Why Nobody Is Smarter Than Everybody

Collective intelligence and peer-to-peer networks may be the most underrated forces in today's business landscape.

Claiming a shift as revolutionary and impactful as Einstein's Theory of Relativity is a bold claim. However, I'm confident that if you listen to this full interview, you'll come away believing it's possible.

That's my conclusion after a compelling hour-long interview with Rod Collins, author of Nobody Is Smarter Than Everybody.

Rod Collins is blazing a trail with insights that challenge conventional wisdom. His work sheds light on why embracing these underexploited strategies—collective intelligence and peer-to-peer networks—is not just innovative but essential for navigating the complexities of the digital age.

Join us to discover why these concepts are key to unlocking unprecedented innovation, agility, and collaboration within organizations. This isn't just another interview; it's a gateway to understanding the future of work and leadership.

Don't miss this eye-opening conversation. It's time to explore the significant, transformative potential Rod Collins is passionate about bringing to the forefront of business strategy.

Here are just a few of the fascinating things you'll learn in this interview:

The four conditions that are absolutely required for collective intelligence.
The fascinating, pivotal insight Rod had in college that led to his discovery of collective intelligence.
The role of leadership in evolving self-managed peer-to-peer networks and the most critical skills for leaders in this new paradigm.
The future of organizational structure and leadership over the next decade.
The fascinating top takeaway you need to consider, and much more.

The interview is available in audio format for replay below:

Rod is an author, speaker, and leadership coach. Learn more about Rod at rodcollins.net or connect with him on LinkedIn.

I hope you will listen to this interview and discover the exciting future that awaits us.

To your forward-thinking life & great success!

— Bill

Bill Fox
Connect with me: LinkedIn | billfox.co
Pioneering Leadership from Within | Unlocking Human & Organizational Potential

Transcript

Q1: You wrote a book with a fascinating title, Nobody Is Smarter than Everybody. What's the book about?

Rod: Well, the title is Nobody is Smarter Than Everybody. And the book is about what I believe is the least appreciated, most important aspect of intelligence. And that is our collective intelligence. And this is an asset that very few organizations in particular use. And yet it is their highest form of intelligence. The book focuses on three companies as examples who have designed themselves not as typical top-down hierarchies, which most organizations are, but rather as peer-to-peer networks. And in so doing, they make themselves more intelligent organizations.

And they also make themselves more powerful organizations, but they exhibit power in a very different way than we usually see. And so our audience can get an understanding of the difference between the top-down hierarchy and the peer-to-peer network. I'd like to point out that every form of social organization has a design principle and has to answer two questions. The two questions are who decides and how does power work? Now, in the case of the top-down hierarchy, which most of our audience is familiar with, the basic design principle is trust authority. And accordingly, who decides? The elite people at the top, the supposedly smartest individuals make the decision for the whole organization. And the theory behind that is if the brightest make the decisions, the organization will be more intelligent than if we let people to their own devices. How does power work? In the command and control structure, power is a function of force. Those who have authority, the bosses, legitimately can command people to do what they otherwise might not choose to do, or they may get fired. And so this force is very real. And again, our audience, I'm sure is familiar with that.

The peer-to-peer network has a very different design principle and it answers those two questions very differently. Its design principle is nobody is smarter than everybody. So accordingly, who decides? Everyone decides. Specifically, teams decide. And so work is not structured in departments like happens in hierarchies. It's structured in cross-functional teams. And those teams have the ability to decide their own decision rights. The team could decide that one individual will make the decision because that individual may have unique knowledge.

But the point is the team makes that decision rather than that being ascribed to the individual. The team can also take that authority away if it feels that person is abusing it. But more often than not, rather than single individuals making decisions, the team, and that's why I use the term decision rights, the team will decide how the decision will be made. So for example, they may say on this one, we need an anonymous agreement among all 10 to 12 of us. Or another instance, they may decide we just need a majority opinion and the sense that we're not making a fatal error on the part of those who may not be in the majority.

The other question, how does power work is where peer-to-peer networks are really markedly different from hierarchies and why they're more powerful organizations. And power is not a function of force. It's a function of a very different dimension and that is energy. And so rather than coercive power over, you have synergistic power with. And so power is something that is done in collaboration and in conjunction with others. And when that is the case, in networks there are no powerless individuals whereas in hierarchies there are. Those who have authority are powerful and two-thirds of the people who don't are not.

And it's probably not a coincidence that two-thirds of people are not engaged in their work. When you feel powerless your engagement is not going to be high.

In the peer-to-peer network, because everyone participates in power, because power is not a function of force, but a function of energy, it creates a more powerful organization because everyone is participating in the growth of the power within the organization. And one of the chapters I have in the book focuses on this synergistic power and it's titled "When Power Does Not Corrupt". And power is not inherently corruptive.

I would amend Lord Ashton's, I believe it's Ashton's comment that power corrupts absolute power, corrupts absolutely. It's coercive power corrupts and absolute coercive power corrupts absolutely. But synergistic power is inherently non-corruptive. And so these are some of the fundamental differences between these two organizations, all types of organizations. And again, I give examples of three companies who have operated like this since they started as startups and each of them today is a market leader.

