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The Stats Guy: The importance of data and knowing what to do with it

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Knowing what to do with data has never been so important, writes Simon Kuestenmacher. Image: TND
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We read a lot about the importance of technology, artificial intelligence, big data and automation in business and government. We’d be excused in assuming that evidence-based decision making is the norm in Australian organisations.

Well, I have good news and bad news for you.

Let’s start with the bad news. As a demographic consultant I still run into organisations that rely on nothing but gut feeling in their decision making.

Of course, instinct, and bold gambles, are key ingredients in any successful business, but to achieve lasting success even the most instinct-driven maverick must add data to their decision-making diet. Plenty of small business closures might be avoided had the owners placed more emphasis on data.

The same is true for governments. Policy should rely on more than just the gut feeling or ideology of a few people.

Now to the good news. Things are changing.

Everyone I speak with at conferences, in my consulting, or even on social media, knows how important data is for business. Most businesses even collect quite a bit of data, but you’d be surprised to see how under-utilised that data is in the end.

New rules, fresh response

I want to show you a case study today where data, gut feeling and democratic processes are combined in an effective way.
Let me introduce you to, of all things, the Victorian Local Government Act of 2020. This 390-page document forced every Victorian Local Government to create a Vision 2040 document.

So far, so boring. Local governments have long had some sort of document saying stuff like: people are important to us; we will build more playgrounds; we have nice cafes; we are a great place to do business.

The difference this time around is that councils were required to adopt a community engagement policy in creating their 2040 Vision. Deliberative engagement practices had to be used in the process.

The goal is to put residents closer to the affairs of local government. This is much more than a token gesture of interviewing a few folks and then ignoring all comments.

In practice this means a group of around 40 residents that closely resembles the population of the area is invited to participate in creating the vision document. Such a group is way more representative of the community than their elected officials.

The group is guided over several weeks or months by external facilitators through a deliberative approach that seeks to elicit informed and meaningful outputs. Part of this process is inviting economists, ecologists, educators, demographers (that’s why I am familiar with the process), and other experts in to explain perspectives through which to view the next 20 years.

The representatives are being provided with tons of data from different fields here. They are, however, not left alone with a pile of incoherent data, but the experts and facilitators run collaborative workshops educating the representatives.

As a demographer I am getting grilled in these sessions on what an ageing population might mean for the area, how homelessness can be tackled, how house prices might develop, what the community can do to improve social cohesion.

Real discussions, real people

These are not chats in the ivory tower of academia but real discussions with local people who are actively working on making their town a better place. I worked with very skilled facilitators in these sessions who encouraged people to critically test, weigh up, and grapple with a multitude of perspectives, inputs, and evidence.

At the end of the process the representatives collectively formulate a Vision 2040 document that aims to tackle issues that concern the whole community. The ultimate decision on what topics end up being included in the document and are a beautiful combination of gut and data.

But why bother going through all this effort to write an excellent Vision 2040 piece only to have it completely ignored by small-minded local politicians?

Well, there is a twist: At the start of the process the council promises to the representatives to implement their suggestions. This process actually results in policy – data-driven policy written in a collaborative manner by a representative group of residents.

How about we follow the example of the Victorian Local Government Act of 2020? Anyone can use the basic principles of adding data-driven insights into their personal and professional decision-making.

On a personal level, I previously wrote about the importance of understanding data regarding risk when making the decision whether to get vaccinated. Our gut feeling can be spectacularly wrong – we all can easily be tricked into fearing things that even a casual look at the data would dispel.

We of course all know that lying with data isn’t hard either. We will forever need to critically examine data that we come across as well as our own feelings.

Demographer Simon Kuestenmacher is a co-founder of The Demographics Group. His columns, media commentary and public speaking focus on current socio-demographic trends and how these impact Australia. Follow Simon on Twitter or LinkedIn for daily data insights.