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Improving organizational performance by utilizing the Wisdom of the Crowd principle and Social media

1 May 2015
Elad Piran

What is 'wisdom of the crowd'?

The wisdom of the crowd is defined as decisions/knowledge derived from the decisions/knowledge of a large crow which, under certain circumstances, can exceed that of an expert. This sentence, if read only few years ago, would be regarded by most as false. However, over the years we have witness this phenomenon recur successfully (e.g. Wikipedia) and therefore fully understand how such can occur.


What are Social Media tools?

Social Media tools are web services (internet/intranet) that enable the users to communicate with each other and share content. These are the building blocks of WEB 2.0 that fulfill the principles defined of connectivity by Tim O’reilly (for details- click HERE).


Utilizing performace using the Wisdom of the Crowd in Social Media tools

In this article, I will review several "field" examples, from different organizational fields, of the use of Wisdom of the Crows in Social Media tools in order to improve organizational performance. These examples are based on my own professional experience as well as on studied web publications.


Examples from the field of innovation

One of the fields in which organizations find dealing with Wisdom of the crowds is the field of innovation. In the past organizations managed a complaint box, which later became a suggestion box. Nowadays organizations promote designated processes in order to receive ideas from the organization's workers. For example:

  • Bank HaPoalim with their "I Care" project, which was a collection of ideas suggested by bank workers.

  • Elbit systems, on the lookout for new products and features.

  • Some organizations hold a "best new idea" contest between the workers. The workers suggest ideas and grade their colleagues' ideas.


Examples from the field of Knowledge & information Management

The field of KM is a classic field for utilizing the Wisdom of the Crowd method and Social media tools. For example:

  • One of the organizations to which I consult started a response mechanism through which the workers assist in updating their knowledge directory. The workers, by using the directory, present malfunctions and updates in real-time as well as requests for further information and elaboration by clicking on the "feedback" button" on each page of this directory. The editing team receives the feedbacks and updating content if required.


Examples from the field of sales and distribution

Organizations that deal with sales and distribution of products and services nowadays use methods that incorporate wisdom of the crowds. For example:

  • Companies such as Strauss and Osem advertise "specials" in which they request their crowd of consumers to pick a name for a new product, and even choose their favorite product from a list (for example: several flavors of a certain snack had been released to the market without titles on their packages. The users were requested to enter the company's website and choose their favorite flavor).

  • Starbucks is seeking cooperation with clients regarding dilemmas and business decisions.

  • TripAdvisor is just one example of a site that recommends trips.

  • Websites based on advertising and rating services and professionals.


To conclude: the more the organizations instill and use Social Media tools (WEB 2.0) the more they will enjoy the advantages of their workers' wisdom.


The skeptics will probably ponder "yes, but does it really work?" Well to them I say: yes. For example: Lior Tzoref (in collaboration with the Israeli Ministry of Science) conducted a survey on "Science Day 2014" and asked the masses how much salt they think is in the Dead Sea. The crowd's answer when compared to answers provided by professionals was astounding: the scientists answered 42.7 billion tons and the crowd answered 42.8 billion ton. Watch THIS video of the experiment and THIS video to view the results.


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