Going it alone, maybe inside your business or working with the wider community? Closed or Open Innovation? In this hyper-connected world which one is going to enable you to innovate efficiently and effectively? Big questions that are still very much challenging the leading academics and organisations across the world.
This thought piece will explore the work of James Surowiecki and his view in the power of crowds. It will examine the danger of groupthink and consider how Open Innovation can be used as part of an organisations innovation strategy.
The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations, is a book written by James Surowiecki about how groups consolidate information, to produce outcomes that are arguably better than could be made by any individual in the group.
In Surowiecki’s vision of the ‘wisdom of crowds’ and advantages fall into three main types, which he categorises as:
Cognition: Cognitive and information processing, such as market judgment, which he argues can be much faster, more reliable, and less subject to political forces than the deliberations of experts or expert committees.
Coordination: Coordination of behaviour as crowds naturally optimise effort to produce the most effective outcome. And,
Cooperation: How groups of people can form networks of trust without a central system controlling their behaviour or directly enforcing their compliance.
In recognising the strength and benefits of crowds, Surowiecki also explores situations where groups and organisations produce extremely poor judgment, to which he argues that in these types of situations their cognition or cooperation failed because (in one way or another) the members of the crowd or large group were too conscious of the opinions of others and began to emulate each other and conform rather than think differently.
Groupishness makes evolutionary sense. In our ancestral environment, natural selection would have favoured individuals who cooperated with each other and were quick to distinguish friend from foe. Crowds, contrary to how they are usually portrayed, tend to be highly co-operative and altruistic.
Cohesion sounds like a conspicuously desirable quality, a gold standard for which groups or organisations should all strive. Sometimes, however, it can have a highly undesirable consequence, encouraging a warped decision-making process known as groupthink. Because cohesion feels great – it increases self-esteem and gives people a sense of power – there is a strong incentive to maintain it at the expense of all else. As a result, individuals are often reluctant to voice opinions or share information that might threaten the consensus. They purposefully avoid dissent, which can be a very dangerous situation indeed. This scenario can be particular debilitating for groups and organisations needing or wanting to be innovative. Irving Janis, who created the term ‘groupthink’ described it as ‘a deterioration of mental efficiency, reality testing and moral judgement’ caused by the pressure to conform to group norms. Groupthink is a risk wherever groups strive for harmony, when fear of rocking the boat can cause you to miss a gaping hole in the bottom.
The example of Lehman Brothers bankruptcy in the 2008 financial crisis, shows how the culture of in-house loyalty encouraged by CEO Richard Fuld made it almost impossible for alternative views to be heard or contemplated. Executives were so fixated on agreeing with each other or navel gazing at how they saw the world that they failed to spot or point out to colleagues the obvious signs of dysfunction.
One of the most-high profile groupthink-fuelled disasters was the loss of the space shuttle Columbia, which exploded while re-entering the atmosphere in 2003, killing all seven crew members. The immediate cause was the damage done to the shuttles heat shield by a piece of foam insulation that had come loose during take-off. NASA could have corrected the problem while the shuttle was still in orbit, yet transcripts of its flight management team meetings during those sixteen days show a fatal reluctance to consider the worst-case scenario. In NASA’s success orientated culture of the time, in which technological risks were weighed against political and economic consequences, no one wanted to play the dissenter and question the status quo by pushing the possibility that the foam could have ruptured the shuttles wing. According to one report the team made it almost impossible for dissenting information to be discussed. For example, managers knew that foam had hit the wing, but they refused to arrange satellite images to investigate further and even cancelled requests for satellite pictures from outside experts.
How to avoid groupthink in your organisation
The psychologist Irving Janis, originator of the term ‘groupthink’, listed eight symptoms, any one of which might indicate that a group is in danger of conforming to its own norms and corrupting its decision-making process as a result. If your organisation exhibits any of these, it may be time to reassess its working practices:
- An illusion of invulnerability, shared by most or all members, which creates excessive optimism and encourages taking extreme risks.
- An unquestioned belief in the group’s inherent morality.
- A collective effort to discount warnings or any information that might force members to reconsider their assumptions.
- Stereotyped views of opposition leaders as too warrant genuine attempts to negotiate.
- An inclination among members to self-censor any doubts they have about the apparent group consensus.
- A shared illusion of unanimity over judgements that conform to the majority view, either due to self-censorship or the false assumption that silence means consent.
- Direct pressure on any member who expresses strong arguments against any of the groups commitments.
- The emergence of self-appointed ‘guardians’ who take it upon themselves to protect the group from adverse information.
We shouldn’t be afraid to try to control the group, to fight the stultifying and inevitable effects of groupthink. In this age of social enclaves, we should be cagey of consensus and instead celebrate nonconformity. One of the ways that this occurs in the Innovation ecosystem is the application of Open Innovation strategies.
Henry Chesbrough defined Open Innovation as the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.
An exemplar of Open Innovation is P&G who went from “Not invented here” to Open Innovation. When Alan G. Lafley became chairman of P&G in 2000, he made it clear he wanted innovation “across the spectrum” – in how the company invents, markets, manufactures, and distributes its products. The simple driver to this was the need for the business to produce increasing levels of profitability and he needed to find imaginative ways to deliver his vision. One of his major initiatives was to break down the walls that used to be separate product categories, business units, sectors, and brands, thus allowing innovation to flow freely across the entire organisation. Arguably, more importantly, Lafley threw open P&G’s doors to innovators who are not on the company’s payroll, setting a goal for his organisation to source at least 50 percent of its innovations from outside the company (up from roughly 10 percent at the time). Thanks to a new organisation model the called Connect and Develop, the company was able to bring hundreds of new products to the market that had their genesis, in whole or in part, outside P&G. Larry Huston, former vice president for innovation and knowledge at P&G, called it out by saying…
“You can’t possess all the science and brilliant minds… In our R&D organisation we have 7,500 people in 150 science areas, but there are 1.5 million high-quality people outside P&G. It doesn’t take a genius to figure out that if you can engage the brains of your 7,500, plus the key ones from that 1.5 million, you can build better products.”
As innovators, change makers and upstarters, we are asking you, our crowd, to take a look at our challenges page. This is a new addition to our Future Shapers Platform where we give a shout out to our partners Open Innovation asks.
We are not getting into the Open Innovation space as a service provider as we are lucky enough to have a number of fantastic partners including IdeasUK, Leading Edge Only and Blue Globe Innovation.