Bill: Yeah, as I read through your book again, got re-familiarized with your work, Rod, I kept thinking, this is so powerful, so obvious, it should be taking the business world by storm.

Rod: I guess people resist that kind of change. They don't want to give up their power, the politics and the sense of privilege. There are a lot of barriers, I guess, but eventually it'll win out, I'm sure. But it's what seems to be happening and I wish the companies would evolve. That would be my preference. Fear, this change is going to happen. It's going to be messy. It's going to happen, I think, at multiple levels.

I focus on business organizations in this book, but I believe that this, this tussle between these two forms of organization is actually going to play out now, larger society. And I would postulate it's playing out now. And we are watching the top down hierarchy desperately trying to assert itself in the context of the new digital technologies. And I think over the next two decades, this will be the existential crisis facing humanity. And that is how do we organize ourselves? Do we do it as top down hierarchies or do we do it in the context of peer-to-peer networks?

And we're in a different age. We're not in the industrial age anymore. We're in the digital age and digital technology, I think has really amped up the consequences of this choice because what digital technology allows for the first time is the creation of a system that will know everything about everyone in every moment. And we've never had that before. So in the industrial age and the agrarian age, I mean, the top down hierarchy really goes back to the Roman empire. It was the reason they were able to build an empire is they cracked the challenge of how do you organize large numbers of people in an effective way? And the Romans were able to conquer the world at the time because they, they solved that problem with the top down hierarchy.

When organizations come along in the industrial age, they more or less borrow the model that the Romans had come up with. Frederick Taylor comes along and gives it a fancy name, scientific management, but it was nothing new. It's what the Romans did. And after the Romans, the Catholic church, which was a dominant institution in Europe, in the middle ages also used that model. Organizations have picked it up. It's the only model most of us have known. However, because you couldn't have absolute power, because you couldn't control every single moment of everyone's lives, there has been enough freedom within people's lives in varying degrees since the Roman empire, where people could organize themselves in ways that are out of sight of the government. We're looking at possibilities now where governments will probably want to replace fiat currency with digital currency. And one of the consequences of that is they can really control your freedom by controlling whether or not you have access to your own, to your own dollars. And people can see this coming along.

On the other hand, we do see, I think, a window of hope, and I'm going to come back to this point of evolution in a moment. With the creation of Bitcoin, Satoshi Nakamoto has created an incredible, incredible innovation, which I think is greatly underappreciated. We're focused on Bitcoin as an alternative currency because we're living in an age of inflation.But the real innovation in Satoshi Nakamoto's invention is the blockchain, because the blockchain is something that a central authority has no access to the way he's designed. And I often say that Satoshi Nakamoto was wise to remain anonymous, because I think when the full consequences of this invention are understood, those who control top-down hierarchical structures, especially in the government sphere, would probably want to either jail or kill this person. Because what he or she has created is the biggest threat to central authority. However, it has given us a tool whereby a system can know everything about everyone except their identity.

And so the import for this, for the world going forward, this peer-to-peer network, is this is knowing everything about everyone is great, because think of the research that we can do and the speeds at which we might be able to do it. That would help humanity. But it wouldn't know the particulars of individuals. I think as blockchain develops, people will own their own identity. People will own their data, not organizations. And the real freedom is the ability to own your data, to own your identity, and to own your own assets. And so this is why I think the existential crisis that the digital revolution will bring along will be this tussle between how do we organize the digital world as a top-down hierarchy of peer-to-peer network.

Now let's come back to corporations and the question that you had asked. And I mentioned, I think we're going to see it happen by displacement. And why is that? Because those who have coercive power prefer the status quo. And those who have coercive power and the ability to shut off diversity of opinion, which I think right now is very troubling in the larger society we find ourselves in. When they do that, they amplify their blind spots. And this is the real Achilles heel of top-down hierarchies. When individuals have the ability to coercive authority and can shut off the diversity of opinion of other people, they are amplifying their unconscious biases. And that can kill a company. They are also slowing down their capacity to uncover unknown unknowns, which is another blind spot. Networks are very good at correcting for both of these two blind spots. Because it leverages collective intelligence instead of individual intelligence, all opinions can be challenged. And it happens in a way where it is constructive. Because if somebody realizes, oh, what I thought isn't quite correct and I understand why, you just get on board with the team and you move on. That unconscious bias doesn't cripple you.

And the other thing is when you leverage collective intelligence and people build on each other's ideas, you have the experience, which I'm sure our audience can relate to, and I'm sure they wish they had it more often, that by working together, all of us created something greater than any one of us could have done by ourselves. And why did they do that? Because in the process of their conversations, in the process of their melding diversity of opinion, they uncovered unknown unknowns. And if you can do that, you save a lot of time and a lot of money. Because most of rework is dealing with the unknown unknowns that popped up in the course of the work that we didn't know when we started. But if you're leveraging collective intelligence, oftentimes you can uncover these unknown unknowns before the work starts.

