Wisdom of Crowds: Post #4--Decentralization

Decentralization: By not predicting Pearl Harbor or terrorist events like 9/11, US intelligence agencies have been roundly criticized. In particular, the FBI was beaten up after 9/11 because in hindsight there had been many hints that the attacks were imminent. That very same criticism was made of the CIA about Pearl Harbor. We just can’t stand that we can’t predict the future! The big criticisms of the CIA, the FBI, NSA, and other intelligence agencies was the lack of centralization for decision making. The author argues that decentralization is the key to success, not its Achilles heel. What is core and missing is how to aggregate the diverse, decentralized experts, so that the wisdom of these very smart folks can be brought to bear on the decision-making process—which we know is geometrically better than centralized, homogenized thinkers. On this one, Congress and the president need to take heed.

Wisdom of Crowds: Post #3--Diversity

Diversity: Engage a group of Marines, housewives, engineers, and dog catchers to address a public policy and you’ll get a much more robust decision than with a bunch of politicians sitting around a table. Why? Diversity of experience (cognitive diversity) and knowledge when aggregated tend to come up with better decisions. In fact, diversity begins to act like a “market” which makes far better decisions than individuals or homogenous groups. This cognitive diversity means that by adding people to the decision-making team who know less than experts but who bring different skills and perspective actually improves the group’s overall performance. Diversity ensures that alternative perspectives are brought to bear on the issue that might otherwise get lost. And the smaller or more formal an organization, the more important the power of diversity is to the process because it lacks the power and magnitude of a large market. All this is to say that a wise, diverse group will outperform a CEO anytime.

Wisdom of Crowds: Post #2--Independence

Independence: We’re all aware of peer pressure. In research, it’s called social proof and has been studied for many years. Whether the experiments were people pointing at the sky (the more people pointing at the sky, the more people stopped and looked up) or whether it’s a rush to buy an iPod because everyone around you is, this gets to the heart of the phenomenon of independence. While groups, especially cascading groups (based on early adopters convincing others to come along for the ride), who move toward iPods or Starbucks often make decent decisions, they’d make far better ones if they decided things as a group—but independently! Often groups make decisions sequentially. Think about how what you say in a group might depend on what your colleague or boss might say and how it could easily influence you. What if you collected data simultaneously and anonymously?

Wisdom of Crowds: Post #1--Overview

The Wisdom of Crowds by James Surowiecki (Anchor Books, 2005). Reviewed by Steve Gladis, Ph.D., July 2011.

Overview: Here’s a question—Who’s smarter than any CEO? Answer—the marketplace. So, does that make product development a crap shoot? Hardly. In fact, long before a product gets developed, CEOs have a built-in marketplace to help them. They’re called employees. In a smart and readable text, New Yorker writer James Surowieki, in the genre of Malcolm Gladwell (Blink, The Tipping Point, & Outliers), gives us hope in the form of a crowd. Here’s the shorthand summary of the book: When the educated guesses of a diverse and informed group—guessing about possible outcomes of uncertain events—are aggregated, a near perfect answer results. Surowiecki supplies us with compelling historical and modern-day examples, including one he conducted in Times Square by asking people to guess how many jelly beans were in a jar. But believe me, his examples get bigger and better when he discusses how companies like Eli Lilly, GM, and Hewlett-Packard have successfully enlisted the wisdom of internal crowds to predict where to invest their money for the future. He even offers the Federal Reserve as an example of how a complex issue can be addressed with a structure that uses internal crowds for collective judgment.
A couple of other key concepts were pointed out by the author. First, if you want such groups to be effective, you have to give the group a method to aggregate the opinions and data of their members. Second, if you engage a group in decision making, allow them to assist in implementing decisions. Too often we task groups and then treat them like they were merely advisors. This is the kind of book that senior officers of a company and board members should read right before strategic planning time and not long after it’s all over. According to the author, wise crowds need to have four elements: 1) independence from each other; 2) diversity in their point of view; 3) decentralization; and 4) a good aggregation method. Briefly, independence keeps groups from falling into an “expert” or power trap; diversity of point of view and opinion allows others to look at the problem from different and often revealing perspectives that provide varying glimpses into complex issues; decentralization points out the need for diverse people to think independently from each other in a way that doesn’t comingle the data; and aggregation ensures a way of collecting those data points while preserving the singularity of it. This week, I’ll talk about each of these four of these constructs that make wise crowds.

