Grey Swan Analysis
We have listed twelve Grey Swans which we see as, some of, the driving forces which will weaken the economic climate across Europe.
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The invisible American
In the fall of 2016, newspapers such as The New York Times and Financial Times published articles on the recovery of the economy. Is this really the case? It seems we cannot rely on these articles in these otherwise highly-regarded newspapers. From 2001 to 2016 the percentage of the upper-middle and middle class in the US fell from 63% to 51%. This means that some 25 million American economic lives crashed.
Income inequality will have a huge impact on everything
This statement comes from McKinsey publications in July and August 2016 on ‘income inequality’. This new reality means that a new generation of young people in Europe and the US risks ending up poorer than their parents. From 2005-2014 around 65-70% of the population faced flat or falling incomes. Prior to 2005, this percentage was just 2%. This means that 65-70% of the total population faced a lack of economic progress. The main causes were the aftermath of the 2008 financial crisis and the slow recovery that occurred since then. What are the implications?
Unilever’s CMI and Clayton Christensen’s “jobs-to-be-done”
It was interesting to read first about Unilever’s Consumer and Market Insights Group (CMI), and then Christensen’s comments that most companies spend too much time and money compiling data-rich models that make them masters of description but failures at prediction. Let us explain. Organizations now know more about their customers than ever before. Big-data analytics can provide an enormous variety and volume of customer information at unprecedented speed. Almost all companies have established structured, disciplined innovation processes and have brought in highly-skilled talent to run them. Structure is created to show correlations.
Establishing special intelligence teams to make things happen fast
Citigroup established a SWAT team to take the lead from the new fintech start-ups, which are threatening the global multi-trillion-dollar banking industry. Citigroup wants to ‘fintegrate’ fast because they want to be ahead of the revolution, according to Fortune Magazine in July 2016.
Failures in Mergers & Acquisitions continue as ‘business as usual’
This statement is the key message in a crucial publication in HBR in June 2016, about the extremely expensive mistakes in M&A, which seem to be unstoppable! This has been going on for 40-50 years!
The financial world is a mess
The above statement illustrates the dramatic situation in the financial markets where no one, no one at all, has any control. This is what we face daily in our strategic intelligence practices. We provide some insight as to why we cannot rely on the financial system, or on presidents, prime ministers, politicians or central bankers.
Brexit
The 23rd June, 2016, is a historic date in the development of the EU: it is the day on which the British voted for Brexit. Our politicians still believe that all good things in the world come as a result of their actions. However, the economic reality is that our success in trade depends far more on fundamental factors such as ‘comparative advantage’, and whether we design and make things that others want to buy, than on politician’s bureaucratic schemes.
The Top of Intelligence is Early Warning
The core activity of our firm is to deliver strategic intelligence solutions to our clients.You might think “So what?” We can’t influence the performance of our national economies, so we have to live with it. But this totally wrong.
Do we believe the truth when we hear it?
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.