Collective intelligence is a trendy concept for an old practice: using everyone's brainpower to solve a challenge. What has changed is the use of new communication technologies.
With the internet, a huge number of people across the world can now connect and work together. CFOs should use this force to their advantage.
Collective intelligence: people + technology
Professor Thomas Malone, founding director of the MIT Center for Collective Intelligence, has spent many years studying the intelligence of groups.
"We've found that there is a single statistical factor for a group that will predict how well that group will perform on a very wide range of very different tasks," he said in a publication by the Institute. "We call that factor 'collective intelligence'."
Think of the success of free online encyclopaedia, Wikipedia. Written by an army of volunteers, it has published millions of articles in nearly 300 different languages. Crowd-sourcing, a term first coined in 2005, has become a popular way to enlist a number of people through the internet to contribute to a project or find novel ways to solve a problem.
In 2013, Harvard Medical School turned to open innovation to solve a DNA sequencing algorithm, while tech giants Google and Facebook run in-house events like contests, skunk works or hackathons to get the best of their employees. This is, famously, how Facebook's "like" function was created.
At 3M, the American conglomerate's "bootlegging" policy encourages technical staff members to spend up to 15 percent of their time on their own projects. The result: big-hitters like post-it notes, scotch pop-up and multilayer optical film.
Harnessing collective intelligence
Undeniably, collective intelligence and its many offshoots (co-creation, innovation incubators, labs, open marketplaces) yield a lot of power, yet, away from Silicon Valley and start-ups, are businesses really making the most of the talent inside and outside their organisations?
The answer is a straight "no", according to Serge Dautrif, an expert in collective intelligence for large-scale industrial projects.
A trained engineer and former management consultant with decades of experience working on large industrial projects in energy and utilities, he has witnessed first-hand the problems that arise when firms do not use this efficiently.
"Quite often geographical, cultural or hierarchical obstacles create silos within organisations. Most projects fail because of the inability to harvest the full value of the collective intelligence surrounding the project," he says.
Failure to communicate: high-risk and expensive
Dautrif refers to a McKinsey study that reveals that 70 percent of projects of large-scale complex programmes do not reach their stated goals. A lack of accountability, employee disenchantment, inadequate management support and poor or non-existent cross-functional collaboration are cited as common pitfalls.
"When used properly, collective intelligence can enhance communication thus collaboration and help project teams reach their targets quicker," he says.
Dautrif refers to a collective intelligence project where thousands of individuals in a company had to answer questions simultaneously, and offering feedback and solutions in chat rooms, mapped out the skillset of a large multinational in only five days.
"This would have taken a management consultancy at least five months," he claims.
Beyond the obvious cost-saving benefits due to more efficient use of existing resources, Dautrif believes that CFOs that use collective intelligence will be able to better detect and use sources of value, which will, in turn, lead to an increase in revenue and a decrease in risks.
Using employees and collaborators' talent will also make them feel more valued by the organisation they work for, leading to increased staff morale and retention.
CFOs must work more closely with the HR department and use innovative ideas and technologies to connect people together and make them participate more in a project or the life of an enterprise.
In doing so, they will not only reap financial benefits but also contribute to a real change of culture within their organisation where collaboration, openness and engagement become the new paradigms.
© Oracle 2017
