The Wisdom of Crowds and Collective Intelligence are very useful concepts but not if they are used in the wrong places. Confusing these two concepts will only produce bad results for your groups and teams.
Let me try and clarify….
The Wisdom of Crowds, as popularised by the book of the same name, is about applying the intelligence of a group to a certain kind of problem where majority rule or averaging is appropriate.
For example, ask the audience in a TV quiz show or estimating the effort in building a software product (using, for example, the excellent Delphi Technique).
I would call this Averaging Group Intelligence rather than Collective Intelligence as you take into account multiple inputs in your calculation to attempt to find the best answer (the average or most popular).
Collective Intelligence, Group Intelligence or Team Intelligence is about finding the best answer a group can give to a problem based on identifying the member in the group who should know best.
I accept that this is a simplified definition of “Collective Intelligence” as it can also be used in the sense of “Swarm Intelligence” to explain mass behaviour of agents such as ants and bees where an intelligence beyond the individual components emerges. We are not talking about that here.
For example to devise the best sales strategy you should find and ask the person or persons who are best at sales strategy.
If there is more than one contender for expertise then you might consider asking the group which one they favour – a good Wisdom of Crowds question!
However you definitely should not ask each group member and then try to find some kind of middle ground or lowest common denominator which accomodates in some way bits of all their responses.
Collective Intelligence is Exclusive Group Intelligence – finding and picking the best intelligence in the group for a specific question.
Groupthink is Collective Intelligence gone wrong.
So in my mind the Wisdom of Crowds and Collective Intelligence are totally different and easily distinguished techniques.
In the Wisdom of Crowds you usually make a calculation whereas in Group Intelligence you usually make a choice.
Each is appropriate to certain kinds of situations – but if you use the wrong one for the wrong situation you will get a bad result.
Hence the title of this post: (avoiding) the madness of crowds and collective stupidity