Lessons From Greece

(Originally published in MBA Connect in August 2015, when Greece was in a financial crisis that threatened membership in the eurozone.)

Six months ago, a paper I wrote was accepted for presentation at the European Group for Organizational Studies conference in Athens on July 2-4. At the time, I had no idea that Greece would become such a hotspot at exactly that time. The referendum conducted by the socialist Prime Minister Tsipras to gauge the interest of Greek voters in a debt deal worked out with the EU was held on July 5, with one week notice. I was in Athens from July 1 until July 7.

From my perspective, it was a fantastic time to be there. Banks were closed, although ATMs worked. Public transportation, including a well-functioning Metro system, was free for the week. Tourists in general were not significantly impacted by the demonstrations, bank closures, capital controls or other fallout from the referendum and crisis. The Greeks that I met were upset and anxious, and they were also eager to express their opinions about the crisis, which made for interesting conversations. I felt privileged to get such an intimate view of a tumultuous, historic moment in their history.

The night of July 3 was particularly surreal. There was a culminating gala dinner for the conference that was held outdoors, white tablecloths and all, on a well-manicured lawn next to the Temple of Zeus. There were about 800 attendees listening to live classic R&B while dining from a resplendent buffet. Literally 100 yards away was the center of the culminating “Yes” demonstration with a crowd of 20,000. They were at least as loud as the live music. Folks at my table were aware of how surreal the moment was, as we chitchatted about common research interests while Greek citizens were passionately engaged in the future of their country. Demonstrators were streaming by on the road looking down at us through a chain-link fence. I am sure it was a bizarre sight for them, too.

So what can we in the SSU graduate business program community learn from the Greek crisis?

1)    Face reality. The EU has not been facing the reality of the unmanageable Greek debt load, and the fact that six years of austerity measures have been counter-productive. The Greeks were not facing reality when they took on so much debt in the lead-up to the global financial crisis of 2008. It is better to have a clear-eyed view of what is going on and deal with problems immediately, even if painful.

2)    Be true to your word. Tsipras forged an agreement with EU partners and then surprised everyone by calling a referendum to vote on the agreement and encouraging a “no” vote. The EU negotiators felt betrayed and were not inclined to do any favors when Tsipras returned to the negotiating table after winning his “no” vote. Negotiate in good faith.

3)    If you are a leader, then lead. It is hard to see how Greece benefitted from the referendum. Sometimes leading means making hard choices and persuading followers to join you.

4)    Be compassionate. The EU “Troika” has held a hard line as far as debt forgiveness, and now there is a lot of anger in Greece toward the EU, the global financial system, and Germany in particular. Greece has been placed in an impossible situation, and the Troika needs to face reality (see 1) and give them a way out. As business leaders, we need to make sure we are acting for the best for all, not from pride and ideology.