The Wisdom of Crowds. Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations, by James Surowiecki.
This book was published about 20 years ago, in the aftermath and consolidation following the “dot com” crash when the cauldron of investment mania had cooled, and the real business value of internet exploitation accelerated . . . .
And they say that “history rhymes” . . . 😉
The book focuses on the thesis that a diverse collection of independently thinking individuals is likely to make certain types of decisions and predictions better than individual experts.
It is based on the findings of Francis Galton, a psychologist in the very early 20th century, who observed that the crowd at a county fair accurately guessed the weight of an ox when the average of their individual guesses was taken. This “wisdom of the crowd” was far closer to the ox’s true weight than the estimates of the individual crowd members.
Of course, we can all see the “ignorance of crowds” in many day-to-day situations, so maybe it’s a zero sum game 😉
But the book is worth a read.
I am going to attempt my own experiment of the “wisdom of the crowd” next week, with a panel session on “The Future of GBS” at Credit Matters XIV (14th edition, no less!), a great gathering of Credit & Order to Cash (O2C) professionals in Budapest.
I will be probing the views, experiences and forecasts of the future of GBS with a small “crowd” of independently thinking individuals / experts on the panel;
- Milan Benes – Vice President Shared Services – Curium Pharma
- James Nelson – Head of Finance Shared Services & General Manager – Computacenter
- Zaneta Hlinkova – Sr. Credit Services Manager & MDT Business Services Site Lead – Medtronic
- Andras Kohl – Head of Finance Business Services, CE – Tesco & Board Member ABSL Hungary
The panel will consider these questions;
- What is the business rationale for Global Business Services in your company?
- Has GBS delivered on the promise? Honestly . . . .
- Cost was the original business case for hub/centre selection, but has available technology talent superseded it?
- Does the “promise” of AI and Agents to automate and orchestrate processes in new ways, with minimal human intervention, signal the end of GBS?
- Does the “purpose” of GBS need to change, to “move up the value chain” to deliver enterprise customer, P&L and Working Capital impact?
- Will GBS still be here in 10 years?
Whilst “the reports of the death of GBS are greatly exaggerated” (to paraphrase Mark Twain 😉), it is true that this operating model has a life cycle similar to the sine wave, with peaks and troughs of popularity in every business.
After the initial euphoria of the cost efficiency gains associated with large scale offshoring and outsourcing dissipates, it is notoriously difficult to sustain annual cost efficiency gains in GBS. As a result, operating companies, markets and functions often push for “repatriation” of GBS services for reasons of greater accountability and control. Each year, you can see 5 or 6 big names take this route, just as a new wave of GBS enthusiasm builds for other enterprises.
Darwinian evolution . . .
The quick wins can create a motivating “sugar rush” but sustaining enterprise value creation for the long haul is the true challenge.
You can learn more about the Credit Matters XIV conference May 13-15 in Budapest here . . .
You can read the recent article “Exposing the hidden blind spots of enterprise value” here . . .
The Wisdom of Crowds. The Future of GBS.
Thanks for reading . . .