'All order - no chaos' is a Utopian dream
Sometime in early 1990s, at the very beginning of my employment in business, I came across ISO9001:1987 standards. That was the first time ISO9001 was published. The first revision took place in 1994. The overall mood in the industry I was employed by and the teams working on ISO9000 systems was almost as if, finally, a toolkit had arrived that would "set everything in order". We often debated and would even joke about the terms "where appropriate" and "as applicable" in our documentation, but we did not then realize the importance those terms innately carried. A possible realm of freedom that always needs to be provided to users in any system subtly along with the clearly visible set of constraints and conditions.
In late 1990s, I came across the balanced scorecard and six-sigma. I always found Six-Sigma a tightened and consolidated version of the original methodologies in quality management already documented by JM Juran and EW Deming which I had studied earlier. Yet - the term Six-Sigma brought new air of freshness, as it became popular as soon as it was embraced by Motorola and subsequently General Electric. Then I came across lean manufacturing, operational excellence, MRP, ERP, digital transformation, Industry 4.0, and the list went on. Has not stopped yet and will not ever. Such terms come and go, some stay, some stay longer than others, a few - though a very few - stay perpetually. All represent some kind of a structured system or methodology.
I recall an occasion in which the concerned chief of the large organization, I was working for, explained with all sincerity and seriousness, how the organization had been facing a tough economic situation and how, in spite of the frugality and austerity measures observed in the recent past, the financial results were far from being desirable. At this juncture, a competent, committed and a forthright employee politely asked, "For the last three years, we have embraced ISO9000 systems and the balanced scorecard approach thoroughly. How do we now evaluate the effectiveness of these tools in light of the concerns we now have?". The response from the chief was not surprising. He said in response, "Well - if we had not embraced these concepts, we would have been in a worse situation." The discussion ended but the question on the effectiveness of such methods remained alive. As Jonathan Haidt says in his book The Righteous Mind, "Intuition comes first, strategic reasoning second." If one wants to explain the intuitive stance to justify it or even deprecate it, it is not difficult to verbalize it to suit. Through the employee's question, it once again became amply clear to all that such methodologies can never be silver bullets.
The feeling that there is something standing between the structured systems and the ultimate success that, if not handled well, yields a failure, sometimes even a disaster, has grown stronger by every passing year in my mind. Almost like the shapeless mortar binding the bricks in a good robust construction, without which the entire structure is likely to simply collapse, sometimes irreversibly. Furthermore, a seemingly good structure too, without a good mortar deteriorates over a period of time.
The craving for structured approach is natural. That's how we try to create order out of chaos. Yet it can be seldom accomplished in totality. The mortar is a must. That's what collective wisdom is. The role and utility of collective wisdom is to continually discover the secret order from within the chaos on hand.
In all chaos there is a cosmos, in all disorder a secret order.
- Carl Jung
Absence of collective wisdom is not uncommon
On the other hand, when there is not even an implied or latent method to utilize collective wisdom and there is only a loose sense of administration, though with the routine components of any management situation such as organization structure, defined roles and reporting relationships, some decisions can lead to problematic outcomes - sometimes even disasters.
I myself have experienced many and I would not be surprised if most of the experienced managers find this eventuality quite relatable.
For example, strict adherence to rules can sometimes be detrimental to the ultimate mission, as can be laissez faire. In one case, in the quest of achieving the process parameters i.e., the pressure, the temperature setting, the humidity, the speed etc. exactly as specified by the collaborators, tonnes of steel and plastic was wasted in a case of technology transfer. The specialist who, finally, came to solve the problem, within a few hours concluded that the materials, though within the technical specification, were intrinsically slightly different from the ones being used in the process in our collaborators' country. Once the problem was solved, this looked like a matter of common sense, yet prescribing a future course of action with comprehensive or collective wisdom was easier said than done before knowing the root cause. The wisdom of a more experienced person was the key in the end.
In another case of a monumental failure, the senior executive team was fixated on a quick "turnaround" of the business while the so-called transformational team was working with holistic long-term plans. The hierarchical layers, in spite of being just one over the other, were in a complete disharmony. Power and prestige ruled over rationality and freedom of expression. The senior executive team was soon dissolved and replaced. Again, in retrospect, this may sound obvious, yet, while going through the process, few noticed the dissonance.
