On the ‘wisdom of crowds,’ ‘surveys’ and management.

Oil IT Journal editor Neil McNaughton reflects on the ‘wisdom of crowds,’ on Web x.0, collaboration technology and self serving ‘surveys.’ What happened to managers managing?

Once again, the pundits have been wrong footed by events. Not long ago the buzz was that oil and gas was a shambles regarding new technology and needed to sharpen up its image to survive. Worse, it was populated by a bunch of bumbling old baby boomers who were both technophobic and at the same time, possessors of corporate knowledge that was about to be lost as they all cashed in their 401ks. Then the oil price went up and suddenly, it wasn’t new technology we were short of, it was people! How were the young enthusiasts going to be encouraged to join a ‘technophobic’ industry? A quick change of the game plan was needed—enter the ‘digital engineer, oilfield’ etc. And bring back the baby boomer retirees quick. Now that the oil price is down, the message seems to be, we don’t need all those people any more! So let’s fire some! We didn’t really need all those ‘trained’ folks anyway because we have the wisdom of crowds.

I confess that I have not actually read James Surowiecki’s book of that name*. But from Wikipedia*, plethoric blog postings and references in various talks I gather that a relative of Charles Darwin, Francis Galton, noted that at a country fair, the crowd collectively guessed the weight of a pig with more accuracy that individual experts. Galton’s somewhat provocative** conjecture has not been backed up by subsequent scientific investigation. Attempts to derive the 657th digit of pi by surveying very large crowds have failed as has the notion that revisions to the standard kilogram mass should be based on a poll of passers by.

I heard on the radio this month somebody bemoaning the fact that none of the silk suited CEOs of British banks who were apologizing for having run the country down the tubes actually had any banking qualifications. Someone commented that businesses today are more often than not run by MBAs rather than by internal promotion of people who understand the business. It struck me that this is a kind of ‘wisdom of (MBA) crowds,’ the idea that we don’t actually need to know how a business works, just apply the collective wisdom of the pundits.

A related phenomenon is the current enthusiasm for ‘collaboration.’ This is a motherhood and apple pie sort of notion. I mean you can hardly be against it. But ‘collaboration’ of wise crowds can end up being a way of trashing the hierarchical model of doing business—with more experienced managers telling younger hires what they should be doing.

The IT community, ever a proponent of ‘fear uncertainty and doubt’ (FUD) is hard at work pushing the opposing notion that it is the young hires who should be educating the old farts about collaboration technologies.

At the risk of old fartism, I submit that the current enthusiasm for Web 2.0, Web 3.0 and Web x.0 has much more to do with FUD than technology breakthrough. The thesis, for which belief has to be suspended, is that young hires need Twitter to work, that old farts haven’t ‘got it’ and that the ‘cool stuff’ is key. Web x.0, even though it is really about having fun, has been repackaged as ‘collaboration.’

I despair! Observe the twitterers, bloggers and vanity publishers. They chat to each other about the color of their neighbor’s clothes or who Britney Spears is dating. In an enterprise context, people at conferences and in meetings are futzing away on the Blackberries and other ‘smart’ devices. Is the corporation getting full value from all this intellectual Brownian motion? I don’t think so. Web x.0 technologies are not an unequivocally good thing.

The ‘wisdom of crowds’ notion also underpins much of the self fulfilling ‘surveys’ that vendors push in our direction to prove something or other. Why waste time seeking out expert advice when there is a crowd out there to ‘survey.’ Why bother testing the statistical significance of the results or controlled the results with a third party audits? All you need is a ‘crowd’ and a set of leading questions. For instance, ‘Do you use product X?’ answer, ‘No.’ Well do you think that product X would help you do your job? Answer ‘maybe.’ This then generates a statistic that X% of those interviewed believe that product X could help them with their job. It’s interesting too that when confronted with a problem, the consultants survey the very people who are asking the question in the first place! When a new technology hits the market everyone is wondering what its impact will be. Well, just survey the wonderers, find out what the ‘crowd’ thinks and bingo, you have your wisdom.

It seems to me that many of the ‘surveys’ that back up studies in the Harvard Business Review beg similar questions on the integrity of the samples and the method. Management surveys just seem so sloppy, even when they are not overtly self serving!

But lets step back a bit. What is management really about? It is at least in part about people who know telling people who don’t know what to do. In some fields the knowledge of the knowers virtually defines the company. In an exploration start-up, this might be the geologist with an intimate knowledge of a play, or a new idea that turns out to be right. In an unconventional gas play, it might be the drillers or engineers who know just how to frac that horizontal well and get the gas flowing. In a big company, with fingers in many pies, this means having a bunch of experts knowing lots of stuff and structured education programs for the new hires. It might even involve use of some of the web x.0 stuff, but this has to prove its worth. Slow take up of new technology may just reflect a healthy distrust of snake oil.

Keeping experts on through the down turn likewise is a statement that the wisdom of crowds is fine for the competition, ‘We’ll just stay with the facts and the domain knowledge thank you very much.’

I have to conclude with this snippet from a blog posting that I stumbled across while writing this editorial. After expounding on Surowiecki’s theories on the wisdom of crowds, the blogger who shall remain anonymous, concluded, ‘This is an illustration of the fact that a collective judgment may be better than the judgment of an individual expert, something which appears to be true in financial markets, for example.’ I couldn’t have put it better myself!

* www.oilit.com/links/0902_2

** www.oilit.com/links/0902_3

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