Made to Stick: Post #8--An Example

One Sticky Example: The authors add the simple story of Jared—the young man who lost a ton of weight on the Subway Diet. It follows the S-U-C-C-E-S-s pattern: Simple: Jared eats Subway sandwiches every day to lose weight; Unexpected: Jared loses weight on a fast food diet; Concrete: He holds up his huge old pants; Credible: he’s a real guy—not an actor; Emotional: We have a soft spot in our heart for Jared’s overcoming his weight issue; Story: A good guy overcomes adversity and wins…a classic story.

Made to Stick: Post #7--Stories

Stories: Ever since most of us were kids, some adult saying, “I want to tell you a story,” has always quieted down the kids. Something about hearing a story that captivates all of us. And when it comes to ideas sticking, stories work better than facts or “data points.” We also know that mentally rehearsing something like imagining ourselves completing a dive or giving a speech gives us 67% benefit of actually practicing the technique. Stories are just like a flight simulator. We often tell ourselves stories, both good and bad, and thus, succeed or fail often based on how sticky those stories we tell ourselves are.

Made to Stick: Post #6--Emotional

Emotional: Many would contend that ultimately all decisions have emotions at their basis. The car you drive, the house you live in, even the clothes you wear have some foundation in emotions you feel. Conjuring up the right emotion to get someone to do something is thus critical. The authors talk about how hard it is to get a teenager to stop smoking, unless you can get them to resent Big Tobacco. The authors also discovered research that people will give money to individuals, not concepts—not exactly groundbreaking but fascinating in their explanation. The message is simple—make people “feel” a heartfelt emotion if you want them to do something. Mother Teresa said it (and the authors quote her) ‘If I look at the mass, I will never act. If I look at the one, I will.” Thus, appealing to people’s emotions and their identities works.

Made to Stick: Post #5--Credibility

Credibility: Most of us know that experts carry credibility and that such credibility generalizes. That’s how Michael Jordan can sell Hanes underwear! But there are other ways to get credibility, such as, offering… concrete examples, riveting demonstrations, analogies and context, and personal stories. I recall a memorable “sticky” ad about drugs. They showed a raw egg and a voiceover said, “This is your brain.” Next, someone fried the egg and the voiceover said…”This is your brain on drugs!” The image was literally seared into my brain and FAR better than a raft of statistics about how drugs can hurt us. Another example can be found on page 144. Stephen Covey (in The Eight Habit) writes about a study of 23,000 people concerning understanding company mission and goals. He first provides an impressive list of statistics, but then puts it into a soccer team analogy that makes the statistics come alive. For example in the statistical recitation he talks about only 37% of people have a clear understanding of what an organization is trying to achieve. In the analogy, he explains it this way: ‘If say a soccer team had the same scores, only 4 of 11 players on the field would know which goal was theirs.” Now that’s compelling and memorable—sticky!

Made to Stick: Post #4--Concrete

Concrete: Our senses make things real and memorable. The vision of a sweating glass of ice tea on a humid July afternoon is a far more powerful and memorable image than simply saying that it’s hot July afternoon. Our brains are wired to our senses and, therefore, we remember concrete images better than abstractions—such as using the word “currency” vs. “a crisp five dollar bill.” We’ve all heard of Aesop’s Fables. This ancient Greek slave told us memorable stories about universal truths. Remember the Tortoise and the Hare…about how slow and steady wins the race? I’ve personally experienced the value of concreteness that comes from writing business fables—fictionalized case studies that put concepts into action. People love such fables because they get to “see” what the author is talking about. Finally, there’s a fascinating segment in the Made to Stick called “Brown Eyes, Blue Eyes” that describe how a teacher taught a class about prejudice…both effective and powerful.

Made to Stick: Post #3--Unexpected

Unexpected: Surprise (unexpectedness) will always outshine predictability every time. That’s why we remember and like the unexpected. In fact, jokes make people laugh because of unexpected endings—twists literally tickle people. For example, I routinely tune out when airline attendants read mandatory safety instructions, until one time, the attended went through a stand-up comedy routine about the instructions. Not only did we all listen and laugh, but everyone clapped when she finished. We couldn’t wait for landing instructions—and she did not disappoint! When people think that they get what you’re about to say, they ignore you. However, when you can surprise them, they engage. That’s why unusual customer service makes people take notice. Turn things on their head or go above and beyond and watch what happens and how well you “stick” in your customer’s mind.

