His new book The Wisdom of Crowds: why the many are smarter than the few is well worth a read. The basic line of argument is that if you want to make a correct decision or solve a problem, large groups of people are smarter than a few experts. He argues his case persuasively. The stats (I guess from the US) show that the friends on Millionaire get it right 65 percent of the time - which isn�t bad - but as Surowiecki puts it,

�Those random crowds of people with nothing better to do on a weekday afternoon than sit in a TV studio picked the right answer 91 percent of the time�.

Surowiecki goes way beyond quiz shows in applying his thesis. Perhaps most relevant to our work at Demos he says:

�� there�s no real evidence that one can become expert in something as broad as �decision making� or �policy� or �strategy�. Auto repair, piloting, skiing, perhaps even management: these are skills that yield to application, hard work, and native talent. But forecasting an uncertain future and deciding the best course of action in the face of that future are much less likely to do so. And much of what we�ve seen so far suggests that a large group of diverse individuals will come up with better and more robust forecasts and make more intelligent decisions than even the most skilled �decision maker��.

Of course it�s not quite as simple as that. Crowds can (and do) get it wrong. The most macabre example used in the book is the tendency of crowds when confronted by a potential suicide jumper, to start chanting �Jump! Jump!� The larger the crowd, the louder they yell. Surowiecki argues that by understanding the more destructive characteristics of crowds, we can use them more positively.

One of the most interesting chapters is on small decision-making groups. Surowiecki gives the chilling example of the deeply flawed committee processes within Nasa, which led to the Columbia shuttle disaster last year. Transcripts of the phone conferences and meetings that took place show a startling determination not to make changes that didn�t fit with the preordained plan. The thing is, you may well recognise some of the same characteristics in meetings you�ve attended too.

Surowiecki gives a clear explanation of why diversity matters but also how the processes that are needed to make the most of it. It�s those alternative perspectives that make crowds �wise� but as groups get smaller, it becomes easier for experts to take over.

There�s also a great chapter about how crowds are better at predicting the future than experts including an analysis of why the now infamous Policy Analysis Market for predicting terrorist attacks would have worked. The recommendation we made for a regulatory futures market in the Long Game would certainly get Surowiecki�s seal of approval I should think.

The only slightly disappointing section is the one on democracy. The only innovation that he spots is the US idea for a Deliberation Day � which as Surowiecki admits �has a schoolmarmish, eat-your-spinach air about it�. I think there�s a lot of scope for thinking much more radically about this.

Overall, The Wisdom of Crowds is beautifully written, peppered with examples and stories and based on some very interesting theory and evidence. For me, the book should be on the must read list for decision makers in every sector.

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