Who knows more about risk?

The Wisdom of the CrowdsIn important matters of uncertainty involving predictions we need to hear from a diverse group of people that have different perspectives, and perhaps a stake in the decision that causes them to think before offering their views.

Collectively, the diverse group is smarter than individuals. This is the core message of The Wisdom of the Crowds by James Surowiecki.

Surowiecki provides a framework with examples of when and how the knowledge of the crowd can impact decisions positively.

This idea applies well to regulation. Why? Because regulators are generally a step or two removed from the uncertainties they need to know about. First-hand knowledge about these risks reside with the regulated parties.

As well, the sources of uncertainty in most jurisdictions are dispersed and mostly invisible until they are brought to the attention of the regulator. The collective knowledge of constituents (regulatees and individuals who are affected by what regulatees do) is far greater than the regulator. Effective new methods for capturing this knowledge will improve regulatory oversight.

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A drawing worth a thousand words

Take just ten minutes and read Drawings that will change your life by Ralph Perrine. This articulate, beautifully presented manual presents four drawings designed to help planning and collaboration with certain types of problems.

  • For establishing balance in relation to important decisions;
  • For identifying opportunities that you might miss because you’re overly focused;
  • For checking your progress and evaluating your plans for meeting an important objective;
  • For planning a path toward excellence, deciding who to emulate, and who to collaborate with, etc.

360 Degree Awareness

These drawings can help structure a discussion. More specifically, these are tools that fit well with the ‘communication and consultation’ elements of the risk management process.

Drawings that will change your life is just one of many “manifestos” that are distributed through a website called ChangeThis. The site is dedicated to distributing important ideas that can change the world. Idealistic? Yes, but regulation in the context of democratic principles is also a big idea that has and continues to change the world.