Using the Wisdom of the Crowds at the Corporate Level

http://www.guardian.co.uk/business/2008/may/25/1

Like the stock market's ability to determine who was to blame for Challenger disaster, this author suggests that wisdom of the crowds could be used at a corporate level to make investment decisions. Average employees outperformed the experts, so why not use the wisdom of the crowds as another source of data in investment decisions?

"Take, for example, the experience of giant US electrical retailer Best Buy, which has just bought half of the retail business of our own Carphone Warehouse. Unhappy with the way its sales forecasts were working out, Best Buy ran experiments inviting a broad range of employee volunteers, armed with a bare minimum of historical and current information, to estimate future sales performance. In each case, the crowd was around 99 per cent accurate, substantially better than the supposed 'experts' - the sales teams that traditionally compiled the figures."

"The wisdom of crowds...could help avert corporate disasters and smooth the path of big changes. If the crowd had been consulted on the likely outcome, would Northern Rock [a struggling British Bank] have relied on the money markets so long, or the investment banks have pushed securitisation of sub-prime mortgages to such elaborate extremes?"