Crowdsourcing, Groupthink, and the Wisdom of Crowds

Jonathan Healey asked an interesting question following my recent lecture on crowdsourcing.  He wondered at the difference and relationship between these similar concepts such as crowdsourcing, groupthink, and the wisdom of crowds.  I asked for his permission to post my response here.  My response is was as follows:

First, it should be noted that crowdsourcing, wisdom of crowds, and groupthink were developed completely independently from one another.  Any attempt to bring them together into a single, coherent understanding is being done after the fact (by me).  So, the end result might not be as clean as either of us would like.

• Crowdsourcing refers to a business process that involves turning some portion of one’s business to a “crowd” of people.  Here, I’d define crowd as a group of people for whom this business process is not an official part of their job.  So, Best Buy crowdsources internally through prediction markets.  P&G crowdsourced externally, to non-employees.
• The “wisdom of crowds” describes the conditions under which groups make consistently better decisions than any individual in the group (and group think the conditions under which group make consistently worse decisions than individual in the group.)
• Groupthink describes the conditions under which groups make consistently worse decisions than the individuals who comprise that group.

So, crowdsourcing is a process.  The wisdom of crowds are the conditions you want to have when crowdsourcing.