I believe that only applies when each individual is allowed to make up their mind independently prior to getting together as a group, at least according to:
http://www.npr.org/templates/story/story.php?storyId=129777531&ft=1&f=129777531
Came in here to give that quote. One of my all-time favorites.
There is also None of us is as dumb as all of us
A dozen dumb guys do not add up to one smart one.
I’m not even familiar with the concept that two smart guys are worse than one, although I’ve seen a lot of committees who seem to feel they have some sort of collective intelligence that somehow rises above the highest single IQ in the bunch. Not so. Not so.
And an elephant is a mouse built to government specifications. 
Another quote:
A committee is a life form with six or more legs and no brain.
–Robert A. Heinlein
That would be an ironical criticism, as the camel is a generally more robust and capable beast of burden and transportation than the domestic Equus.
Stranger
One head is better than two? 1+1=.5?
Bad ideas are bad ideas no matter how many people it takes to think them up.
This is perhaps the better factor to consider
I often say something similar which AFAIK I originated:
“Intelligence is additive. Stupidity is multiplicative.” Sometimes I add
“_____ is exponential.” Where the blank is filled by what’s appropriate at the time.
Perhaps he’s thinking of the well known risky shift phenomenon covered under group polarization at Wikipedia.
I have seen this happen in the sense that two smart people can often also be described as two people who (a) have slightly different agendas and (b) think of themselves as smart and © have egos to match. Consequently if they each individually faced a problem they would come up with an effective solution.
However, put together they each come up with a different solution, potentially favouring their own agenda, and the end result may be a kludge necessitated by the need to compromise to avoid deadlock.
Why does the last post of a thread always have the idea that I came in to say? It’s called groupthink.
This thread is an example of smart people working together, so it will never come up with the right answer.