Wisdom of Crowds in Product Management – The concept of the “Wisdom of Crowds” has become increasingly popular in recent years across many industries, including product management. The basic premise is that large, diverse groups of people can often make better decisions and predictions than individual experts when certain conditions are met.
In product development, tapping into the collective insights of customers, employees, partners, and other stakeholders can lead to more innovative and successful products. As a product manager, understanding how to leverage the wisdom of these “crowds” can give you a significant competitive advantage.
In this blog post, we’ll dive into what exactly the Wisdom of Crowds is, how it applies specifically to product management and actionable tips for harnessing it in your own organization. Read on to learn how you can unlock the power of crowdsourcing to build better products.
Understanding the Wisdom of Crowds
The Wisdom of Crowds is the idea that large groups of diverse people can collectively reach decisions and make predictions that are often more accurate and insightful than those made by any single member of the group.
The concept was popularized by journalist James Surowiecki in his 2005 book “The Wisdom of Crowds.” He demonstrated through various examples how groups ranging from small teams to entire markets consistently arrive at intelligent decisions when certain conditions are met.
Some early examples that illustrated this phenomenon include British scientist Francis Galton’s 1907 experiment at a county fair. Around 800 people guessed the weight of an ox, and their collective average guess was more accurate than estimates from individual cattle experts. Another classic example is prediction markets, where groups predict future events more reliably than expert individuals.
The key principles that enable wise crowds are diversity of opinion, independence of members, and a suitable mechanism to aggregate opinions. When these conditions are fulfilled, groups exhibit what has been called a “collective intelligence” that surpasses individual judgments. Companies today use these principles to gather collective insights from customers, employees, and stakeholders to aid product development and positioning.
The Science Behind Wisdom of Crowds
The effectiveness of the Wisdom of Crowds stems from several psychological and behavioral tendencies.
One is that people draw from diverse sets of information and perspectives. With a large enough group size and diversity, the errors people make tend to cancel out while correct information is reinforced.
The independence of opinions is also key. Groupthink can skew results, so individuals should not influence each other’s opinions during the assessment process. Anonymity and control of feedback are two ways to maintain independence.
Other important factors include motivation and decentralization. People must be driven to perform well, not just fall in line. Aggregating submissions from many smaller sub-groups rather than a single large group can improve results.
Overall, the Wisdom of Crowds relies on aggregating diverse and independent signals from many sources. It combines collective insights rather than consensus and allows the “correct” solutions to emerge from the outliers.
Implementing the Wisdom of Crowds in Product Management
Here are some tips for harnessing the Wisdom of Crowds in product management:
Step 1: Gather a Diverse Crowd
- Recruit participants with a wide variety of backgrounds, expertise, demographics, etc. to minimize correlated biases.
- Leverage existing diverse groups like users, partners, and frontline employees.
- Supplement with carefully selected outside participants.
- Use digital crowdsourcing platforms to access a large, global pool of inputs.
Step 2: Ensure Independence
- Anonymous surveys and submissions prevent groupthink.
- Control feedback and limit interactions during the input-gathering stage.
- Encourage people to draw from their own expertise rather than looking to others.
Step 3: Aggregate and Analyze Data
- Use both quantitative data and qualitative insights from the crowd.
- Look for trends and outliers and the reasoning behind them.
- Leverage AI and machine learning to process large volumes of data.
Step 4: Make Informed Product Decisions
- Treat crowd wisdom as input, not a final verdict.
- Have a clear framework for integrating insights with company goals and constraints.
- Iterate based on empirical validation of ideas.
- Continuously gather new perspectives as the product and market evolve.
Examples of Wisdom of Crowds in Product Management
Threadless
- An online t-shirt company that relies on the crowd to design and select products.
- Customers submit t-shirt designs, and the community votes on their favorites.
- Winning designs are produced and sold on the site. This crowd-based model has created an enviable hit rate.
- Regular surveys of users help guide product direction and feature improvements.
- For example, feedback revealed confusing privacy controls, leading Facebook to streamline settings.
- Facebook also has people rate feed relevance to improve algorithms. This collective input keeps the platform engaging.
Netflix
- Uses ratings and viewing data from its over 200 million subscribers to refine its recommendation engine and predict which content users will enjoy.
- This aggregate data helps Netflix optimize decisions around content production and acquisition.
- Personalized recommendations based on collective insights lead to better user engagement and retention.
LEGO
- LEGO Ideas platform allows fans to submit original LEGO set ideas and have the community vote on which gets produced.
- Top crowd-sourced designs that get 10,000 votes go into official review by LEGO. Successful ones get made into real LEGO sets.
- This taps into the creativity and preferences of their highly engaged user base.
Nestle
- When developing a new KitKat flavor for Japan, Nestle created an online community of over 1,000 KitKat fans to submit and discuss flavor ideas.
- The crowd-sourced forum provided valuable insights into consumer preferences that informed the new flavor’s development.
- The “KitKat Chocolatory” service was a hit with consumers when launched.
Challenges and Pitfalls
While the Wisdom of Crowds can yield valuable insights, there are some potential drawbacks to be aware of:
- The crowd is not always wiser. Garnering opinions from an inadequately diverse pool can amplify biases rather than attenuate them.
- Strong personalities or groupthink dynamics can corrupt the independence of inputs. Anonymity and decentralization are key safeguards.
- Amateurs sometimes lack the knowledge to provide sound opinions on complex topics. Their judgments should not override experts’.
- Aggregation can be challenging with qualitative data. Look for emergent themes but also pay attention to outlier voices.
- Wisdom of the crowd is probabilistic. The group conclusion may not always be right, just more likely to be right. Validation is still required.
- Crowds can be unwieldy and difficult to engage. Clear guidelines, motivation and the right digital platforms are important.
With proper oversight and an understanding of these limitations, product teams can maximize the benefits while minimizing the risks of harnessing the wisdom of crowds.
Conclusion: Wisdom of Crowds in Product Management
The Wisdom of Crowds is a powerful concept that Product Managers can leverage to improve decision making and build great products. By aggregating insights from diverse groups of customers, employees, partners, and more, you can tap into the collective wisdom that often surpasses individual opinions.
However, to benefit from the Wisdom of Crowds in product management, it is essential to ensure diversity and independence in your inputs. You also need effective mechanisms to gather and analyze crowd data. With the right approach, you gain an invaluable perspective on product validation, feature prioritization, market conditions, and more that is backed by the combined knowledge of the crowd.
While not a silver bullet, applying Wisdom of Crowds principles can provide a significant competitive edge in building products that resonate. The collective insights allow product teams to de-risk decisions, identify overlooked opportunities, and understand the minds of their users. Harnessing these crowdsourced contributions can lead to improved innovation, customer satisfaction, and business outcomes.
The key is integrating crowd wisdom thoughtfully within your existing product development workflows. Follow the steps outlined above to start unlocking the power of diverse crowds. You’ll be amazed at the results.