Now, because people will have a hard time, let me backtrack, because the leaders in hierarchical organizations have a large, hard time giving up this power, they amplify these blind spots. And I think what is happening is the companies wind up going away and people don't miss them because we don't notice they're gone. How many of us are pining away for Kodak? And here's what's amazing, Kodak invented the digital camera. But their myopic management was so locked into our business model is about film, the processing of film. And why would we want to kill that? And so take that digital camera and hide it. But you can only hide it for so long. Eventually somebody else comes along like a Steve Jobs and figures out how to do it. And Kodak should have put themselves out of business and Kodak should be Apple today.

What none of us are pining for blockbuster now that we have Netflix. Blockbuster should be Netflix. And even more so because the co-founders of Netflix, when they first started out with 55 million in the hole, and they offered to sell themselves to blockbuster for 50 million. And the CEO laughed and said, "Digital technology will never affect my industry. Talk about a blind spot, talk about an unconscious bias, talk about unknown unknowns. And these co-founders were willing, they wanted to sell themselves to Blockbuster and set up blockbuster.com, which wouldn't have been what Netflix became because they saw streaming as the future. Notice Netflix has not made the mistakes that Blockbuster did. Netflix has evolved. We don't get DVDs in the mail anymore, but that was their original operating model. But they've been able to adapt to the times. So companies that can adapt, they are more likely to be leveraging collective intelligence. They are more likely to have peer-to-peer networks within their organization. They still may have aspects of the hierarchy, but their basic organizational workings are the peer-to-peer network. And you have to have that because innovation always starts as a crazy idea.

I mean, look at Elon Musk, everybody laughed at him. "You're going to go into space? You got to be kidding." Well, he's doing it. All right. And Elon Musk, if he brought that up in a hierarchy, would have been tossed out. And so I think what we're likely to see is more light companies will evolve, but they're few and far between. But the majority of companies are going to wind up being displaced. They're more likely to have the Blockbuster and the Kodak experience. And for executives who are listening to this, I would urge them to think about this. How long do you think your current product model is going to last? Do you think it's going to last 40 years like it did in the 20th century? Or do you think it's more likely to last five to seven years? If you think it's the latter, that means somebody is going to kill your business model. Why not you? Why let somebody else? So learn some of the deep protocols, the practices, the tools, and the techniques of companies that can leverage collective intelligence, that can develop effective peer-to-peer network structures. So you have a vibrant sense of innovation and you will always be replacing yourselves. You won't be displaced. And that, if you really care about shareholder wealth, that's what you need to be doing. Not protecting your current business models, but evolving them.

Q2: A simple question here. Let's see where we go with it, Rod. Many people may think they know what collective intelligence is. It seems like a simple idea, a simple phrase. How would you define it?

Rod: It's simple to see and hard to do. James Surawiecki wrote this wonderful book that I think is ageless and timeless. And it's called The Wisdom of Crowds. And I think the most important thing that he identified in his study of the wisdom of crowds of collective intelligence was the four attributes that must be present. And without any one of them, you can't tap into collective intelligence. And they are diversity of opinion, independent thinking, local knowledge, and aggregation mechanisms.

And we as a society, as a larger society today, and to some extent, our organizations are in serious trouble regarding these four attributes. Probably more trouble than we've ever than I've ever seen in my lifetime. Right now, diversity of opinion is unwelcome. We live in a world, we live in a hyper partisan world, both inside organizations, inside corporations, and in a larger society, where diversity of opinion is not welcome. This is critical danger, because we're going to be amplifying biases all over the place that have nothing to do with reality.

The second is independent thinking. People have to be free to express their opinion without fear of retaliation, no matter what that opinion is. We don't have to agree with it. We just have to accept that others think differently, whether we like it or not. The analogy I use is even eccentric people have something to contribute to the collective intelligence.

And the analogy I use is this, you would never have 100% garlic sauce on your pasta, but you will never make a good tomato sauce, a good pasta sauce without some garlic in it. And once that garlic is combined with all the other elements, you've created something really excellent. And we have to have that type of understanding.

The third is local knowledge. This is where corporations get in trouble, especially with decisions in the C-suite. One of the pieces of guidance that I've given to companies over the years is add two or three people to your senior leadership team, who you would never have before. People who are actually close to customers, close to processes, they don't have to have a vote. You can have the senior leaders make the vote, but have them in the room for the conversation, because that local knowledge is going to put you in touch with places where you may have blind spots. More importantly, they're going to be conduits to the unknown unknowns, because oftentimes the people closest to the customers see things the executives don't, and they have no way of getting that knowledge to them until it's too late. Well, if you've got those people sitting with you who are close to customers, close to processes, close to changes that are happening, then you have access to that information as you make decisions.

And the fourth one is aggregation mechanisms. You need some vehicle in which you can collate the collective intelligence of the group. And generally, it's usually some form of voting. And oftentimes, you might want to have anonymous voting, so that people, their independent thinking is clearly handled. You don't always have to have it, but for delicate issues, leaders might think about that.

Those four attributes are critical. When I came across this book, I finished a 33-year career with the Blue Cross Blue Shield Federal Employee Program. And I had spent the last 10 years, the first five of those as the leader of the operations of the business. I'm sorry, as the early five years as the leader of the operation, and then the second five years as the program's chief executive. And I was applying these peer-to-peer principles in that context. And one of the things that I would do to handle a really, really difficult issues, whether it was a systems problem, whether it was an operational issue, whether it was creation of new products, or a key strategic issue is I wound up inventing this format I call the Collective Intelligence Workshop. And I have used it for 10 years with high success.

