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Sunday, July 31, 2011

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.

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