Home » Archive » Wheelbarrow: The wisdom of blinking

, written by Jeremy. Read the commentary.

I’ve been reading a fabricated debate at Slate between James Surowiecki, author of The Wisdom of Crowds, and Malcolm Gladwell, author of Blink. I’ll be revising this post, I wanted to get it up while I mull over the fine print some more.

My great interest in these authors is both are discussing the use of information in decision making – and this is a primary concern for sift.

James Surowiecki explains collective judgement:

The collective judgment of ordinary people is … virtually indistinguishable from the inputs of an [expert] with years of experience. Why does this work? The key is that even though each person in the group is making mistakes (often, lots of them), as long as the group is large enough and diverse enough, the errors people make effectively cancel themselves out. And what remains, remarkably often, is the information you’re looking for.

Malcolm Gladwell adds strength to this argument by explaining the value of rapid cognition:

One of the key arguments in my book is that human beings think in two very different ways. Sometimes we consciously and carefully gather all facts, rationally sort through them, and draw what we take to be a rational conclusion (the Standard Model). And sometimes we reach conclusions unconsciously—our mind quickly and silently sorts through the available information and draws an immediate judgment, which may be done so quickly and so far below the level of awareness that we may have no understanding of where our conclusions came from. I call this Rapid Cognition. I think the Rapid Cognition Model needs to be taken far more seriously—that it’s smarter and more sophisticated and certainly more influential than we generally give it credit it for.

The result of their analysis seems to imply that entrepreneurs would benefit significantly from having access to the judgments of their customers or at least their peers when making decisions.

James Surowiecki goes on to explain the conditions under which rapid cognition decisions are best made:

There’s a famous study that was done of expert racetrack bettors that illustrates this point. The bettors were first given five pieces of information about the horses in a race and asked to predict the outcome. They were also asked how confident they were in their predictions. Then they were given, successively, 10, 20, and 40 pieces of information and asked to make predictions. The additional information didn’t make their forecasts any more accurate. But it did make them (falsely) more confident in their forecasts. When it comes to data, frugality is often a virtue.

But … it’s often hard to know in advance which information is, … “central to the outcome of a decision” and which is irrelevant or, even more important, corrupting. And figuring out which information really does matter (so we can make our decision-making more disciplined) isn’t something we can do with rapid cognition. It often requires the careful study of data to see what factors are and aren’t correlated with each other, and it requires an analytic approach that seems to belong more to the Standard Model.

This may underline the need to sift information carefully before rolling it into the hands of decision makers. The case I think most entrepreneurs face is not one of excess information – rather excess opportunities and not enough information to choose amongst them. The example James provides suggests the value of screening the information entrepreneurs must deal with so that the distractions are eliminated.

The big problem, James Surowiecki points out, is that its tough to know when group judgement or rapid cognition or traditional decision models should be used:

More important, there are problems where you need to know a lot just to understand the question you’re trying to answer. In those cases, relying on a group of laypeople may be futile.

… the deep paradox at the heart of Blink, which is that rapid cognition often works best when there are well-defined rules or structures to guide the people using it. As you put it, we need a structure for spontaneity. We usually think of intuition as simply going with your gut, and obviously that is in part what rapid cognition is about. But I think what Blink shows, oddly, is that going with your gut will often lead you astray, if you’re not keenly aware of the flaws that might be shaping your decision. Successful thin-slicing happens very quickly, but it requires a keen sense of self-awareness, too.

This deserves some further thought. But at least between The Wisdom of Crowds and Blink, we are closer to understanding these issues. Malcolm Gladwell writes:

I think ordinary people can be good snap decision-makers, so long as they get a little help. Sometimes that help is best found in the prescriptions put forth in The Wisdom of Crowds. But sometimes I think we can achieve the same goals by tinkering with the environment in which decisions are made.

Update: Francis Bacon may have something to say on the matter too.

He wrote: The mind, hastily and without choice, imbibes and treasures up the first notices of things, from where all the rest proceed, errors must forever prevail, and remain uncorrected.

He cautioned thinkers to beware of the idols of the mind: tribes (assuming order in chaos), caves (individual beliefs and passions), marketplace (words that induce belief in non-existant things), and theatre (unquestioning acceptance of beliefs and misleading demonstrations).

As a solution to these threats, Bacon advocates the repeated testing of knowledge by experiment. This, he said, is the key to the cutting edge of learning.

Now I haven’t done any deeper looking into this, but thin-slicing (as Gladwell advocates) suggests that if rapid cognition is the engine of most decisions and the wisdom of crowds is founded on the rapid cognition of lots of individuals – the real threat is as Bacon describes – that the minds of these individuals are proceeding on uncorrected, hastily structured notices of things.

It seems that both Gladwell and Surowiecki are fighting the modern creation of expertise instead of the employment of expertise, and if this is true, then Bacon’s suggestion for learning – repeated testing of knowledge by experimentation – deserves further consideration.

A bit more fodder for the discussion:

In Human Action, Ludwig von Mises, cautions us to consider all possible outcomes of crowd decisions, not just the positive ones. Allowing the crowd to make decisions does not “prevent majorities from falling victim to erroneous ideas and from adopting inappropriate polices which not only fail to realize the ends aimed at but result in disaster. Majorities too may err and destroy our civilisation.”

Whether or not a crowd of pseudo-experts can come up with something statistically equal to the decision of a full-fledged expert is one thing. But it’s difficult to hold a crowd responsible for the outcomes. And without that responsibility, we all know, people tend to get silly. At least when an expert decides, we know who to hold accountable when it falls apart.

Again: this will be revised.

Commentary

[…] n an effort to resolve fads with practicality, I’ve devised the wheelbarrow experiment. Below is the first of the experiments; hopefully many more will follow. In all cases the wheelbarrow […]

[…] Blinking at the crowd Filed under: general — admin @ 10:34 pm I’ve been pondering the relationship between entrepreneurs/young companies and the ideas presented in James Su […]

Other peoples thoughts that come to mind;
– successful people make decisions quickly, and change decisions slowly, unsuccessful people make decisions slowly, and change decisions quickly.

First, Stop and THINK
Gladwell argues that these decisions taken at the blink of an eye are rarely accorded as much attention as the traditional more deliberate decision making process… But is this latter assumption valid? Do we really take time to make a decision carefully?

Orange, there’s two points I think. First, Gladwell is right, intuitive or instinctive choices are far more sophisticated than generally understood. Second, you are right, we generally don’t think before we act and Gladwell’s work could be misinterpreted to endorse that habit.

Similarly, I think there are two lessons for business. First, the instinctive decisions of an entrepreneur deserve more study – there is an intangible playing there that would be valuable to understand. Second, as advisers, we have a mountain to climb if we wish to sell considered advice rather than flimsily packaged gut responses. So far I don’t see a market for wisdom.

But markets are created, eh?

[…] In an effort to resolve fads with practicality, I’ve devised the wheelbarrow experiment. Below is the first of the experiments; hopefully many more will follow. In all cases the wheelbarrow will hold unsynthesised but related material that is gathered over time. This facilitates ongoing research, opens the topic for discussion early, and acts as a holding tank for blossoming thoughts. Subsequent “official” posts will reference the wheelbarrow and any appropriate comments. […]