Once an organization decentralizes, localized decision-making restores diversity of opinion and offers the opportunity to tap into a wide body of knowledge. But there’s a problem: How do you aggregate that knowledge? Similar to the issues created by a competitive internal culture, the transfer of power away from the center toward the frontline employees often results in local knowledge not being shared throughout the organization. While the decentralized model has been extremely effective for developing local tactics, it has performed less well in the development of overall strategy.
…So how can we best harness the power of collective intelligence for our benefit? A decision market’s lack of an agenda makes it nearly perfect for gathering information and providing an impartial answer, but it also reveals its biggest weakness. Someone still needs to ask the questions.
…Managers who understand both the power and the limitations of group decision-making need not be threatened by its effectiveness. The aggregation and processing of tacit and tactical knowledge generated at the local level must still be brought together and formed into a strategic plan; the knowledge must be given an objective. For the manager seeking to exploit collective intelligence, this is his challenge.
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