Made to Stick: Post #2--Simplicity

Simplicity: The KISS principle is central to most Marines and military folks I know: Keep is Simple, Stupid. There’s a thing the Heath’s call the “curse of knowledge” that we all need to avoid. When experts inadvertently overwhelm lay people with every detail they have learned, they lose the chance at having any impact at all. Finding the core of an idea and presenting it in a powerful and lasting way is at the heart of using analogies and metaphors to help people bridge from something they know to something new. It’s like picturing and idea from your head. Used in Hollywood, a talent agent might “pitch” a script to a producer like this: ”This new political comedy is like what might happen if Woody Allen debated Jerry Seinfeld for the presidency of the United States! Funny and smart political stuff.”

Made to Stick: Post #1--Overview

Made to Stick by Chip Heath and Dan Heath (Random House, 2008) Reviewed by Steve Gladis, Ph.D., July 2011
Overview: Making ideas last or, as the authors put it, “stick,” is both simple and compelling. It’s simple if you know six basic principles and compelling if you’re on the other side of someone using these powerful strategies. The authors (brothers and faculty members—one at Duke, the other at Stanford) are no novices to best sellers; just check out their other blockbuster, Switch. The focus of Made to Stick is clearly on influence. While not new, the concept and their explanations of the principles will be new to many readers. They cover six major principles of influence or “stickiness”: 1) Simplicity: The Kiss principle…keep it simple, stupid; 2) Unexpectedness: Shock, surprise, and attention-getting tactics stick in the mind of the audience (however large or small) and are the staple of every good public speaker; 3) Concreteness: Making it real in detail makes it stick; 4) Credibility: Reputation is the key, and getting people to believe in you makes your words stick; 5) Emotional: All decisions ultimately rest on how we feel about something. Deal with emotions or they’ll deal with you; 6) Stories: At our core, we’re tribal folk who rely on stories to understand the world. And when it comes to sticking, the Heaths have created a book that will stick around for many years. An easy mnemonic to remember this process is SUCCESs: Simple-Unexpected-Concrete-Credentialed-Emotional-Story-and “s” just to make the word spell right!

A Leap of Reason: Post #7 - Final Words and Chapters

Final Words: The final chapters of the book offer some extremely useful direction:
a. Ideas to Action: This chapter provides an excellent management-to-outcomes model diagrammed on p. 64 (Performance Management Mindset and System).
b. Compendium of Top Readings for Mission Effectiveness: This chapter provides an outstanding reading list that could be the framework of a graduate school program in effective nonprofit management. Excellent work.
c. Final chapters provide perspectives by social sector leaders, all of whom have highly creditable experience and influence in social sector management.

This book is destined to become a cornerstone in the movement to make nonprofits manage to outcomes in an era of scarcity.

A Leap of Reason: Post #6 - Quantum Leap

A Quantum Leap of Reason: You don’t appreciate something until it’s taken away. And, the social sector is in for a real ride, given the fiscal situation.
a. “We must help nonprofits and funders alike understand the value proposition for managing to outcomes—through data and stories.
b. We could start a prestigious award….establish a voluntary program (like ISO 9001).
c. The time to dramatically increase our collective impact is now when we’re needed the most.”

A Leap of Reason: Post #5 - Change

Incremental Change is Not Enough: Organizational change isn’t enough in times of such fiscal austerity. The entire nonprofit sector has to change its business-as-usual approach.
a. “Our country’s grim fiscal situation is both a frightening reality and an opportunity to make a quantum change.
b. We must mobilize a sector-wide leap of reason. If not now, when?”

A Leap of Reason: Post #4 - Culture

Culture is the Key: Managing outcomes successfully requires a leader with courage who’s willing to develop a culture of performance appraisal.
a. “An organization’s culture has a huge impact on whether the organization can achieve what it hopes to for those it serves.
b. The best way to influence culture is to recruit and retain top talent whose values and skills match the culture to which you aspire.
c. Take time to flesh out your guiding principles, and do what it takes to make them more than just slogans on the wall above the water cooler.”