AUGUST 2016 / NO. 1
TAGS: CRITICAL THINKING, CEO, GREY SWANS, BLACK SWANS, ECB, EURO, SWISS FRANC, GREECE, CHINA

Do we believe the truth when we hear it?

“Do we believe we all know the truth when we hear it, even if it’s not what we want to hear, and do we feel better once we come to grips with reality?”
Do we really believe the truth when we hear it, even if it is not what we want to hear? That is strategic intelligence at its core: critical thinking, perspectives over and above facts, challenging assumptions, and determining the course of future action. On one occasion, I was presenting to one of the leading business groups in the Netherlands, and at the end, the CEO of a top-25 listed company asked us what kind of differentiating tools we use to determine the possible courses of future actions. We frequently use six for our clients: scenario planning and analysis, strategy under uncertainty, strategy as active waiting, competitive arena analysis, early warning analysis and Grey Swan analysis. He asked me to give three examples of future Grey Swans?
Note that he asked about Grey and not Black Swans: Grey Swan events are generally things we don’t like to hear. Here are three examples:
  1. On 31st December, 2018, the ECB will stop using € 500 notes: currently 30% of all the physical currency notes in circulation out of a total of € 1,000 billion are € 500 notes. The expected impact will be a further weakening of the euro against the dollar and the Swiss franc. Switzerland is the only country in Europe with a 1,000 Franc note, which already represents 60% of all Swiss notes in circulation. In the next couple of years € 500 notes will be exchanged for CHF 1000 notes. The ECB may not succeed in fighting financial crime, terrorism, corruption and the war on drugs, if the Swiss decide to maintain their CHF 1000 note.
  2. It is expected to be tough going in Greece in the summer: Greece needs more money again, though people generally don’t like to hear this. Nobody likes to hear the following: according to research by the European School of Management and Technology in Berlin, reports that 95% of the € 220 billion in Greek bailout money went to European banks, which means that only € 9.7 billion found its way into the Greek budget for the benefit of citizens. The impact is expected to be another ‘hot summer’ for Greece and an additional loss of faith in EU-leadership and in country leaders such as Merkel, Macron, Rutte and the other eurozone-leaders.
  3. Is China back? TV entertainers and the analysts at banks tell us that China is in recovery again! But this is not the case. The Baltic Dry Index currently shows that it has plunged; this is a clear early warning signal that China is not back!
“The real truth is that much of what we were all taught is not so much how the world really works as how the world should work”
Dont miss out on our Intelligence Briefings. Subscribe to these free Intelligence Briefings by clicking HERE.
If you like to read our previously published Intelligence Briefings, please click here.