The Wisdom of Crowds: Why the Many are Smarter Than the Fewby James Surowiecki; London, Little, Brown and Company, 2004; xxi, 295 pp.
James Surowiecki is a staff writer for the The New Yorker and writes for The New York Times, Wired, The Wall Street Journal, and others.
This book explores the role of crowds in decision making, concluding that many diverse opinions can produce better results than single experts. The opening story took place about a hundred years ago at a county fair in Britain. In a contest to see if 800 experts and observers could guess a bull’s weight, a British scientist found the average of their guesses had nearly bull’s eye accuracy, though no single guess was accurate. The author then extends this observation to political, business, financial, and intellectual decisions, concluding that crowds (under proper circumstances of independent thought) often come to better conclusions than individuals, including experts.
The book is divided into two major parts: theory and application. The book is accessible, entertaining, insightful, and sometimes brilliant in analyzing a numbers intensive, potentially boring area and bringing it to life. The insight that it offers for making business decisions is largely untapped and significant. Surowiecki works hard at considering the nuances of his subject. He looks carefully at what it takes to maintain independence of the “crowd” in producing good solutions that are not overly influenced by one point of view. I found the first part of the book to be particularly insightful. It appeared to be the more mature part of the book. I observed that for almost every issue the author raised, he anticipated and responded to concerns that came up in my mind.
The second part of the book, while containing a great deal of insight, was weaker. Perhaps this is due to the breadth of topics the author tried to cover, where he clearly lacked expertise in some. One example of a faulty observation is his conclusion that “remarkably few management or product innovations were pioneered by American companies in the 1970s and 1980s.” What about Intel, Apple, Microsoft, and Cray?
Business leaders would do well to read and discuss this book, then to explore its implications for strategic planning, marketing, product development, and many other areas of the business. I highly recommend it.
Reviewed by Al Erisman
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McLean and Elkind are senior writers for Fortune. McLean, a former investment banking analyst, wrote one of the early (March 2001) articles for Fortune questioning Enron’s dealings before its fall at the end of the year. Elkind is an investigative reporter and author of The Death Shift.
If you want to know how Enron went off track and gain insight into the largest business failure in America, this is the book to read. This is a well-researched account of a company that was fixated on making money to the exclusion of its products and services. If a rule had a loophole, Enron would find it. If a market shift created an opportunity, Enron would exploit it. The authors provide insight into complex financial deals that defy common sense but were somehow justified. They do a wonderful job of painting word pictures that are as absorbing as a good novel. There is a great deal to chew on here, but this is a fine meal.
The only weakness I found was in the Epilogue, “Isn’t Anybody Sorry.” The authors explore why this scandal wasn’t exposed earlier, and point out all parties who failed: the board, auditors, SEC, investment bankers, and stock analysts. Yes, they all could have done better. But the authors don’t apply their 20/20 hindsight to the business press, which also could have done better. More to the point, what can we learn from this to prevent another “Enron like” event?
This is a “must-read” for business leaders, academics, and consultants. Enron is a black mark on U.S. business, and provides fodder for those opposed to capitalism. Yet Enron is not what capitalism is about, since it destroyed shareholder value rather than creating it. Families were broken up, hard working people lost their life savings, and executives went to jail. Let’s understand this to make sure it doesn’t happen again.
Reviewed by Al Erisman
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I, Robot (DVD) directed by Alex Proyas
This is a fun film to watch, with some intriguing ideas buried in the program code. In the year 2035, intelligent robots are a part of everyday life. These robots are hardwired to protect and serve humans, guided by “three laws” that filter their behavior to guarantee our safety. In the traditions of the The Matrix, The Terminator, and strangely TRON, the algorithms we designed to protect and serve us evolve toward a logical, though unforeseen, conclusion. What is a little different about this film is the robots don’t exactly turn against us as in these other films. The consequences are not unlike living in a society governed by laws that keep its citizens “100 percent secure” from terrorists–a rather unattractive proposition for most of us.
Setting aside this movie’s superficial treatment of the economics of robot workers, and optimism about artificial intelligence, this movie takes a slightly new spin in answering an old question. Do we serve technology, or does technology serve us? A must-see for sci-fi buffs, with characteristic comic relief courtesy of Will Smith.
Reviewed by Gerard Beenan
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Super Size Me(DVD) directed by Morgan Spurlock
This film is a humorous look at a serious topic–the relationship of a public health problem (obesity) to personal responsibility, vis-a-vis the American fast food industry. Documentary filmmaker Morgan Spurlock headlines a 30-day pseudo experiment in which he subjects himself to three simple rules: (1) he can only eat at McDonald’s, (2) he must try everything on the menu once, (3) he has to “supersize” (i.e., jumbo drink and fries) if asked. During weekly visits to his physician, a healthy 30-something Spurlock (whose girlfriend is a staunch vegetarian!) experiences large increases in weight and cholesterol, and the onset of liver disease. Meanwhile, Spurlock tours the nation to see how poor eating habits have become a part of American culture. Spurlock, who comes across as cheerfully honest, isn’t just pointing the finger at McDonald’s. During the movie, he repeatedly confesses how much he enjoys eating at McDonald’s.
When the film originally was released in theatres, McDonald’s announced plans to discontinue their “supersize” drinks and fries. While it’s easy to have a cynical view of their response, it’s important to recognize that it’s not the first time they’ve tried to improve the nutritional value of their menu. In the early 1990s, McDonald’s senior management foresaw the downside of high fat food, and made deliberate efforts to offer customers healthier alternatives. Remember the McLean? But Americans wouldn’t bite. In Italy you find salmon salads at McDonald’s; in the Netherlands, veggie burgers. Not so in the U.S. It’s easier to blame “the system” than to take personal responsibility, even when it comes to our unhealthy eating habits. This film at least highlights our need to exercise personal responsibility to solve a systemic public health problem. So stick some low fat popcorn in the microwave, and enjoy the show.
Reviewed by Gerard Beenen