Decisions 2.0

Decisions 2.0: The Power of Collective Intelligence
Eric Bonabeau
MIT Sloan Management Review, Winter 2009

First, thanks to the Internet and other information technologies, you now have access to more data about customers and employees than ever before. However, data is not enough; you still need to make good decisions.

To improve the quality of their decisions, many companies are now using Web 2.0 applications to tap into “the collective” on a greater scale than ever before. In fact, the increasing use of information markets, wikis, crowdsourcing, social networks, collaborative software, and other Web-based tools constitutes a paradigm shift in the way that companies make decisions. Call it the emerging era of “Decisions 2.0.”

What’s still needed, though, is a framework for understanding what type of collective intelligence is possible, desirable, and affordable. In “Decisions 2.0: The Power of Collective Intelligence,” from Sloan Management Review,Eric Bonabeau provides that framework to help companies assess how they might use Decisions 2.0 applications to solve problems and make better decisions.

Bonabeau is the CEO and chief scientific officer of Icosystem Corp., a consultancy that specializes in the use of complexity science to develop innovative business strategies.

As Bonabeau explains, solving a problem entails two tasks:

Generating solutions

Evaluating those alternatives

To achieve these tasks more effectively, many companies have begun to tap into collective intelligence through the use of Web 2.0 and other technologies.

Some of the applications concentrate on solution generation. Take, for example, InnoCentive, a Web site through which companies can post a problem and solicit solutions, with the winning entry receiving a cash prize.

Other applications focus on the evaluation task. HSX, for instance, is a mock market in which users buy and sell futures for current movies, and the results are an indicator of the money-making potential of those releases.

Still other applications address both generation and evaluation. The Digg Web site asks participants both to contribute stories and to vote on them, and the most popular entries are posted on the home page.

Whether the goal is solution generation, evaluation, or both, companies should consider three general approaches:

Outreach

Additive aggregation

Self-organization

The value of outreach is in numbers: broadening the number of individuals who are generating or evaluating solutions....