CEOs: Beware Of “The Wisdom Of Crowds”
Such decision-making bias can have devastating consequences
Public advocates, investigative journalists and government officials all routinely call out leaders for deceit or incompetence. Sometimes they get it wrong, yet their false narratives are quickly embraced and propagated by the masses.
Thus, virtually every CEO must now be ready to correct misconceptions that, once aired, take on lives of their own, thanks to the presumed “wisdom of crowds,” wrongly celebrated by herds of cynical journalists, market worshipping economists, social network sociologists and cognitive psychologists.
Journalist James Surowiecki’s 2004 bestseller, The Wisdom of Crowds, lauded the collective instincts of groups. But public opinion often suffers from the same decision-making flaw that frequently leads to misdiagnoses in the medical field: “premature closure,” or a failure to consider reasonable alternatives once an initial conclusion is posited. Summed up by the adage, “When the diagnosis is made, the thinking stops,” such decision-making bias can have devastating consequences.
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