For those of you who are not aware WPP Plc is the world's largest advertising company by revenue and, with advertising being a pretty good proxy for economic health, the views of their chief executive Sir Martin Sorrell can make interesting reading.
His metaphors have become well known in the business world including the 'LUV' recovery which is a view on how different regions would recover from the post Lehman financial crisis. In Europe, he thought it would be L shaped i.e. a sharp fall, then flat. In the US, he foresaw a U shaped revival and in emerging markets, a V shaped bounce-back. Not a bad analysis.
In his latest report his metaphor is the 'grey swan', a variant of Nassim Nicholas Taleb's 'black swan' events.
Using Donald Rumsfeld's famous descriptions, black swans are the 'unknown unknowns' or random events that can have a huge impact. Grey swans are 'known unknowns' – we realise they are out there, we just don't know what their effect will be.
Sorrell has identified six grey swans :
- The health of the US economy
- The crisis in Euroland
- A slowdown in emerging market economies
- Worsening economic prospects in the Middle East
- Uncertainties of Scottish independence
- UK exit from the European Union
Plus, he has identified three black swans, whose arrival had not been anticipated: tensions between China and Japan, the crisis in the Ukraine and the conflicts in the Middle East especially in Gaza, Syria and Iraq.
With shipping pushed and pulled by global events it will be interesting to see how these events unfold. It would also be fascinating if you have views on what the 'grey swans' are in the shipping industry – cost pressures? Regulatory burden? Demand from China? Crewing? Piracy? We'd love to know your thoughts. Tweet us at @spinnakerglobal or fill out the comment box below.
Article written by Eric Branson, Manager, Commercial Division, Spinnaker Consulting (right).
