LONDON—Europe has been on my mind lately for two reasons. First, I've spent the last two weeks in close company with a bunch of Europeans while on vacation in Nepal trekking through the Himalayas. Second, as we did that, their governments back home continued to tap dance around the ugly truth that Europe is going to pieces. I mean, we were in places five days away from civilization by yak, and even we heard what's been happening.
The European Union's latest scheme to save itself from destruction is to revise the EU charter to bind member states even closer together, with more EU-level control over budget and fiscal policy and (allegedly) severe punishments for countries that ignore those rules. I applaud this idea in theory, since our forefathers here took a similar approach in the 1780s and it worked well for us. But I asked my fellow trekkers from Europe whether they had any faith that the EU's latest promises would work in practice.
“I don't know,” said Anthony, an Irishman. “I can't say I see how any of this matters to me very much.”
Then there was Marco, the German. “We all should be working together, yes,” he said. “I'm not sure all the people and the governments want to do that.”
Therein lies Europe's fundamental problem, and any business executive in charge of steering large numbers of employees toward common goals—like, say, a Code of Conduct—should pay heed.
The EU's core tension, everyone says, is that it created a common currency (that is, monetary union) without a common budget to control the value of that currency (that is, fiscal union). Without the latter, some countries overspent wildly, ruining their balance sheets and risking the balance sheets of others—as well as those of financial firms from Rome to France to New York and all points in between.
The question students of organization behavior should ask themselves is: Why did Europe allow that flaw in the first place? What did EU leaders want to achieve?
Let's skip the history of 1980s and 1990s Europe, when French and German leaders had dreams of a “United States of Europe” that would propel them into history. Fundamentally, they wanted to bring people together—but the only “brining people together” that was politically possible was monetary union. Fiscal union (let alone governmental union) was a bridge too far, so it never got built.
Compliance officers, CEOs, and board directors—anyone involved in motivating large numbers of people, really—would do well to ponder the EU's move. Was monetary union really the best way to bring people together? Was that enough of a common concern that 400 million Europeans would alter their spendthrift political ways to move in one desired direction, of prudent budgets? Clearly not.
So how do you set common goals and interests that people actually follow? What types of goals can you point at so that your organization—a department, a workforce, a country—will say, “Yes, that's a worthy goal, and I'll change my individual behavior so the whole group can achieve this”? That's what compliance officers try to get employees to do every day, after all.
Back to my trekking group in Nepal. We also had several Canadians in the mix, so I played my favorite parlor game with them: How about the United States and Canada merge our currencies into one North American dollar? The answers were predictable.
“Are you for real?”
“Um, no.”
“Keep your ‘amero' conspiracy theories south of my border.”
Fair enough; I happen to agree with them. But then I hit them with another question: What if the United States opened its borders to Canada and Mexico, in exchange for full control of border security around all of North America? That brought a long pause. Then, as one woman from Edmonton put it: “Well… I can see that makes more sense. That at least is something both our countries worry about.”
Somewhere in there is the lesson for compliance officers. The EU chose monetary union as its common goal but that wasn't the right choice, and it built a governance framework that allowed its “employees” (EU member states) to keep pursuing their own interests unchecked—which they did, to ruinous abandon for all. No company would want its own compliance department to operate like that.