Examples or cases apart, which are galore, documented in risk management and many other areas of business, and known to all managers with some experience, the cases of non-application of collective wisdom due to perceived urgency (often leading to delays!) or perceived cost pressures (leading to avoidable cost overflows) are not new. So, a pertinent question then would be, is there such a thing as "collective absurdity" or "collective folly"? Indeed, there is. That too of two possible types.
1) Groupthink - which is not collective wisdom at all. On the contrary, collective thinking by a group that reduces the effectiveness of the group and leads to mediocre decisions. For example, saying yes to the boss out of fear, irrespective of how it is delivered in a discussion, can be detrimental to the use of collective wisdom.
2) Misalignment or group-dysfunction. Sheer lack of application of any collective thinking where there needs to be some.
To avoid these two possibilities in practice and, instead, work with collective wisdom successfully as practically applied, collective wisdom can be looked at, at two distinct levels.
1) Conceptual clarity; and 2) Application.
Collective Wisdom as a concept
By definition wisdom means the quality of having knowledge, experience, and good judgment. The judgment is good if the outcome i.e., the decision taken by virtue of these qualities proves to be effective or "desirable" (though not necessarily pre-empted). Collective wisdom is this quality collectively of a group of people. It is analogous to a wire rope with a strong core. All the strands would be analogous to teams, the wires to individuals in the teams and the strong core to leadership that holds all the strands together. All this with a helical structure for added strength, i.e., the ethos that binds all the individuals into teams and the teams along with their leadership into the umbrella organization.
Quite clearly, as has been demonstrated over thousands of years, mere democratic system of assumed but unproven equality of all for their decision-making capability leading to the principle "one vote per person" does not necessarily lead to effective decision-making. Furthermore, when oversimplified to this extent, such erroneously assumed equality leads to mediocre decisions due to groupthink.
So, what are the further deeper requirements of true collective wisdom?
It is obvious that if one were to consider an analogy, a truly effective use of collective wisdom would yield a decision that is a "weighted average" of all the constructively contributing components of decision-making by a group of people, as against mere simplistic "average" of all such components just driven by the head count with assumed equality.
If we accept this in principle, then what would those components be?
The literature on collective wisdom highlights a plethora of them. But it would suffice to say that, ultimately, they would primarily include:
1) Skills and expertise - contextual
2) Skills and expertise - subject matter in general
3) Behaviour conducive to collective decision making (e.g., assertion with brevity - not aggression)
4) Lack of contextual and subject matter skills and expertise, but ability to contribute through creativity or novelty
5) Leadership with critical thinking capability to develop a holistic view clearly distinguishing the implied weights of the contributions
Collective Wisdom applied
That brings one to the crucial ultimate stage of application. (On a side note, the way to employ collective wisdom in practice, is how I coined the term CollwisMax - Collective Wisdom Maximisation which has been used in the title of this newsletter.)
The comprehensive approach to applying collective wisdom in everyday management would entail the following principles:
1) Collective wisdom would connect the theory and any practice leading to effective outcomes.
2) Wisdom, as mentioned above, is the end-result of knowledge, experience, and judgment together.
3) Human behaviour is the manifestation of the wisdom they possess. Hence behaviours are what connects the theory to practice.
4) The approach to using collective wisdom effectively would be comprehensive and holistic - not dependent of any single tool or technique.
Once the ethos for collective wisdom is so accepted, the results follow. As is aptly quoted by James Surowiecki:
There is no point in making small groups part of a leadership structure if you do not give the group a method of aggregating the opinions of its members. If small groups are included in the decision-making process, then they should be allowed to make decisions. If an organization sets up teams and then uses them for purely advisory purposes, it loses the true advantage that a team has: namely, collective wisdom.
- James Surowiecki
While the current popular topic across the world appears to be that of the products of artificial intelligence, for their effective development and utilization, it would not be a surprise that one will always need for it to succeed some effective packaging of collective wisdom.
- Nilesh Pandit
May 18, 2023