I have been listeing to the audiobook version of J. Surowiecki’s ‘The Wisdom of Crowds’. Its a really intetresting book that looks at the way group decision making and decentralised organisations can produce results better and more intelligently that the members of those groups individually. Its a look at the modern penchant for decentralising everything and asks, in a round about fashion, whether or not people can work effectively in groups and if so, how to use that ability wisely.
Surowiecki (pronounced surwikky) gives lots of examples of good and bad uses of groups of people. Good examples include Linux, the open-source computer operating system created by submission from its users; Google and its search results gleaned from the collective clicking of all its users; and oddly, Zara the Spanish clothing shop chain. Bad examples include the team at NASA responsible for dealing the aftermath of the Columbia distaster and TV ratings system in America.
Its a really good book, well laid out and if you’re into your non-ficiton its lovely to read something outside of the normal Popular Science genre. Best of all for me though, and the reason that I am writing about this on Orbiting Frog, is that it discusses science and scietists as a group gathering collective knowledge and how we are a great example of open source people in action. It also enlightened me as to how clever the Zara clothing chain is, and having a good friend that used to work there I found this of interest. Its also funny that science and Zara have so much in common.
Science is obviously ‘open source’ if you’re inside it. Information is freely made available to all other community members and everyone is contributing to the common good. Those ideas that are accepted, become ‘knowledge’ and are thus used more by others to continue on and find more knowledge.
Suroweicki uses the SARS outbreak as a good example of an organised international scientific endeavour and points out that no one person disocvered the nature of the SARS virus, it was the results of collaboration between many labs all over the world who met regular via the internet and phone to exchange the latest results. Interesting the WHO’s SARS teams were not the WHO’s at all, really. They were simply approached by the WHO and asked to join and fter that the teams were left to organise themselves in many ways. Each team specialise naturally according its strengths and they all exchanged data on different viruses and samples. There was no design to the way the teams worked, many labs could work on duplicate viruses and in fact many did. But despite what seems to be an obstacle to their success, namely, their apparent disorganisation, the labs discovered the cause of SARS in the fastest time any disease has been uncovered – ever.
How did they do this? Well greater control was given to each level of the hierarchy and less structure was placed between the teams. The teams were each able to go where the results lead them without having to rigorously pursue a list of prescribed avenues of investigation. In economical terms they were lead by the market. In the SARS case, the market is the flow of information and profitable results are ones that lead to identifying SARS.
Curiously it seems that comanies like Nike are not lead by the market very tightly and could do with learning a lesson from the way science works. Nike outsources all its manufacture in huge, bulk orders. This means that Nike has to guess what items will be popular in advance and order large volumes of stock months before it will ever go on sale. What this means is that they end up throwing away huge amounts of their products or selling them at a reduced price. This is where Zara comes in and wows me.
Most Zara stores (there are 600 worldwide) get stock in twice a week. They only carry around a months worth of any item compared to 3 months for most other stores. Zara’s average product lifetime is a week and the time from design to shop floor is a mere fifteen days. Despite this, Zara still manufacures everything itself, in Spain. The only created around 300 line sof clothing at any point, compared to the 20,000 designed by most other stores. How do they do this? Well every Zara manger is always reporting back, in real time (more or less) to the HQ in Spain. Within days, Zara knows if a product is selling and because it produces its own stock in just runs of a few hundred (compared to tens of thousands by Nike) it can simply stop making those items that don’t sell or increase production on those that do. Within days the shop floor will relfect these changes.
In some ways Zara is more like Google than it is like Top Shop. Zara wastes very little, virtually nothing compared to Nike, and yet still competes with those companies on the high street. Because Zara can go from design to store so quickly it rapidly reflects the wants of the public and so there will rarely be many items on sale and certainly very few thrown into piles to be sold at discount outlets.
Zara treats clothes the same way science treats knowledge. Both go with the flow in each case and those things deemed not worth persuing are left by the wayside, in real time.
‘The Wisdom of Crowds’ can found on Amazon, Audible and many others. Check it out.