportionate impact on the rest of the proceedings.
Social conformity and the desire to avoid conflict are also familiar to most. Together, this dynamic duo can steer even the most capable brainstorming group into dire intellectual straits in a matter of minutes, which is why experts such as Adam Grant advocate for brainwriting instead—a process where ideas are first generated individually and only then evaluated jointly.
And if you are in the business of disrupting the status quo you might be best off eschewing the crowds entirely.
While Schumpeter’s theory of creative destruction is taught to most business and economics graduates today, reimagining processes and reinventing product lines remains devilishly difficult to apply in practice, particularly in large organizations.
One reason for this is that new and innovative ways of doing things start off as unpopular by definition. Big organizations are also fertile grounds for risk aversion and inertia, both of which slow down the adoption of new ways of doing things regardless of whether there are significant benefits.
That is why most of the breakthrough leaders we know today found success by boldly going against the wisdom of the crowds. Or could you imagine Elon Musk or Jeff Bezos becoming the wealthiest men in history if they had asked Ford or Barnes & Noble for their views on their business plans?
None of the above is meant as a wholesale indictment against collaborative inputs and cooperation in decision making. In all fairness, a similar article could be written on the pitfalls of hero narratives, the Dunning-Kruger effect, and our susceptibility to biases and cognitive blindspots when going it alone.
Instead of rejecting collaborative decision-making, we would do best by treating it as a precision tool that should be used in a context where it outperforms others. Even Musk recently espoused the wisdom of the crowds in his now (in)famous Twitter poll on whether to sell Tesla stock or not, and Bezos is a known proponent of a democratic approach to decision-making at Amazon.
For the rest of us, we’ll just need to stay cognizant of the fact that the wisdom of the crowds truly can just as well lead us astray if we depend on it in the wrong context.
Alexander Puutio is an adjunct professor at NYU Stern where he explores the interplay between business leadership and our society at large.