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I founded and co-founded a couple of companies: Redington and mallowstreet; I write about issues of the day that touch me and make me think. Mostly about how to make things better.

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Crowdsourced Wisdom comes to the pensions industry


Imagine being able to put your question to the crowd. Doesn’t matter what it is, how difficult or abstruse, how challenging or unique; if you’ve asked the right crowd, it knows the answer.


Sometimes, the crowd gets the answer wrong, but usually that’s because it’s the wrong crowd. It’s a biased crowd (readers of a type of newspaper), or you’ve limited its possible answers (three candidates on election day) or it doesn’t have all the facts (the stock market that doesn’t know Enron’s profits are false).


But when you have the right crowd, a crowd of truly world class  experts, with diverse and independent, informed  opinions and all essential information, well, that’s when you can ask difficult questions and get extraordinary answers.


Imagine you’re the government and you’re  wondering whether to change  the way the industry accounts for pension plan assets and liabilities. Too many pension plans are breaking on the rack and maybe actuarial smoothing will alleviate the pain. Or maybe that’s just an illusion; maybe the problem is deeper and more intractable.


Should you smooth the liabilities, or use another method?  Or just leave things alone? What’s the right answer?


You can send out a questionnaire, launch a consultation, read some relevant forum threads or consult Wikipedia. But there’s one missing ingredient, one reason your answer is incomplete: you don’t know what the crowd would come up with if it worked as a team. Sure, you have their individual opinions, and that helps to inform your views on the answer, but it’s not the same thing. Not even close.


So, could you have the entire wise crowd working together to come up with the best answer to your Big Question? Is such a thing possible? Just think!  You would have the exponential combination of the crowd’s innate wisdom and expertise. It would make Deep Blue look like an abacus. The government would look like a genius.


Here’s a platform we’ve just launched on mallowstreet that lets the crowd do exactly that. It couldn’t be simpler. Click here to describe your proposal for measuring pension plan assets and liabilities.


First, get your Proposal clear, then write it in the box marked “What is your proposal?”  If it really is a great idea, other people will vote for it. Everyone has a total of five votes, and they can give your Proposal up to three of them.


People can also comment on a Proposal and say why it is good, or not good. A good Proposal can be improved upon by someone else and then posted as their great Proposal. People can re-allocate their votes if they see a Proposal they prefer. Maybe yours.


Eventually, after all the posting and the voting and the commenting, the crowd itself comes up with the best answer. It’s the one with most votes.


This is the first time the pensions industry has been asked a hard question which it also gets to solve. Crowd sourced wisdom has arrived.


Now, finally, we get to discover the answers.


It’s a new day.


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