And what we did is get a microcosm of the business in the room in the form of about 50 people, because we were an alliance of 39 separate companies. We were a rather large enterprise. Beginning of the 10 years, we were 6 billion enterprise. At the end of the 10 years, we were 19 billion. So this was a large business. And by having that microcosm of the business in the room, then as we were working issues, different people affected could speak up. And so that local knowledge came into play. And we had high-level executives, as well as people close to the processes in the same meeting with the same voice to process the information.

And what astounded me was everything that we did over the course of 10 years using this format, I never had one instance where we didn't have 50 people reach unanimous agreement. That was a surprise. And the reason was because we did have such a comprehensive group that any issue that could affect anybody could be handled. And when we would come up with a solution, we weren't solving one aspect of a problem. We were still, we were solving everything holistically. And when you solve it holistically, then people's concerns wind up being met. And when the work that was done in these collective intelligence workshops was conveyed to people who are not in the room, even if we had made tremendous leaps in what we were doing, the people who are not in the room, their reaction would be, that's very well thought out. And that's, and I realized why people object when handed directions, because they're not well thought out. I know something that you don't that you didn't take into consideration. And I have no way of telling you because you don't want to hear it.

Okay. Well, when you're struck to collect an intelligence workshop, we said, we want to hear it. And if the group all decides this is important, we're going to come up not with a solution of one aspect of a problem. We're going to come up with a solution for the problem in terms of how it hits all aspects. And that is a secret to being on time, under budget and high quality.

When I read Sarah Wikey's book, after I left the organization, I sat back and I realized, I now know why the collective intelligence workshops worked because we had all four aspects.I didn't know it at the time. I saw it looking backwards, but we had diversity of opinion because we proactively brought in different opinions. I didn't want one point of view. I wasn't pushing for it. And as the facilitator, I took the position, I will not invest in the outcome and I will not push my own thinking because I'm not going to substitute my intelligence for the collective intelligence of the group because nobody is smarter than everybody. And I really believe in that principle and that demonstrated it out. And we had independent thinking because we separated ideas from people since we had high level people in the meeting and people closer to processes. I didn't want the high level people standing up and saying, this is what I think. And then the rest of the group says, oh, we're just going to go along with that.

So we process everything in small groups. So there'd be tables of maybe six to eight people. And so when ideas were presented, it was presented as table one, table two, table three. And we had the ideas separated from individuals so that the ideas took on a life of their own. And that allowed an idea that may have been generated by somebody who graduated from college two weeks ago who's a new hire. Who knows if that was the best idea, all of a sudden the group is owning that and running with it. We had no idea oftentimes where the origin of the idea was. It just became the whole collective intelligence workshop groups idea. And so this helped for independent thinking.

Another way that we assured diversity of opinion is when these tables reported out their ideas, the others could only ask clarifying questions. They couldn't agree. They couldn't disagree. They couldn't say, I have a better idea. We wanted an important part of tapping into collective intelligence is I need to understand not only what I think, I need to understand what others think regardless of my agreement or disagreement. And I might continue to very much disagree, but I at least need to understand where you're coming from.

And so that was a discipline in a collective intelligence workshop that the first half day or two thirds a day was really focused on this. We're going to be listening to a lot of ideas and not reacting to them until everybody understands what everybody else is saying. And it's amazing when you do that, then once we open it up to a more given and take dialogue, it changes the context. You're no longer saying, well, my idea is better than yours, or that is the dumbest idea I've ever heard. What you wind up hearing more is as people bring out different things.

Well, what if we take the aspect from this point of view and what if we take the aspect from that other point of view and let's put those two things together. And now you've created something entirely different. This is how you uncover unknown unknowns. And so when you think about it, the two original ideas, you could see why both sides said, neither one of those is going to work and why that you got to get to fight past that. But if I take one element out of this thinking and another element out of that thinking and put those together, all of a sudden we have a third point of view that the whole room says, yes, that's going to do it. This is why we consistently had unanimous agreement. And these workshops took about two days because we needed to, we need to understand and take steps and it takes time. But this time investment paid itself back in time, multiple, multiples, multiples, because our work was done on time and under budget when we use this approach, time in and time out. And so these four aspects are just critical for tapping into collective intelligence. And if anybody has had this experience, they do appreciate the fact that nobody is smarter than everybody.

Rod: It happened when I was in college. It is the most memorable thing that happened to me in my four years as an undergraduate. I was a junior. It was the first semester of the junior year. I took a course in social psychology. The class had 200 people in the room and the professor opens up the class by saying, this is the only class you'll be required to attend.

He says, your grade is going to be based on two things, he said half a it will be based on tests, the midterm and the final. And all the content on those will be what's in the books. Nothing will be on it that's not in the books. So if you can self-study, that's fine.

