The wisdom of crowds

I have heard it said, "no one is as smart as all of us", and variants thereof.

It's a helpful aphorism, particularly for small business owners who often feel they must find all their own solutions due to limited resources (lack of specialists, experts within the company; insufficient cash flow to use consultants).

Large companies clearly have an advantage in leveraging and profiting from important expertise and resources - as revealed by latest statistics showing large companies are streaking ahead of the small business sector in profits, cash on hand etc.1

But a recent program segment on ABC's Catalyst program underscores the importance of utilising the wisdom, and resources of crowds.

Excerpt of the transcript of "Follow the leader".:

"Dr Ashley Ward

What we’ve ultimately found is that although one leader found it very difficult to lead a group, two leaders could lead groups into doing almost anything. And part of the reason for that is what we call the quorum rule, which is where animals in groups won’t respond and copy a single individual doing something, but they will respond if they see a threshold number of individuals, a quorum of individuals doing something. It filters out bad decisions."

Filtering out bad decisions would be a useful tool for all business owners .. but what can small businesses do to 'filter out bad decisions'?

How can small-business owners leverage the techniques and resources of big companies that have crowds within their own ranks?

... read more

• 1. Research data confirming the growing profit-divide between large corporates and small businesses will be updated soon