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James Surowiecki has been a staff writer at The New Yorker since 2000. He writes The Financial Page. Surowiecki came to The New Yorker from Slate, where he wrote the Moneybox[…]

James Surowiecki gives tips on how to use the Internet to stay competitive without a job.

Question: Are there companies that are successfully bringing these varied perspectives to their businesses?

James Surowiecki: Nobody exactly comes to mind.  I mean, I think that there are companies that are doing this.  I think that the interesting thing about it is, if you look at corporate America, it definitely has gotten better in terms of recognizing the need, for instance, to break down silos.  I mean, there are financial firms that have tried to do a better job of that, although it would be hard pressed to say the results have been extraordinary.  But I think that’s one of the big things that the companies have done.

I think that if you look at a company like Google, which on the one hand, obviously, is not diverse in the sense that it tends to hire very, very smart people, but I think is actually trying to be diverse in terms of the kind of people it hires.  And also, in terms of breaking down, not just silos between divisions, but also hierarchies inside the organization.  So, I think that’s a company that has tried to do it. 

IBM arguably is a company that also is trying to do this in terms of building cross-disciplinary teams.  Working across the organization and the like.  But I think in general, corporate America is trying to do a better job of that.  I think the big challenge is really that when the – to use a cliché, when the rubber hits the road.  The problem is not necessarily the organizational-wide issue, the problem is oftentimes inside the organization when it comes to things, as I said earlier, like building teams, or figuring out how you’re going to do projects.  And one of the challenges there is that although we kind of like the idea of diversity maybe in theory, you know we sort of like the idea of the independent thinker, we like the idea of getting lots of different opinions.  In practice, it turns out that diversity is hard to implement on an organizational level.  And it’s hard to implement because one of the things that diversity does, and one of the things it requires is a willingness to have arguments.  It’s a willingness to actually accept differences of opinion.  It doesn’t sound like that radical a concept.  But, in fact, when you look at surveys, for instance, of people who have worked on diverse teams versus people who work on more homogeneous teams, what you find is that even when the diverse teams perform better, most of the people on them are less satisfied with their experience.  And people say things like, “I felt like I wasn’t listened to, I felt like I was taken advantage of,” or whatever.  A lot of which really means, my ideas weren’t necessarily implemented.  And so, I think that that’s one of the biggest challenges when it comes to turning diversity from a kind of a nice idea into something that is practically really powerful. 

Question: What are lessons that a displaced worker could use to stay competitive?

James Surowiecki: I actually think it’s important when you think about the idea of the wisdom of crowds to recognize that it is not about replacing or making the individual irrelevant.  In fact, if you think about the importance of diversity and independence I making crowds intelligent, it actually stresses in some ways the fundamental nature of individuals thinking for themselves.  So, in fact, crowds work least well when people are just kind of going along with what everybody else is doing, or kind of swimming with the crowd in a sense.  There’s a paradox here.  But the paradox is really, that crowds are smartest when people in them are thinking as much like individuals as possible. 

I would argue, in fact my argument for if you want to try to understand things like bubbles and what happens during bubbles, stock market bubbles or other kinds of asset bubbles.  Is that actually, independence really breaks down in some fundamental sense and people start making their decisions primarily based on what everybody else is doing.  There’s always in impulse to do that in markets, to try to ride the tide and then hope you can get out early, basically.  But I think what happens during bubbles is that that’s really amplified. 

So, one argument for what individual should do is actually there is a premium, or there should be a premium placed on trying to think for yourself. There’s a premium placed, I think – there should be a premium placed really on diversity of thought and diversity of background.  So, I actually think, interestingly, and maybe hopefully – maybe falsely hopefully, that going forward, organizations should place more of a premium on people who are able to approach problems from kind of diverse backgrounds.  So, instead of necessarily saying we need to hire people only who have a very traditional model of training, very traditional backgrounds that there really is a case for hiring people who have slightly more unconventional backgrounds.  And so, in and of itself, I don’t think that’s something that people should try to avoid. 