He said the other half of the requirement, and this is mandatory, you all must attend a simulated society weekend in October. And he was very clear. He said, if you have a wedding to go to, you have to drop the course. You'll fail because that's going to be half your grade. And if you don't come, you'll get an F. And so I'm telling you now, if you have a prior commitment, you drop this course. And he was very adamant.

Well, when that October weekend came, I should backtrack before that October weekend came, we had a fellow at a questionnaire. And I remember one question from this vividly because I thought long and hard about how to answer it. Of the following three, which motivates you most? Affiliation, achievement, or power? I went to the school, this is in the early 70s. So this is during the Vietnam era. And I knew that the politically correct answers were achievement and affiliation. But that wasn't my honest answer. My honest answer was power. And I thought long and hard, I said, you know, I'm going to be honest. And so I checked off power.

Well, when we show up, we're divided into two groups of 100. Because the optimal side for the simulated society is 100 people. And so we go off with our monitors, and the monitors go over the rules with us. And we're giving, we're each given our roles, we all have roles in society. And my role was I was the Chief Justice of the Supreme Court for the society. And I thought, I bet checking off power had something to do with that. All right. And so they explained the rules.

And one of the rules was, there were four rooms in the society, and no more than 50% of the society can be in any one of the four rooms at any one time. And different people had different rules for movement. Some could move freely. Others had limited numbers of moves. And so there was there was a social stratification, some people had had more assets than others. And they were, you know, we had, we had a press, we had businesses, we had government. And, and through the course of the two days of the weekend, we were thrown critical problems. And we had to decide how to handle them on a social basis.

And it was interesting, we even had a few people doing demonstrations, which were pretty popular at the time. And as this started out, I was stunned at how people got into their roles. They were people who were trying to hoard assets and get greedy. But I noticed that the president of the society and I had a similar philosophy, which was, everyone should be free to advance their own wealth, as long as they don't do it at the expense of the society. And we very early on decided that we would work in concert to do that. And that's what we did.

He led the society accordingly. And, and so people were free to grow their businesses, okay, by making good profits, not bad profits, I define bad profits as making revenues at the expense of the customer. That's what killed Blockbuster. All the revenues came from late fees, those are bad profits. But anyway, and, and periodically, we would get measurements from the monitors on how the society was doing. And our economy was doing well. And no one was dying, you could die in this simulated society, okay. And, you know, person could have a debt. Well, we didn't have any debts, things were rolling.

We get to the, to the second day, we're probably early in the afternoon on Sunday, and somebody comes up with this idea. You know, these four rooms were rendered as really two rooms, because it's two rooms on either side of the hall with a partition, a movable partition. What if we get 50% into one, into one room on one side of the hall and 50% into the other, we're going to roll up the partition, it's time for a party, we're doing so good. And so the Supreme Court decides that it can be done. And the monitor is quite nuts. They said, No, you can't do that.

And we said, show us in the rules where it says we can't do it. And they said, Well, we can't, but we have a sense it's not right. And they said, will you delay your decision 20 minutes, so we can get the professor who's over with the other group? Okay. And we said, Sure, we can do that. That's fair. So 15 minutes later, he comes in, he says, he smiles and says, we're going to roll back the partition, you will have your party in 30 minutes, he said, but I want to take 30 minutes to debrief on what happened in the two days.

He says, congratulations, you have accomplished what less than 5% of the societies do, you've created a fully functional society. And I walked away from that understanding, power does not have to corrupt. If you are invested in synergistic power, if you are invested in the welfare of both the individual and the society, it's not either or, it's both and, you can create incredible circumstances, both for the group and for the individuals. And I took that philosophy into every managerial situation I was in, I was perceived as weird. And I didn't mind being called weird. And, and I have to say, I probably paid a little bit of a price for that. But it was one I was willing to take, because early on, I figured out, I looked around, I said, they tolerate a lot of bad behavior around here, if you get results, I bet they'll tolerate good behavior, if you get results, and it turned out, it's true.

And so I didn't get the, you know, it's funny, I was the chief executive of the program, but the only person in the 65 year history of this business, who led this program, who was not an officer of the corporation, they would not give me that, because I was weird. And I said, you know, I'll pay that price, I don't care. What I'm interested in is working in a human environment, a business environment, that is delivering value to our customers, which was shown by the growth in our market share, and where the people enjoy Monday mornings, each and every Monday morning, and we're making a difference in the world.

And, and I, you know, we accomplished those things, we went from 6 billion to 19 billion, we went from a 43 market share to a 60 market share. And we were creating products that, that, that sections of our particular market was an individual choice market, really liked, we created this is we created one product in the five years I was chief executive, and I think our audience will be surprised at this, we didn't have a rate increase in the health insurance product in any of the five years. That's how we were able to, and it was a product that kept growing.

And so, when you tap into the collective intelligence of everyone, when you learn how to lead a network, you can, I think you accomplish better things. I also think it's less stressful as an executive, I didn't make many decisions. When I was chief executive, I use this collective intelligence process, I led the leadership team as a team, another important discipline, and this will, I think this will cause our audience to just jump and go, you got to be kidding.

