This post is about more insights derived from The Wisdom of Crowds by James Surowiecki. His opening anecdote was about a country fair where there was a prize for guessing the butchered weight of meat from a live ox. The average of the guesses from the public was not only just about spot on; it was also more accurate than that of any of the cattle experts.
This is exactly what happens when we collect insights about what are the Power Attributes that influence customers choice of products within a market. In over 20 different studies where we have done the assessment in workshops with customers and management, the collective view seems much more accurate than that of any one person.
We often look at which attributes are important to people when they are considering the purchase of a product. Each manager or customer then produces their own ranking. When we analyse the ranked scores for each attribute, the group result seems to make a lot of sense. Not only that, but individuals within the group are often happier with the group score than their own individual assessment.
So what is the implication of this for gathering insights and making decisions?
Well structured quantitative assessments of large groups of customers will always provide the most robust insight where this is practical and valid. But often this is not affordable or just impractical.
Our experience would suggest that gathering opinions from a smaller group is still helpful. This can be done in a workshop meeting where you can focus on the questions and generate discussion and consensus, or it can be done via simple online or paper surveys which takes up less time and is often quicker.
The important thing is to remember the criteria for getting reliable insight. In his book, Surowiecki identified four criteria necessary for a crowd to have a useful insight. His criteria are in bold and our interpretation is after the hyphen.
- You must have diversity of opinion – pick your group to represent the market group
- People need to be thinking and acting independently – always collect individual votes and responses
- There needs to be decentralisation with people relying on their own local knowledge rather than an aggregated average experience – make sure people report on what they think and not what they think someone else thinks.
- There needs to be a way to aggregate all the private opinions of the participants into a collective decision – do some good analysis on the results, count the responses, collect scores and analyse them properly.
You can generate insights quickly and economically using a number of self help techniques if you stick to the important principles.
We often advocate an internal survey as a prelude to a workshop. This always adds considerable value as we are able to work with The Wisdom of the Crowd and not just opinion of the boss. We have also used customer workshops as a cost effective alternative to high cost and slower quantitative research. But we apply these principles every time.
A few years ago our own research found that the most effective marketing teams spent more time interacting with other teams within the business rather than just with their agencies and colleagues. This meant that they were much more highly regarded by the other business functions and as a result developed better ideas and proved to be more effective at implementing practical growth initiatives.
I was reminded that this insight is likely to remain a durable truth, when I was talking to a friend about a podcast interview with James Surowiecki.
Suowiecki is the author of The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations. I was intrigued by the simple idea contained in the title. It made sense to me as I thought about my experience in observing and participating in business decision making. It ties directly to our insight that marketing teams need to consult more widely throughout the business in order to improve their ideas and win support for their implementation.
The experts aren’t always right is the message of the opening anecdote about a country fair where there was a prize for guessing the butchered weight of meat from a live ox. The average of the guesses from the public was not only just about spot on; it was also more accurate than that of any of the cattle experts.
Not all crowds are wise however as anyone who heavily invested in the stock market during the dotcom boom will tell you. So there are four key criteria that Suowiecki identified as separating wise crowds from those that make bad decisions.
There needs to be diversity of opinion. In a business context this means people need to come together with different experiences and different information.
People need to be thinking and acting independently. Their opinions mustn’t be determined by those around them like the boss or the attractive colleague they are hoping to invite out to dinner.
There needs to be decentralisation with people relying on their own local knowledge rather than an aggregated average experience.
There needs to be a way to aggregate all the private opinions of the participants into a collective decision.
These criteria precisely correspond with we have found makes all the difference when working with clients over the past 10 years. This edition of More Growth provides you with four practical tips on getting to the best decisions.
Make the team cross functional and even international where relevant. This will encourage a diversity of opinion. In our experience better plans that result in more growth come when the whole business team is involved rather than just the marketing team.
Hold debates when the boss is not in the room. Thinking and acting independently can come from not always having the boss in the room. Of course the boss has an important contribution to make but if they express a view on the solution too early then it results in too much time being spent on figuring out how to execute that idea, and not enough on exploring if there is a better idea.
Create new ways to consult with people about what they think. We have found that internal online surveys or well run workshops will will ensure that people are able to say "this is what I think" rather than the much more speculative "this is what I think they think".
Use workshops to share and understand aggregate opinions. These devices also increase peoples’ commitment to the outcome.
The marketing team might be the customer expert but better business decisions, leading to more growth, usually come from involving all parts of the business