by Rod Collins, Innovation Sherpa at Salt Flats
One of the deepest beliefs of command-and-control management is the assumption that the smartest organization is the one with the smartest individuals. This belief is as old as scientific management itself. According to this way of thinking, just as there is a right way to perform every activity, there are right individuals who are essential for defining what are the right things and for making sure that things are done right. Thus, traditional organizations have long held that the key to the successful achievement of the corporation’s two basic accountabilities of strategy and execution is to hire the smartest individual managers and the brightest functional experts.
Command-and-control management assumes that intelligence fundamentally resides in a select number of star performers who are able to leverage their expertise across large groups of people through proper direction and effective control. Thus, the recruiting efforts and the promotional practices of most companies are focused on competing for and retaining the most talented people. While established management thinking holds that most individual workers are replaceable, this is not so for those star performers whose decision-making and problem-solving prowess are heroically revered. Traditional hierarchical organizations firmly believe in the myth of the individual hero. They are convinced that a single highly intelligent individual can make the difference between success and failure, whether that person is a key senior executive, a functional expert, or even a highly paid consultant.
However, in a rapidly changing world, it is becoming painfully obvious to harried executives that no single individual or even an elite cadre of star performers can adequately process the ever-evolving knowledge of fast-changing markets into operational excellence in real-time. Eric Teller, the CEO of Google X, has astutely recognized that we now live in a world where the pace of technological change exceeds the capacity for most individuals to absorb these changes in real time. If we can’t depend upon smart individuals to process change in time to respond to market developments, what options do business leaders have?
Nobody Is Smarter Than Everybody
If business executives want to build smart companies in a rapidly changing world, they will need to think differently and discover the most untapped resource in their organizations: the collective intelligence of their own people. Innovative organizations, such as Wikipedia and Google, have made this discovery and have leveraged the power of collective intelligence into powerful business models that have radically transformed their industries. The struggling online encyclopedia Nupedia rescued itself from oblivion when it serendipitously discovered an obscure application known as a wiki and transformed itself into Wikipedia by using the wiki platform to leverage the power of collective intelligence. In less than a decade, Wikipedia became the world’s most popular general reference resource. Google, which was a late entry into a crowded field of search engine upstarts, quickly garnered two-thirds of the search market by becoming the first engine to use the wisdom of crowds to rank web pages. These successful enterprises have uncovered the essential management wisdom for our times: Nobody is smarter or faster than everybody.
Two other companies that understand this management wisdom are W. L. Gore & Associates and Morning Star, both of whom have designed their organizations to leverage collective intelligence by eliminating all bosses. In both of these organizations, no one has the authority to make assignments or to control the work of other individuals. Rather than building top-down hierarchies, the founders of these companies designed their organizations as peer-to-peer networks that leverage the collective intelligence of the people who actually do the work to decide what to do and how to do it. And both have achieved remarkable success. Over its six decades, W. L. Gore has made a profit every year it has been in production and is perennially on Fortune’s list of the Best Companies to Work For. Morning Star, which was founded in 1970, has used what they term “self-management” to become the world’s largest tomato processor.
What all of these organizations have in common is a shared value that the smartest organizations are not the ones with the smartest elite individuals, but rather the ones who have the capacity to quickly aggregate and leverage the collective intelligence of everyone in their organizations.
A Counterintuitive Reality
Until recently, the notion that nobody is smarter or faster than everybody has been little more than a nice-sounding platitude that no one really believed. After all, unless you were one of the few who attended Montessori schools—which Google co-founders Larry Page and Sergey Brin did—most of us were reared in an educational system that worshipped at the altar of individual intelligence. From grade school through college, our academic success was measured by individual grades not our contributions to teams of mutual learners. We learned to compete rather than to collaborate with our fellow students. In fact, what enlightened companies call collaboration is considered cheating in most academic settings.
While smart individuals are important in any organization, it isn’t their unique intelligence that is paramount but rather their unique contributions to the overall intelligence of teams. That’s because the blending of the diverse perspectives of different types of intelligences is often the fastest path to the solution of complex problems, as we learned in the summer of 2011 when a diverse group of over 250,000 experts, non-experts, and unusual suspects in a scientific gaming community called Foldit, solved in ten days a biomolecular problem that had alluded the world’s best scientists for over ten years. This means a self-organized group that required no particular credentials for membership was 365 times more effective and efficient than the world’s most credentialed individual experts. Similarly, the non-credentialed contributors of Wikipedia were able to produce approximately 18,000 articles in its first year of operation compared to only 25 articles produced by academic experts in Nupedia’s first year. This means the wisdom of the crowd was 720 times more effective and efficient than the individual experts. These results are completely counterintuitive to everything that most of us have been taught about how intelligence works. However, as counterintuitive as this may seem, the preeminence of collective intelligence has suddenly become a practical reality thanks to proliferation of digital technology over the last two decades.
As we move from the first wave of the digital revolution, which was sparked by connecting people via the Internet, to the second wave where everyone and everything will be hyper-connected in the emerging Internet of Things, our capacity to aggregate and leverage collective intelligence is likely to accelerate as practical applications of artificial intelligence become everyday realities.
The New Organizational Challenge
In a digitally disrupted world, the new challenge of managing large numbers of people is not about finding an elite few smart individuals and giving them the power to command and control the work of others; it’s about building an environment and a culture that naturally and rapidly integrates the intelligent contributions of everyone within an organization. This is what Wikipedia, Google, W. L. Gore, and Morning Star have done very successfully over the span of several decades. Each, in its own way, is a highly developed knowledge network with the capacity to leverage the wisdom of crowds to keep up with a relentless accelerating pace of change.
As we progress deeper into the Digital Age, more managers will come to understand that they can no longer survive by assuming the role of engineers and controllers manipulating the levers of order and authority. Managing at the new pace of change means that managers are now pathfinders and facilitators leading their organizations in partnership with their workers on collective quests for knowledge and speed in service of their customers. Managers skilled in both the social and the systems technologies of collective intelligence understand well that the smartest company is the one with quick access to collective intelligence and they also fully appreciate that, now more than ever, nobody is smarter or faster than everybody.
Rod Collins (@collinsrod) is the Innovation Sherpa at Salt Flats and the author of Wiki Management: A Revolutionary New Model for a Rapidly Changing and Collaborative World (AMACOM Books). He writes for this column on the first Thursday of each month.