Two simple ways to make better decisions

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Community gatherings and carnivals have long entertained attendees with guessing games, in which a glass jar containing some vast quantity of small objects is kept on display, with a prize going to the person whose entry is closest to the actual number. Counting the items directly is impossible, so these attractions might feel like a casual exercise in estimation. They can seem random but intriguingly they tend not to be.

A variation on this theme is a contest to guess the weight of something, perhaps an agricultural product or livestock.1 This approach was the one taken by the early 1900s British country fair attended by statistician Francis Galton, which featured an ox as the subject.2

As you might expect, those who entered the competition submitted guesses that covered a wide range.3 Some with poor bovine sense were absurdly high or low, which would have amused the farmers in the crowd who surely knew better from their years handling livestock.

The guesses by themselves weren’t remarkable, but when Galton averaged them together an astonishing finding emerged. The resulting figure was 1,197 pounds, just one away from the actual total. Although the ox’s weight was difficult for any one person to gauge, a crowd of attendees with varying expertise was able to determine it essentially perfectly.

Extrapolating from this observation, Galton was one of the first to popularize the notion of the wisdom of crowds.4 His finding has since been replicated numerous times, often with startling precision. In cases of ambiguity or when a problem is hard for an individual to grasp, it turns out that collective judgment may help resolve it.

The case of the fairgoers had one important distinction, in that each entry was written secretly and submitted without the knowledge of others in the crowd, preventing anyone from being swayed by his neighbor’s judgment. This would seem to be a damper on accuracy—why not learn from others and calibrate accordingly?

Imagine if the resident butcher or oldest farmer in the village had publicly stated his guess early on. This would sway subsequent estimates through social contagion, given natural deference to authority and expertise. The resulting average might be more accurate than the baker’s or blacksmith’s guess but would not have achieved the pinpoint precision of the group’s average.

This setup kept one person’s skewed idea from subconsciously swaying the others, allowing independent perspectives to thrive and creating the space for collective wisdom to emerge.

What could go wrong

Alfred Sloan was responsible for pioneering numerous management innovations, notably the organization of General Motors into one of the world’s leading industrial companies.5 Along the way he became known for his relentless focus on rationally assessing a situation.

One guiding principle he articulated during a meeting with fellow executives was a counterintuitive requirement for opposing points of view. If no one could state the downsides of a decision, that strongly implied it was not fully understood, and so making it would be premature. Little in a business as complex as automobile manufacturing could be unambiguously positive. A lack of disagreement meant that problems were not being confronted, not that they didn’t exist.

In this way Sloan embedded dissent as a core principle of his leadership style. He recognized that heads of his various divisions and functions would always have experiences and access to information that others did not, and these would necessarily lead to different conclusions. If a few voices predominated, the ability to capture this fuller perspective would be cut off.

Consulting firm McKinsey & Company was a pioneer in encoding this concept into its core values, formalizing an “obligation to dissent” in how its consultants are to behave regardless of tenure. This helped distinguish it as an objective arbiter of advice, where rank was not a filter for validity and those on the frontlines of a project have as much responsibility for surfacing the truth as those more senior.6

The opposite approach is known by the pejorative term groupthink, and the tendency towards it can be overwhelming. The crowd is delicate and can easily be swamped by the pressure to conform. Leaders must deliberately encourage and reward disagreement. If it isn’t constantly cultivated, the insights of a diverse team will slowly but certainly evaporate.

Large groups can easily cohere along paths of action that are absurd or destructive—the wisdom and madness of crowds are not opposites, but merely the same phenomenon manifesting in slightly different conditions.

Choose wisely

As a leader set up structures to draw from the collective insight latent in your teams, and just as importantly ensure that the voices you hear include independent opinions. Consider three specific tactics to accomplish this:

• Hear from new voices: every day should not be a repeat of the prior one, surrounded by the same people, participating in the same meetings, hearing the same perspectives. Tapping the wisdom of the crowd requires, at a minimum, some mechanism for their voices to be heard. Gathering input from the many is far more time-consuming than just sticking with the judgment of the few, but when guessing the metaphorical weight of the ox or count of jellybeans in a jar the group is often closer to the truth than every single individual.
• Require opposing viewpoints: make important decisions only when the downsides have been given a non-trivial hearing. One principle of certain debate formats is that the pro or con position on a given topic can be assigned randomly, meaning that participants must be able to advocate with equal fervency for either side of a polarizing issue. These exercises are hypothetical, but the principle involved ensures deep understanding of an issue from all angles. Similarly, advocates for one course of action should be able to articulate the rationale for the alternative path.
• Acknowledge limitations: there are a few situations where a genius from on high sees more than everyone else and can successfully dictate decisions to the rest of the group, but you’re probably not in one of them.7 Openness to broader perspectives first requires the humility to accept that an individual or a small leadership team does not have complete answers. In certain cases, expert opinions can even be less accurate than an average of amateurs. Listening well to other perspectives requires a more clear-eyed view of one’s own.

How do you ensure your leadership surfaces and harnesses the full breadth of wisdom, and that dissenting perspectives are incorporated?

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References

James Surowiecki wrote the 2004 book The Wisdom of Crowds, which popularized the concept, including the Galton ox example, and further laid out the conditions needed to draw it out.

NPR recreated the experiment in 2015 via the internet, with a cow in place of the ox. Those who considered themselves experts did slightly worse.

The Financial Times takes an imagined look at the aftermath of Galton’s visit to the fair.

Harvard Business School’s Working Knowledge explores the role of dissent in decision-making, and Harvard Business Review has an article on McKinsey’s obligation to dissent.