The other thing I would say in terms of the individual, in terms of diversity, I think is really interesting is, the internet for me is actually one, if not the, one of the greatest tools for promoting diversity of thought that’s ever been invented.  I mean, if you think about, as you said the sea of information, but if you think about the shear variety of information sources, or perspectives that are out there, it’s extraordinary.  Right?  There’s no better tool for actually kind of tweaking your mind and looking at things from a different perspective and the rest of it.  The problem is that I think most of us just almost naturally don’t really use the Internet in that way.  That actually if you look at those kinds of network maps that trace the sources of where do people link to, where are links coming from and the like, you actually see much tighter connections than you would maybe would hope for or would expect.  And so one of the lessons I really think is important is the way I put it is, try to keep your connections on the net loose, rather than tight.  Have lots of loose connections rather than just a few tight connections.  I think that applies to social networks, but I think it also applies in probably is more important, when it comes to information networks. 

Even if it infuriates you, read sites that don’t give you what you already kind of expect, what you already think.  It’s very easy to do on the net.  It doesn’t take up a lot more time, or whatever, but I think that that is really one of the keys on an individual level to kind of really reaping the best of what’s out there.  And also to becoming a better thinker.

Question: What are the risks to using this crowd sourced model for businesses?

James Surowiecki: I don’t think there’s much danger of disaffecting the crowd inside organizations for this reason.  To the extent that you can get people to actually feel like they’re being listened to, that they actually have some input, maybe they’re not actually making actual decisions, but they’re having a real voice in what the company is doing, I think that’s just a plus.  That actually makes a big difference in terms of employee motivation and in terms of getting people engaged with the organization. 

Now, I don’t think that’s the real reason to do it.  The reason to use the wisdom of crowds is that it’s going to make your decisions better.  It’s going to make your organizations smarter.  But I think that that is a useful byproduct.  I think the bigger challenge in terms of individuals and in terms of people is actually to some extent – it’s not quite the opposite, but it’s sort of the opposite, which is that the real challenge is getting people to participate.  The real challenge is getting people – to convince people that this actually is going to be real.  That is actually matters that it isn’t just kind of another one of these team building exercises, or suggestion boxes that people do and then the CEO is like, well none of these fit with what I want to do, so I’ll go ahead and do it.  So, I think that’s the other thing. 

Now, one challenge people do talk about, whether this is kind of alienating for your top performers, and etc., etc., the people who are the experts.  The wisdom of crowds is not in any way a war on experts.  It’s not meant to say that you should get rid of experts, not meant to say that businesses should go out on Times Square and assemble a group of people and ask them a question.  The more the people in the group know, the better its collective decision will be.  It really just is an argument just of saying, instead of relying solely on the judgments of one or two people that actually you really want to try to incorporate the views of more of your employees, and in some cases people outside your organization.  I mean, companies have done a good job in some cases, not many but a few, of incorporating the opinions of their suppliers and of there customers, and I think that’s something else going forward that’s going to be very important.  And I think that’s the big thing. 

The last thing I would say about the risk question is, it’s a mistake to do this thinking our judgment is suddenly going to become perfect.  The argument that I would make is not the wisdom of crowds is going to give you the best possible answer, it’s that it’s going to give you, most of the time, a better answer than any one person can give you.  And I think that inside organizations in particular, there’s a tremendous amount of information, a tremendous amount of knowledge that just gets buried.  The way organizations are set up just doesn’t do a good job of getting information from where it is to where it needs to be.  And to the extent you can change that by using these kinds of wisdom of crowds prophesies, the results will be surprisingly good. 

Just one last thing – I’m going on here, but Lou Platt used to be the CEO of Hewlett Packard, had the saying where he said, “If Hewlett Packard knew what Hewlett Packard knows, we would be a far stronger company.”  And what he was saying was, the knowledge we want, the information we want, it’s here.  It’s somewhere inside this organization.  Let’s just find ways to get at it.  And that, I think is a real lesson.  

Recorded on January 15, 2010

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