Collective intelligence – how you benefit from the crowd

Helping companies produce successful brands with open innovation

What do crowdsourcing, crowdfunding and crowdmining have in common? The collective intelligence of the community creates new value through social collaboration. How does open innovation work?

Internet technology gives us new freedoms and business models. We work and consume independent of location. We search for customised information and communication in blogs, forums and portals, regardless of the time of day or national borders. Digital platforms and crytocurrencies are transforming services and money flows. They and creating new forms of participation for previously marginalized segments of the population. All this is part of a revolutionary change: customers have transformed from passive, static observers to engaged and agile prosumers who shape the digital architecture by themselves.

Collective intelligence: competition of the best opinions

The term collective intelligence is often used synonymously with group or swarm intelligence. Groups of individuals perform cognitive actions that are intelligent in a universally distributed manner or as a cohesive organism. It has been shown that groups decide more wisely than individuals on certain decisions. However, the group must not be too large, which in turn becomes counterproductive. In fact, according to studies, medium-sized groups achieve the best results. Collective intelligence exceeds individual intelligence and is not just the sum of the performance of individual agents. Something is added on top. What is that something? 

Coordinated swarm behavior begins when actions of members of a group occur interdependently, for example, when they buy and sell something to each other. In this process, the “invisible hand” of the market (Smith) brings about allocation with amazing efficiency. This happens because individual members of a group behave in a way to achieve a commonly defined goal. Another example is decision-making in orderly procedures (e.g., in democratic elections).

As an organizational system, the “crowd” is distinct from the classical hierarchy. Instead of having their tasks assigned by a higher authority, individuals in the crowd perform tasks voluntarily. This requires certain intrinsic motivations that cause people to take on a task. Motivations can be the prospect of money, social reputation, fame, influence, or affection. Collective intelligence can lead to different outcomes, which can be divided into “deciding” and “creating”: in the first, an outcome is selected from alternatives; in the second, something new is created. How is this outcome achieved?

Media narratives strengthen community engagement

Collective intelligence or swarm intelligence is pragmatic and solution-oriented. It is fundamentally different from a forward-looking, planning approach that relies on an overall theoretical model. Instead, individuals generate synergistic effects among themselves that produce so-called emergence: new knowledge that is first created from the relationship and interaction. The will of the community functions as a node that holds together the interwoven threads of collective participation.

In this process, the members of the group need not share the same characteristics or attitudes. The best collective decisions are not reached through consensus building and compromise, but through a competition of different independent opinions. Nevertheless, some culture matching is necessary. Common ground is often achieved through media narratives that generate solidarity and commitment in the bazaar community.

The “wisdom of crowds” (Surowiecki) experiences a potentiation through the Internet thanks to the networking possibilities of modern technology. Many different people interact en masse on Internet platforms in real time not only with each other but also with machines. Information dissemination no longer takes place top-down through authorities, but through network dynamics. Target groups become more permeable, potentials for new media formats and new forms of division of labor emerge. In the process, private-sector information mediators compete with nation-state supervisory bodies for the public’s interpretive sovereignty.

The best image convinces, not truth

Despite great potential, however, swarm intelligence is not robust or crisis-proof. The algorithmically controlled blurring of overlapping communication and sales spaces favors surveillance, hidden lobby propaganda and digital nudging. The loss of control that crowd models bring introduces new problematics. Accountability and responsibility, for example, usually remain unclear, especially in the case of negative outcomes.

Collective intelligence is susceptible to hypes and can miss important facts and go astray if there is a lack of diversity – the best example being stock market crashes due to bubbles. Collective intelligence can likewise be infected and manipulated on purpose, for example, to distract from the failures or misbehavior of political elites – examples include conspiracy narratives such as the stab-in-the-back legend, which cleverly pinned the blatant guilt of the German leadership in World War 1 on the socialist revolt. 

Basically, it can be said that the most popular opinions are not necessarily the ones that contain the most truth. It is media appeal, a credible image and the ability to best serve the identity of the community emotionally that are most convincing.

Mass journalism is out, target group content from brands is in

The influence of mass media is declining. Social media subpublics, blogospheres and information media that algorithmically sort and filter the masses of content determine our perception of the world. The modern consumer is no longer a passive spectator, but an active prosumer who creates and publishes media himself. Alongside the mass media, it is therefore engaged citizens, influencers and brands that are taking over the function of traditional journalism, while economic constraints are inevitably turning traditional journalism more and more into populist marketing.

Users are orienting themselves less and less to editorial content from trusted media houses and increasingly to the viewpoints of well-known influencers. People are most likely to trust influencers who share the same context. Influencers arouse curiosity, inspire and polarize. They find trending topics and illuminate them from the perspective of their audience. How can brands learn from them?

“Brands become media. This is in their genes, as brands produce nothing but content.” (Andrey Mir: Postjournalism and the Death of Newspapers)

Brands compete for good and unique content out of economic interest, as this is how they generate audience reach. But social media marketing is all about user engagement. It doesn’t help if a company page on social media channels has thousands of views if no one is talking about it. Companies need to get the public to discuss their issues and viewpoints.

Open innovation: product development for and by the prosumers

The better the content, the more likely it is to be shared. Whereas in the past strict overall control over the communication strategy was desirable, today it is the self-reinforcing, dynamic sharing by the organic community that promises success. This is because the large, opaque mass of prosumers who circulate the existing content through likes and shares is the actual evaluating authority that decides what goes down and what gets promoted.

Open Innovation relies on original creativity, transparent error culture and the primary responsibility to quality. The best example of successful Open Innovation through collective intelligence is Wikipedia. In the media and entertainment industry, software developers and game designers set an example: the feedback and innovation potential of the community is part of the continuous development of the product. In company forums, customers exchange information about the product and best practices and suggest improvements. 

The advantages for open innovation are also obvious for other industries: valuable knowledge is gained without expensive market research. Future product developments can be better adapted to the actual needs of customers.

Tips for companies: Become an influencer yourself

  • Identify influencers

Find out which users are shaping opinion in your core community.

  • Analyse trends that influencers follow

Examine influencers’ posts for recurring leitmotifs.

  • Position yourself as an expert

Find an informed point of view for yourself on a selected topic.

  • Authentic perspective instead of brain washing

Don’t trick. Write with authenticity and dedication to what you are presenting.

  • Convert influencers to followers

Take comments seriously and engage in respectful dialogue on equal terms.

Simone Belko is a media scientist and European studies scholar with a strong focus on digital literacy. With experience in journalism, PR, marketing, IT and training she has excelled in Germany and abroad. As a manager for digital products in the online games and FinTech industry she gained deep insights into online platforms and communities. Simone is the author of "Digital Consciousness" ("Das digitale Bewusstsein") and currently works at Otto GmbH, leveraging her expertise in business transformation.

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