The importance of data and knowing what to do with it

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We read a lot about the importance of technology, artificial intelligence, big data and automation in business and government. We would be sorry to assume that evidence-based decision making is the norm in Australian organizations.

Well, I’ve got some good news and some bad news for you.

Let’s start with the bad news. As a demographics consultant, I always come across organizations that rely only on their intuition in their decision making.

Of course, instinct and bold betting are key ingredients in any successful business, but to achieve lasting success even the most instinctive maverick must add data to their decision-making regime. Many small business closures could be avoided if owners had put more emphasis on data.

The same is true for governments. Politics must be based on more than the intuition or ideology of a few people.

Now on to the good news. Things change.

Anyone I speak with at conferences, in my board, or even on social media knows how important data is to businesses. Most companies even collect quite a bit of data, but you’d be surprised how much of that data is ultimately underused.

New rules, new answer

I want to show you today a case study where data, intuition and democratic processes are combined effectively.
Let me introduce to you, 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.

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So far so boring. Local governments have long had some sort of document that says things like: people are important to us; we will build more playgrounds; we have good coffees; we are a great place to do business.

The difference this time around is that boards had to adopt a community engagement policy when creating their 2040 vision. Deliberative engagement practices had to be used in the process.

The objective is to bring the inhabitants of business closer to the local administration. It’s much more than a symbolic gesture of interviewing a few people and then ignoring all the comments.

In practice, this means that a group of around 40 residents who closely resemble the population of the region is invited to participate in the creation of the vision document. Such a group is much more representative of the community than its elected representatives.

The group is guided for several weeks or months by external facilitators through a deliberative approach that seeks to achieve informed and meaningful results. Part of this process is inviting economists, environmentalists, educators, demographers (which is why I’m familiar with the process) and other experts to explain the perspectives through which to envision the next 20 years.

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Representatives here receive tons of data from different areas. They aren’t left alone with a bunch of inconsistent data, however, but experts and facilitators run collaborative workshops to educate reps.

As a demographer, I get toasted in these sessions on what the aging population might mean for the region, how to tackle homelessness, how house prices might evolve, what the community can do to improve social cohesion.

Real discussions, real people

These are not discussions in the ivory tower of academia, but real discussions with locals who are actively working to make their city a better place. I worked with very knowledgeable facilitators during these sessions who encouraged people to test, weigh, and critically tackle a multitude of perspectives, inputs, and evidence.

At the end of the process, representatives collectively formulate a Vision 2040 document that aims to address issues that concern the entire community. The ultimate decision on which topics end up being included in the document and are a beautiful combination of instinct and data.

But why bother putting all that effort into writing an excellent article on Vision 2040 so that it is completely ignored by small-minded local politicians?

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Well, there’s a twist: At the start of the process, the board promises reps to implement their suggestions. This process actually results in a policy – a data-driven policy written collaboratively by a representative group of residents.

How about following the example of the Victorian Local Government Act of 2020? Anyone can use the basics of adding data-driven information to their personal and business decision-making.

On a personal level, I have already written on the importance of understanding risk data when making the decision to get vaccinated. Our intuition can be spectacularly flawed – we can all easily be made to fear things that even a simple glance at the data would dispel.

Of course, we all know that lying with data isn’t difficult either. We will always need to critically examine the data we encounter as well as our own feelings.

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