Are experts really smarter than the rest of us? Most would have us think so, but the answer depends on the circumstances. James Surowiecki, business columnist forThe New Yorker magazine, contends in his book, The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations (Currency Books/ Doubleday, 2004), that “randomly assembled groups of non-experts consistently demonstrate more astuteness than individual experts.” He cites examples from honeybees to horserace odds, from Google’s algorithms to Wikipedia’s consensus-edited data.

When Crowds Trump Experts

Diverse collections of individuals excel at three types of decisions:

• Cognition problems that have definite outcomes, such as the probable winner of a football game or the number of items people will buy in a given period. Viewers of the TV show “Who Wants to Be a Millionaire” will recall that when expert friends were called upon to help a contestant, they were right only 65 percent of the time, whereas the randomly selected members of the studio audience scored 91 percent.
• Coordination problems involving buyers and sellers finding each other in virtual marketplaces like Craigslist, or the choreography of pedestrians on a crowded sidewalk.
• Cooperation problems involving strangers finding and acting with others toward a common good.

“Randomly assembled groups of non-experts consistently demonstrate more astuteness than individual experts.”

Not all crowds are wise. The wisdom of the crowd requires four conditions:

• Diversity of Opinion. Greek poet Archilochus wrote a fable about hedgehogs and foxes. Hedgehogs know one big thing, and everything in their existence relates to that specific knowledge. Foxes know a little about a lot and therefore are not wedded to a single approach to solving complex problems. That sort of cognitive diversity is found in crowds.
• Independence. This is the antidote to groupthink, the tendency of people to gravitate toward strong opinion makers in the same way animals tend to herd. Groupthink usually happens when people forgo independently arrived-at judgments in favor of mindlessly following false clues like a long line at a movie or restaurant.
• Decentralization. Command-and-control hierarchies impede diversity, independence, and, ultimately, group wisdom.
• Domain-Specific Knowledge. The crowd’s wisdom was helpless in keeping us out of Iraq because individuals lacked the specific knowledge about the absence of weapons of mass destruction.

Striking a Balance

The relevance to management here is that most organizational cultures still overvalue experts, especially when they are of high rank. Too often we confuse tenure with wisdom. “He’s the boss, therefore he must know what he’s doing.” Not all the time. For example, in the news business, when it comes to technical and social savvy about the Internet and its impact on potential customers, the crowd of newcomers and outsiders is far wiser and adept than the traditional but older experts. Similarly, the diversity of the crowd is far more likely to spot trends in the marketplace and produce ideas to meet changing needs of customers.

In short, our traditional management assumptions linking rank with wisdom have to be challenged. To be really smart, leaders need to tap into the wisdom of the crowd they have assembled in the organization, as well as outside stakeholders. They can do this by maintaining diversity, especially of age and gender, and by encouraging input from customers and vendors.

The crowd is not infallible, but neither are the experts. Adept leaders know how to use both.

Edward D. Miller is a former editor and publisher of The Morning Call in Allentown, PA, and is an affiliate of The Poynter Institute. He is a cofounder of the Society of Newspaper Design and the First Amendment Coalition of Pennsylvania. Ed has served as a Pulitzer Prize juror. This article originally appeared in his e-newsletter, Reflections on Leadership, February 2, 2008. To subscribe, go to http://www.newsroomleadership.com.