Most business organizations do a strategic strategy session once a year go off site for a couple of days. If you're leading a network, I would, I would suggest you need to have a strategy session among your senior leadership team once every two weeks off site. That's what we did. This leadership team, we went off site every two weeks, because in a rapidly changing world, you need to be deeply, deeply thinking about strategy, and it doesn't operate in one year chunks.

It's, and it's getting, and the pace of change gets faster and faster. The other thing is you want the leadership team to be a team, not a group of rivals, not people withholding information from each other. And the other thing is all decisions at that level, by among any one of them, need to be made by the team. So for example, our head of marketing did not have the authority to make unilateral decisions about the general marketing strategy that they were going to employ. No, that was a decision of the entire team. Same thing with systems, same thing with operations. All decisions will be made by the team as a team. And this forced us to have to integrate things before we did the work rather than after, which again, is part of the secret of being on time and under budget and high quality. And the speed of core that grew among this team was quite significant. And it was just a joy to be a part of this team.

I had other, I had another group that, that served as a liaison for the various 39 organizations. And I established them as a self-managed team. I was, you know, I was their supposed supervisor, but I never sat in on their meetings. I, and if they asked me for a decision, I always pushed back and said, you all need to decide that as a group. And they were a secret for our growth. And so these self-managed teams can be highly effective and they're highly adult. You get rid of this parent-child dynamic. That's so that's really inherent in the top-down hierarchy. And you wind up having a team of adults or what General Stanley McChrystal calls a team of teams.

And let me just, I want to throw in, I'm sure there are a lot of people listening to this who are skeptical and saying, you know, this sounds like pie in the sky and doesn't work. And for them, I have this question. Why don't we have airplane crashes anymore? In the sixties and seventies, we had three to four per year within the United States. And now we don't have them anymore. I know Boeing's having trouble with doors coming up, but none of these planes crashed. And why? And it's because they changed the management model in the cockpit in the 1980s. They dropped the top-down commanding control because the NTSB kept seeing as they listened to the cockpit voice recorders of crashes, all the information for a safe landing is in the cockpit. But the captain is ignoring, shutting down and telling the others to be quiet. And they fear challenging the captain for fear there'll be fired. And people are literally, pilots were literally silent, even though it cost them their lives.

And they thought this is absurd. And so they pushed and the airlines all adopted it. They are all trained in what they call crew resource management, which is their version of the peer-to-peer network. And so the captain is not in charge.The captain is a facilitator. And now when a crisis occurs, they immediately and automatically go into this team mode where they bounce ideas off of each other. They challenge and check each other, and they have to do it in fast time. Because when you're in a crisis and you're 30,000 feet in the air, you don't have a lot of time to solve the problem. And they naturally go into this.

And this is the primary reason that we don't have crashes anymore. It's not better machines so much. It's a better management model. And this we're seeing with some of the instances in the news today, it's the machines that have a little bit of the problem. But the people in the cockpit using this peer-to-peer network model, it's so that that's decades history. And that can be applied in the context of any organization. You have to operate very differently. And that's why I highlight three examples in this book and show how these three different companies, again, went from startups to market leaders, every one of them using this model.

Bill: Yeah, I'm glad I asked that question. That was a fascinating story you started with, Rod. And regarding the resource management, I'm a private pilot. And they taught us that during private pilot training a lot. And the few occasions when I did get in trouble up there and I had another pilot with me, it was a lifesaver because you are so stressed out. I think your IQ drops 20 or 30 points. You just can't keep it together. You need to keep it together. You need some backup, fast.

Rod: People may remember the United crash where they lost all the hydraulics, which means they had no control over it. Just by bearing the engines. And there were three, this is when crew resource management's in place, there's three in the cockpit. And one of the flight attendants comes around and says, there's a training captain sitting in the seat who's off of his helm. In the old days, you would never do that. Because that would be in the front of the captain.And the captain said, really bring them on up. And they became a team of four. And after that, unfortunately, a third of the passengers perished in that because the only way they could land was a crash landing. But two parts survived in prior days, no one would have survived that crash.

And when they interviewed Captain Al Haynes, that was his name afterwards, they said, how are you able And it's a shame that, you know, I understand some people that but you saved two thirds of the people, how are you able to do it without missing a beat? He said, oh, crew resource management, if we had not operated that way, we all would have died. And so it's this peer to peer.

Another thing, the peer to peer network is not an alternative management model. It is a superior management model. And mainly because you can tap into collective intelligence, correct for the blind spots, and you operate according to a higher dimension of power. And that power is amplified in the marketplace.

Q4: Next question, Rod, you may have touched on this one as well, but let's see. How do you see the role of leadership evolving in self-managed peer-to-peer networks, and what are the most critical skills for leaders in this new paradigm?

Rod: Ah, it is a paradigm shift on leadership. We continue to see the leader as hero. The leader is a single person. No, leadership is a team activity. No single person, especially in a rapidly changing world, can be an effective leader. Primary reason for that is somewhere in the first decade of our new century, and some people have put it somewhere between 2006 and 2008, the world now moves faster than any single individual can process it. Look back to the 70s, Chrysler was in trouble. They bring in Lee Iacocca, and he single-handedly turned that company around, and he did it.It was him by himself. Couldn't do that today because too much is changing too fast.

