Beyond Business Ethics
In most athletic events, the referee blows a whistle to call attention to a form of misconduct or to call a time-out. In the world of business, academia or government, “whistle blowing” is synonymous to selling out, becoming a rat or using passive aggressive behavior to get even for being wronged or mistreated. Often the very act of calling attention to misconduct places an individual at risk of retaliation, yet frequently, the individual’s intent was to merely call a time-out to discuss the issue at hand or to make corrections in behavior.
Often, corporate/academic culture and norms turn into Groupthink, a type of thought exhibited by group members who try to minimize conflict and reach consensus without critically testing, analyzing, and evaluating ideas. During Groupthink, members of the group avoid promoting viewpoints outside the comfort zone of consensus thinking. A variety of motives for this may exist, such as a desire to avoid being seen as foolish, or a desire to avoid embarrassing or angering other members of the group. Groupthink may cause groups to make hasty, irrational decisions; individual doubts are set aside for fear of upsetting the group’s balance.
James Surowiecki argues, in his book The Wisdom of Crowds, that by studying situations (such as rational bubbles, in which the crowd produces very bad judgment), one can see that the failures of crowd intelligence surface because of conformity. Surowiecki argues that in these types of situations, the group’s cognition or cooperation failed because (in one way or another) the members of the crowd were too conscious of the opinions of others and began to emulate each other and conform rather than to think differently. Although he gives experimental details of crowds collectively swayed by a persuasive speaker, he says that the main reason that groups of people intellectually conform is that the system for making decisions has a systematic flaw.
Surowiecki asserts that when the decision-making environment is set up to accept only the group’s way of thinking, the benefits of individual judgments and private information are lost. Making the group only as smart as its smartest member, rather than perform better (as he shows is otherwise possible).
Detailed case histories of such failures include the following descriptions:
Too homogenous. Surowiecki stresses the need for diversity within a group to ensure enough variance in approach, thought process, and private information.
Too centralized. Surowiecki stresses the importance of open feedback loops. He cites the Columbia shuttle disaster as an example and blames it on a hierarchical NASA management bureaucracy that was totally closed to the wisdom of low-level engineers.
Too divided. Surowiecki stresses the importance of shared information and resources. He asserts the US Intelligence community failed to prevent the September 11, 2001, attacks partly because information held by one subdivision was not accessible by another. Surowiecki's argument is that crowds (of intelligence analysts in this case) work best when they choose for themselves what to work on and what information they need. (He cites the SARS-virus isolation as an example in which the free flow of data enabled laboratories around the world to coordinate research without a central point of control.)
Surowiecki goes on to explain that the Office of the Director of National Intelligence and the CIA have created a Wikipedia-style information sharing network called Intellipedia; and believes this will help the free flow of information to prevent such failures again.
Too imitative. Surowiecki stresses the importance of critical thinking by individuals and groups. He argues, where choices are visible and made in sequence, an "information cascade" can form in which only the first few decision-makers gain anything by contemplating the choices available; once this has happened it is more efficient for everyone else to simply copy those around them.
Too emotional. Surowiecki stresses the importance of rational thinking by individuals and groups. He argues, where emotional factors, such as a feeling of belonging, can lead to peer pressure, herd instinct, and (in extreme cases) collective hysteria.
One does not have to look very far to see examples of famous whistle-blowing cases. Quite often, these cases involve a single person blowing the whistle on misconduct, where after the dust settles, was really just a voice to a large number of concerned people who didn’t speak up, until after it was too late. With scandals breaking each day, from corporate to government, the notion that wisdom can actually exist in crowds may seem more Pollyanna than reality. As Surowiecki explains, there is wisdom in crowds, but only under the right conditions. In order for a crowd to be smart, he says one needs to satisfy four conditions:
1. Diversity. Surowiecki asserts a group with many different points of view will make better decisions than one in which everyone knows the same information. Think multi-disciplinary teams building Web sites as an example. Where programmers, designers, business developers, QA folks, end-users, and copywriters all contribute to the process; each with a unique view of what the final product should be. Contrast that with, say, the President of the US and his Cabinet or committees in the US Congress.
2. Independence. Surowiecki asserts a group that values independence will make better decisions than ones where groupthink is dominate. Groups where people's opinions are not determined by those around them will be stronger and wiser. This principle is also known as avoiding the circular mill problem.
3. Decentralization. Surowiecki claims, when power does not fully reside in one central location, and many of the important decisions are made by individuals based on their own local and specific knowledge rather than by an omniscient or farseeing planner, then the intelligence of the crowd increases. Surowiecki went on to discuss the open source software development process as an example of effective decentralization in action.
4. Aggregation. Finally, Surowiecki asserts there must be some way of determining the group's answer from the individual responses of its members. The evils of design by committee are due in part to the lack of correct aggregation of information, not necessarily the lack of information. A better way to harness a group for the purpose of designing something would be for the group's opinion to be aggregated by an individual who is skilled at incorporating differing viewpoints into a single shared vision and for everyone in the group to be aware of that process. (Good managers do this.) Aggregation seems to be the trickiest of the four conditions to satisfy because there are so many different ways to aggregate opinion, not all of which are right for a given situation.
It seems to me, if groups of academic professionals could satisfy the four conditions identified by Surowiecki above some of the error involved in group decision-making could be eliminated. By creating an environment where the wisdom of groups can be empowered to include practitioners – both as educators and graduate students in the classroom – in the process of developing graduate level business curricula. Based on Surowiecki’s research one would expect to see significant improvement in real world content within curricula which would then translate to improved relevance within the practice of business by MBAs after graduation.
