We follow the news with a casual eye and reflect on how some lessons in history seem never to be learnt. I just stopped writing a longer article about the McKinsey 7S tool to write this shorter article. The purpose today is to share the timeliness of change and circumstances and apply to proven models we already know. The decision by Greece to close their banks for the week and hold a referendum highlights to me some fundamental points which seems to have ignored.
Balance in the system
Take a look at the below 7S model from McKinsey and you quickly see the central point is about values. The system becomes out of balance if any one area becomes out of sync or becomes too large or small relative to the other.
Individual Debt Size
The level of debt in Greece is a huge at 379,555,560,000 Euro . Greece has a population of just over 111,000,000 so this leaves their national debt to a per person level of 34,194 Euro and their debt clock is startling to look at for at least a 30 second period. DEBT CLOCK .
Personal Values effected
How would you like to wake up in the morning and know that before you pay your own mortgage, car, health, food, warmth, clothing, medicine that the national debt is so high you will need to generate enough value in the world to pay taxes that pays of such a level of debt.
A choice of values
In my opinion, the 7S system highlights the EU strategy for Greece does not match their values of tax collection or sufficient value to pay off their debt. The structure of the nation and structuring of their debt makes it impossible for them to come out in a positive number over the next 10 years. The style in which the EU,IMF and Greece government is handling this situation is none compatible plus the skills to handle such levels of debt may be available, are not motivated to deliver.
Game theory in change management
A solution that one could argue is well handled by the Greek government is to address a fundamental shift of attitude or instigate a change of values in their nation. The referendum being held over the next few days will force the citizens to not just answer a specific question about an out of date debt solution proposal but to confirm or change their core beliefs and values to shape the nation.
If Greece votes no to the proposal, they vote not to the details of the proposal but to the values it represents. This will translate into a default and potential exit of Greece from the Euro. Based on that decision expect a roller coaster ride in the stock market as the media then moves their focus to Italy, Ireland, Spain and Belgium.
If Greece votes yes to the proposal then this signifies to the rest of Europe that they will accept as a unified state a culture shift in tax and benefits payments and embrace the good and bad parts of being in the EU.
A Failed Project
From a personal view, I am very pro EU however its methods of implementation across each state is showing too many cracks and generating sovereign states reactions from the public that strongly oppose its direction and consequences.
Lessons from 7S
This situation for me shows how the 7S steps and interaction points from the McKinsey model requires each unit to be kept to their relative sizes and work with each other. If any single silo becomes out of balance then the model will fall apart.
There is the need of high maintenance to keep their model in flow.
Look out for my full article when it is released on the 7S model and how that will apply to life and business. You can become notified direct through subscription to my articles by filling out the below.
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