And so the only way you can process everything happening when the pace of change is faster than any single individual that can process it is you have to tap into the collective intelligence of teams, and you have to be able to do it rapidly. And so this is a big challenge because I think one of the things that it holds back traditional organizations is they anti-select the very leaders they need. This was something Jim Collins found in his book Good to Great. If you recall, he talked about this level five leader, all right, and the level five leader kind of corresponds with what Abraham Maslow described as a self-actualized person. And so these people naturally invest in power with not power over. So they're not interested in taking charge, and they're not narcissists, and they're not interested in advancing themselves.

One of the things Collins said is these leaders when things go right, they look out the window, and when things go wrong, they look in the mirror. Complete opposite of your traditional narcissistic executive. When things go right, they look in the mirror, and when things go wrong, they're looking out the window, all right. And so the prime leader, if you will, and that can be prime leaders because there are founders to these self-managed companies, okay, are inherently invested in power with, and they don't engage in power over. And then they wind up collecting around themselves people who also are invested in power with. So it means we have to change the profile of who we hire.

And Collins found in his study of level five leaders, boards anti-select the people they need because these people are not, they're not advancing themselves. They don't come across as these stars. And so they're humble, they're quiet, but yet they wind up being the most effective leaders. Why? Because they lead teams of leaders and they know leadership is really a team activity. When Gary Hamel, the management guru, who's written several books on this new management model space that's aligned with it, he went out and visited one of the three companies I highlighted in my book, which is Morningstar. And he walked around the Morningstar's of tomato processing company, it's the world's largest million processor. And as he's walking around, he turns to the founder and said, this is amazing. What I'm seeing here, you're getting so much done and you have no managers. And, and Chris Rufa, the founder said, Gary, you've got it wrong. Everyone's a manager in Morningstar. Everyone is a leader. It's that we practice leadership in the context of teams. And so they're all in teams, people are accountable to each other.

The other thing people say, if there's no boss, what happens to accountability? And my answer is it goes up, not down because I'm no longer just accountable to one person. I'm accountable to a team of perhaps eight, nine, 10 people. And I have to find a way to balance their needs. That is a way that you can design your company to holistically handle problems, which will save you time, save you money, increase your quality. And so there is this paradigm shift that goes on and we have to see leadership again, as, as a team thing. And one of the chapters I have in the book is called Building Teams of Leaders. This is why, for example, with the senior leadership team, we went off site once every two weeks, we were building a team of leaders. I didn't make the decisions. The team made the key strategic decisions.

Sometimes when I didn't agree and my reaction would be, well, I'm going to be the learner in this group because I came to value collective intelligence so much that I would never substitute my judgment for the collective intelligence of a group. And, and I always saw it as a learning opportunity. And I was the one who eventually would say, now I see the wisdom of what the group came up with.

Q5: Given the rapid pace of technological and societal changes, how do you envision the future of organizational structure and leadership over the next decade?

Rod: Oh, this is the big question. I think this is, this, this is the existential issue of our time.It's not AI. AI is merely a platform upon which this existential question is going to play out. And I, I'll, I'll, I want to do it in the context of AI because it's on everybody's mind. All right. And what AI, whether AI is benevolent or not will depend upon how we organize it. And I would begin by saying at this point of time, we have not created any artificial intelligence, not yet. We've created artificial information. It's not intelligent because true AI will be the ability to aggregate and leverage our collective intelligence. That is what AI will be.

And right now our platforms are not building that they're building artificial information that are aligned with the biases of the teams that are creating them. And they are actively working against diversity of opinion, independent thinking, local knowledge, aggregation mechanisms, and doing none of these things. Right. And if they continue on their path, we will never have artificial intelligence. We will have totalitarian artificial information that will impose a single point of view coercively to incredible power over using digital means that will create the most draconian totalitarian States we've ever seen.

And there are a lot of people who are very concerned about this right now and with good reason. I however am optimistic and I am optimistic for a couple of reasons. Number one, I thank God every day that Satoshi Nakamoto, whoever he, she, or they may be, has created and given the world a beautiful gift, which is blockchain. And if AI comes together with blockchain, if we build it as a peer to peer network, if we do not silence anybody's voices, if we aggregate collective intelligence, we will, we have the opportunity for an evolutionary leap in humanity because we will have achieved a higher level of intelligence that has never existed before. And it will be our intelligence. It won't be this machine out there. The machine will merely be a conduit, a mechanism in which we have been able to fully develop an extended capacity to tap into our human collective intelligence. And if we build these structures such that we amplify the freedom of individuals and truly build free societies in which people own their assets, own their information, own their identity. And if we also use these systems to create new ways to identify, capture, and distribute the new wealth being created, then we're going to create a very different society. It will not be a utopia. Our flaws will continue.

