THE EUROZONE CRISIS – THE MANAGEMENT OF THE CONTINUATION OF MEDIOCRITY BY THE UNAWARE

3 12 2011

Much of the UK’s media is today leading with the story of Jacques Delors’ interview with the Telegraph in which he suggests that “a fault in execution” had doomed the Euro to its present crisis. “Turning a blind eye to the weaknesses of some member states” is also highlighted as a contributing factor by Delors in an article in which he is quoted as saying, “the Eurozone was flawed from the beginning and efforts to tackle its problems have so far been too little too late.”

His views are important because Jacques Delors, the former President of the European Commission, is often credited as the architect of the single currency. But why is this of interest to a strategist and what role could (and should) sound strategic thinking have played (and play) in addressing what has been termed, ‘the Euro Project’?

It’s a big leap; moving from addressing a strategy question faced by SMEs in my last blog to one faced by a continent in this; from one of business strategy, to one of politics on a grand scale. That leap reflects a question I am often asked when I tell people I am a Strategy Consultant; “what sort of strategy?” My answer, although flippant hides a truth, for I usually reply, “good strategy!”

Time and again in this blog we have returned to how little people in key positions understand strategy. They wonder at the difference between a strategy for an SME and one for a nation, between that for developing sport and for politics and between corporate and, well, any other.

The fact is that the basic principles hold true across all of those areas while recognising that every single strategy should be a unique case of one, there is no place for convenience and templates for anyone motivated by more than mediocrity.

And yet, by failing to grasp basic principles, mediocrity is where most so-called strategies (i.e. the ones I wouldn’t refer to as ‘good’) are taking their owners.

One of those basic principles is in understanding the purpose (role) of structure. For too many the structure is rushed, the appearance is everything. Structure ends up preceding strategy and mediocrity (or worse) is embedded. The purpose of structure is to enable and to facilitate the delivery of good strategy; that is strategy properly researched, in pursuit of clearly defined vision and with realistic metrics into which the majority of partners buy in.

The Euro Project was (and is) a classic case of having an idea and rushing straight to the structure before considering fully its purpose, the vision it was serving and how its progress would be adequately measured. As Delors points out, “in the 1990s leaders chose to turn a blind eye to the economic weaknesses of some member states, and the response now the issues had surfaced had generally been inadequate.” In short, under ‘research’ little consideration was given to risk factors presented by (e.g.) the limitations of southern European economies.

Of course, a number of European partners chose not to buy into the Euro Project, the UK was/is not alone, and in his interview Delors acknowledges that when ‘Anglo-Saxons’ (as he termed them) warned that a single central bank and currency without a single state would be inherently unstable “they had a point.” He went on, “”the finance ministers did not want to see anything disagreeable which they would be forced to deal with.”

What comes through loud and clear in the interview and is becoming increasingly clear from the ongoing media coverage of the Euro Crisis, is that among the numerous politicians and economists around the various tables none are specialist strategists but all assume they understand strategy. None has realised they need to take a step back and re-examine strategy before attempting to fix a structure put in place based on flawed assumptions.

What is it that the Euro Project is trying to achieve? Is the Euro the best way to achieve that? Is the Euro even required to achieve the stated purpose?

These questions have been asked by some lone voices but the vast majority ignore them and return to addressing the structure, to fixing the structure without considering the strategy which (should have) preceded that structure.

And what of those assembled to address this vital matter? In an ideal world there would be representatives gathered who could call on four key skills – that of the manager, the leader, the economist and the strategist. As with many companies, two of these four key ‘chairs’ sit empty but, also as with many companies, no one has noticed because those in attendance assume greater knowledge than they actually have.

And so the future of the Euro Zone and of those other economies with a significant interest (most of Europe) is being designed by managers and economists. Chancellor Merkel will continue to carefully manage Germany’s interests; President Sarkozy will do likewise on behalf of France and Prime Minister Cameron will speak of managing the UK’s interests. Everyone is ‘managing’ no one is ‘leading.’

What happens next? Management will continue to be mistaken for leadership, economists will continue to take views based on a flawed structure and market trends and everyone will talk of strategy for saving the Euro without really understanding what strategy means and what good strategy is. If I had to coin a phrase to describe it I would say it is ‘the management of the continuation of mediocrity by the unaware.’

Where will we end up? Eventually the flawed structure will be patched up; fear or dire circumstance will eventually force it. The word strategy will continue to be employed without being fully comprehended and future strategy will be hampered by the requirement to be force fit to structure. Managers will manage resources advised by economists while leaders and strategists ponder (and write about) what might have been.

But you don’t have to copy them. Remember; strategy first, structure second. Too many politicians (and corporate managers) believe that putting a structure in place is the same thing as or should precede strategy; which is fine if your greatest aspiration in life is mediocrity!

© Jim Cowan, Cowan Global Limited, December 2011

Read more blogs by Jim Cowan

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10 12 2011
THE EUROZONE CRISIS – STILL NO STRATEGY AND STILL NO REAL FIX « Cowan Global Blog

[…] Crisis was being handicapped by an absence of sound leadership and good strategy. The article (The Eurozone Crisis – The Management of the Continuation of Mediocrity by the Unaware) closed with the following […]

14 01 2012
EUROZONE CREDIT DOWNGRADES SHOULD SURPRISE NO ONE « Cowan Global Blog

[…] The Eurozone Crisis – The Management of the Continuation of Mediocrity by the Unaware. Written on 3rd December 2011 prior to the Brussels crisis talks. […]

19 05 2012
THE EUROZONE CRISIS – A LESSON IN BAD STRATEGY AND INCOMPETENT LEADERSHIP « Cowan Global Website

[…] The Eurozone Crisis – The Management Of The Continuation Of Mediocrity By The Unaware (3rd Decembe… […]

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