Weighing in today from Paris, where, as throughout Europe, the refugee crisis is constantly in the news. Observers outside Europe may not realize how profoundly this crisis threatens the European Union. Former German finance minister Karl-Theodor zu Guttenberg, with whom I spoke earlier this week at the Fortune Global Forum, says this situation is “the most serious challenge to Europe since the fall of communism more than 20 years ago.” In at least one sense, it offers lessons to leaders everywhere.
The lesson centers on this question: Who’s in charge? The answer here: no one, exactly, which is a problem for the EU generally. We saw it earlier this year in the Greek financial crisis, worsened by the halfway nature of the European financial system. Many nations use the same currency, regulated by one central bank, yet each runs its own national economy. When Greece’s economy tanked, it couldn’t respond through currency devaluation, and 19 euro-zone governments had to negotiate a bailout with Greece and with one another. No clear leader carried responsibility, The result was a policy of muddling through that leaves Greece alive but struggling, with exit from the EU still a possibility.
The refugee crisis derives from the same conflict, that Europe aspires to be a unified whole yet has no clear leader. The refugee situation is graver because it threatens one of the foundational goals of the union, a Europe with free travel across borders. Overrun by a growing wave of refugees entering Europe mostly from the south and east – three million are forecast for next year – Hungary, Croatia, Austria, and others mull building border walls or fences, or otherwise restricting entry. Nationalist political parties opposing a united Europe are attracting followers almost everywhere. British voters will vote next year on whether to leave the union. As with financial policy in the Greek crisis, refugee policy is sort of happening un-deliberately, with no person or institution bearing responsibility.
Business leaders don’t deal in the fate of nations or of millions of lives, yet they face this same basic issue all the time. One of the commonest reasons for failure of strategies and projects is that no one is sure who’s in charge. For example, identify a customer of any business and ask who’s in charge of the company’s relationship with that customer. You’ll typically hear that several people are, or you’ll even be told proudly, “Everyone is!” Which means, of course, that no one is. Is it any wonder that companies are so often blindsided when a customer leaves?
Watch a successful leader at the end of a meeting. He or she will summarize what the group has decided to do and who, specifically, is responsible for doing it, and by when. Example: Apple, the world’s most valuable company, follows a longstanding policy of identifying a DRI – a directly responsible individual – for everything it wants to do.
I don’t know how Europe resolves its deep-rooted contradiction of needing union-wide policies without a union-wide leader. Business leaders have it easier. They at least can make sure they always know the answer to: Who’s in charge?
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What We’re Reading Today
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Goldman revamps analyst program
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Up or Out
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|Produced by Ryan Derousseau|