One of the things I saw with collective intelligence workshops is all of us remained imperfect. We had our imperfect thinking, but we also had this really excellent thinking we created together. Our differences continued. We could, you know, we were human beings as human beings are, but our differences didn't bring us down. Our differences were able to come together to create something and humans will always be forward. But what I wanted, one of my favorite Peter Drucker quotes, and I think this is the opportunity we have with true artificial intelligence that leverages collective intelligence. I think it's the smartest thing you ever said. "The purpose of an organization is to combine our strengths so it renders our weaknesses insignificant." Then weaknesses don't go away. They're just not significant anymore. And that, if we can do that, we can create a higher form of human intelligence, a higher form of human societies. We, our societies will be defined by power with rather than power over, which means they, we have the possibility to greatly minimize, if not eliminate, corruption. Top-down hierarchies are inherently corruptive. And until we get rid of this form of social organization, corruption will continue. But when, if you can build a synergistic society, corruption is essentially impossible because nobody has power over anybody. We have power with. Now, this isn't absolute.

I, one of the points I make in the book is it's a paradox and we have to decide which we value more. Will there always be top-down hierarchies in our structure in some way, shape or form? Yes. But the dominant form will be the peer-to-peer network. Right now it's the inverse. The top-down hierarchy is the dominant and there are peer-to-peer networks here and there. You do need both models. Okay. But which one is your preferred model? Which one is your default model? And if we build AI, if we build our organizations on the default model of the peer-to-peer network, then the hierarchies that will exist within those structures will not be, they won't be draconian. They won't be totalitarian. They'll be function. And I think that we have an opportunity to create something better.

And one last thing on this, we need, we're going to come up with a problem. We have a big problem we have to solve. And the big problem is this. And so Tashi Nakamoto didn't solve this problem. How are we going to capture the new wealth that is created by the digital age? Because we're creating categories of wealth that are not defined by planned property, equipment, and labor. And we have no ability to capture and distribute. And right now in the digital world is a feudal world because the founders and the stockholders have all the wealth. And those who are producing the wealth, which is, you know, you and I, as we use these social media sites, we get paid nothing. Now it's not the fault of the founders. It's that our current economic currency is not designed for the digital world. And the digital dollar is not the answer because that's just a digitized version of an old economic concept. What we, and this is what Satoshi Nakamoto by creating blockchain in the context of alternative currency and Bitcoin that's smarting is trading over $70,000 once again. What he's done is, or she, whoever they may be, they have shown us that if we build AI, if we build it in blockchain and with the ability to rapidly calculate, and if we leverage collective intelligence, we can determine how much value are you bringing to the world this moment while you're operating in digital space. And if you're bringing a lot of value to a lot of people, okay, regardless of whether they agree or disagree with it, you're going to get paid in cryptocurrency.

And the one problem Satoshi Nakamoto didn't solve is he's created an inflationless system. Inflation in and of itself is not bad. It's only bad when we have more dollars chasing the same amount of value. But in a growing economy, you're adding value. And if you can calculate and understand that value, then when you have more currency to match that value, that is not poor inflation, okay? That is the dollars on matching the value. The type of inflation we have today is we're printing dollars, and I think we're actually decreasing value right now. That's the problem. When the number of dollars out, when the quantity of currency is mismatched with quantity of value, you want those matched, but a growing society is going to continue to create more and more value. And the digital age has the opportunity to create tremendous value at exponential levels. And so this is an adjustment that needs to be made to Satoshi Nakamoto's original model. I know he's, I think it's either 21 or 27 million coins is the max. So how do you make sure that as we increase the amount of cryptocurrency, we are matching it with value? That's a problem that AI might be able to solve.

So these are the pressing problems that we have down the road. And I'm optimistic because peer-to-peer networks can innovate and top-down hierarchies can't. And it may appear that the hierarchies are going to win in the beginning, but in the end, and it may be messy, the peer-to-peer network, I think will dominate. Even though the dark ages existed for a while, in the end, the Renaissance and the enlightenment transformed the world.

Q6: Rod, can you summarize the top takeaways you'd like people to get from reading your book?

I guess the top takeaway is that nobody is smarter than everybody is a better design principle than trusting authority. And I think a lot of people will resonate with this right now, because one of the big things that's happened in the last three years is to trust in authority and trust in our institutions is at an all-time low, at least in terms of our lifetimes. And that is unsustainable. And so we have to appreciate the value of a different design principle. We have to start respecting diversity of opinion again, and allowing people to have their individual thinking.Individual differences is not a bad thing. It's a good thing. And I hope that we come back to that type of give and take world, where it is okay to have discussions with people who think differently. And we can appreciate thinking differently, even though I may not necessarily agree. Because only by combining our strengths, as Peter D. Drucker says, do we make our weaknesses insignificant.

Q8: How do people best get in touch with you, Rod?

Rod: They can go to my website, which is rodcollins.net. And that's R-O-D-C-O-L-L-I-N-S dot net. I have a column on sub stack. And if they found these ideas fascinating, they can, I just published just about two weeks ago, the new book, Nobody is Smarter than Everybody. And the subtitle is Why Self-Managed Teams Make Better Decisions and deliver extraordinary results.

Bill: Yeah, it's an excellent book, Rod.And congratulations on it. It's an amazing piece of work. And you've revealed so many insights and interesting things here today. So it's going to be fun to publish this.

Rod: Well, Bill, thank you so much. It's been a pleasure to be with you today.

Bill: Okay. Thank you, Rod.

Rod: Thank you.