Decisions 2.0: The Power of Collective Intelligence

Information markets, wikis and other applications that tap into the collective intelligence of groups have recently generated tremendous interest. But what”s the reality behind the hype?

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The human brain is a magnificent instrument that has evolved over thousands of years to enable us to prosper in an impressive range of conditions. But it is wired to avoid complexity (not embrace it) and to respond quickly to ensure survival (not explore numerous options). In other words, our evolved decision heuristics have certain limitations, which have been studied extensively and documented over the last few decades, particularly by researchers in the field of behavioral economics. Indeed, the ways in which our brains are biased may be well suited to the environment of our ancestors, when a fast decision was often better than no decision at all. But the hypercompetitive and fast-paced world of business today requires short response times and more accurate responses and more exploration of potential opportunities.

The good news is that, thanks to the Internet and other information technologies, we now have access to more data — sometimes much more data — about customers, employees and other stakeholders so that, in principle, we can gain a more accurate and intimate understanding of our environment. But that’s not enough; decisions still need to be made. We must explore the data so that we can discover opportunities, evaluate them and proceed accordingly. The problem is that our limitations as individual decision makers have left us ill equipped to solve many of today’s demanding business problems. What if, though, we relied more on others to find those solutions?

To be sure, companies have long used teams to solve problems, focus groups to explore customer needs, consumer surveys to understand the market and annual meetings to listen to shareholders. But the words “solve,” “explore,” “understand” and “listen” have now taken on a whole new meaning. Thanks to recent technologies, including many Web 2.0 applications,1 companies can now tap into “the collective” on a greater scale than ever before. Indeed, the increasing use of information markets, wikis, “crowdsourcing,” “the wisdom of crowds” concepts, social networks, collaborative software and other Web-based tools constitutes a paradigm shift in the way that companies make decisions.2 Call it the emerging era of “Decisions 2.0.&



1. A.P. McAfee, “Enterprise 2.0: The Dawn of Emergent Collaboration,” MIT Sloan Management Review 47, no. 3 (Spring 2006): 21-28; and S. Cook, “The Contribution Revolution: Letting Volunteers Build Your Business,” Harvard Business Review 86 (October 2008): 60-69.

2. J. Howe, “Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business” (New York: Crown Business, 2008); D. Bollier, “The Rise Of Collective Intelligence: Decentralized Co-Creation of Value as a New Paradigm of Commerce and Culture,” A Report of the Sixteenth Annual Aspen Institute Roundtable on Information Technology (Washington, D.C.: The Aspen Institute, 2007); C. Li and J. Bernoff, “Groundswell: Winning in a World Transformed by Social Technologies” (Boston: Harvard Business School Press, 2008); B. Libert and J. Spector, “We Are Smarter Than Me: How to Unleash the Power of Crowds in Your Business” (Upper Saddle River, New Jersey: Pearson Education, Wharton School Publishing, 2007); A. Shuen, “Web 2.0: A Strategy Guide: Business Thinking and Strategies Behind Successful Web 2.0 Implementations” (Sebastopol, California: O’Reilly Media, 2008); T.W. Malone, “The Future of Work: How the New Order of Business Will Shape Your Organization, Your Management Style and Your Life” (Boston: Harvard Business School Press, 2004); and E. von Hippel, “Democratizing Innovation” (Cambridge, Massachusetts: MIT Press, 2005).

3. A much more exhaustive coverage of the field, as well as a very good taxonomy of collective-intelligence applications, can be found at the MIT Center for Collective Intelligence (

4. D.G. Myers, “Intuition: Its Powers and Perils” (New Haven, Connecticut: Yale University Press, 2004).

5. K.R. Lakhani and J.A. Panetta, “The Principles of Distributed Innovation,” Innovations: Technology, Governance, Globalization 2, no. 3 (2007): 97-112.

6. Ibid.

7. J. Surowiecki, “The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations” (New York: Doubleday, 2004); and R. Dye, “The Promise of Prediction Markets: A Roundtable,” McKinsey Quarterly, no. 2 (2008): 83-93.

8. E. Bonabeau and C. Meyer, “Swarm Intelligence: A Whole New Way to Think About Business,” Harvard Business Review 79 (May 2001): 106-114.

9. S.E. Page, “The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies” (Princeton, New Jersey: Princeton University Press, 2007).

10. I. Wylie, “Who Runs This Team, Anyway?” Fast Company (March 2002).

11. D.W. Stephenson and E. Bonabeau, “Expecting the Unexpected: The Need for a Networked Terrorism and Disaster Response Strategy,” Homeland Security Affairs III (2007): 1-8; and C.H. Shirky, “Here Comes Everybody: The Power of Organizing Without Organizations” (New York: The Penguin Press, 2008).

12. D.E. O’Leary, “Wikis: ‘From Each According to His Knowledge,’” Computer (February 2008): 34-41.

13. D. Tapscott and A.D. Williams, “Wikinomics: How Mass Collaboration Changes Everything” (New York: Portfolio, 2008).

14. Surowiecki, “The Wisdom of Crowds.”

15. Howe, “Crowdsourcing”; and C.R. Sunstein, “Infotopia: How Many Minds Produce Knowledge” (New York: Oxford University Press, 2006).

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Comments (2)
Leslie Brokaw
Thank for you noting that, Ben. We will fix! 

Leslie Brokaw
MIT Sloan Management Review
Ben Towne
Where are the references, beyond #1?  15 are noted in the article.