Greece is currently suffering from an economic crisis. Leaders in Greece, the European Union, and the rest of the world are all anxiously watching as events unfold to attempt to minimize the impact of these issues. An analysis of this issue can help these leaders minimize their own impacts, as well as provide appropriate aid to Greece. However, performing an root cause analysis on an issue whose roots reach back years is not an easy task.
Normally a root cause analysis performed as a Cause Map begins with a problem outline. However, sometimes an issue is so complicated that it’s difficult to begin there. In these kinds of cases, beginning with the creation of a timeline may aid in the investigation.
What to include in the timeline is a frequently asked question. When beginning a timeline, put in all the information you have. It may make sense to go back later and create a less detailed timeline. However, many events that don’t initially seem to add much to the timeline may later turn out to be important in the analysis. In the case of Greece, I began the timeline with Greece’s entry into the European Union (EU). While it wasn’t clear initially whether this contributed to the current issues being faced by Greece, it later became clear that the restrictions placed on EU-member countries did in fact contribute to the current issues.
Events in the timeline may turn out to be impacted goals. For example, at various points in the timeline Greece’s credit rating has been downgraded. The last downgrade occurred just before default by Moody’s. Having a solid credit rating is an important goal – so a downgraded credit rating, especially one as low as Greece’s, is an impact to the financial goal of that country.
Once the timeline has begun (it’s not really complete until the issue is considered resolved, which in this case will take years), the next step would be to tackle the outline. Writing the timeline will hopefully have provided some clarity to the issue. For example, since Greece entered recession in 2009, we can choose 2009-2011 as a logical time to enter in the outline. If more detail is desired, referring to the timeline is also appropriate.
The most commonly asked question about the outline is what to write in the “differences” row. Differences are meant to capture things that may have been out of the ordinary, or potentially answer the question “why this country (or equipment or time) as opposed to some other country?” Because Greece is a part of the European Union, which has consistent financial goals for its members, we can use some data points that show how Greece differs from other countries in the EU, or essentially answer the question “why is Greece having these issues instead of the other EU countries?” In Greece, debt is estimated to be 150% of the Gross Domestic Product (GDP). This is much higher than for most other nations. The public sector in Greece accounts for about 40% of the GDP, also higher than typical. Greece has the second lowest Index of Economic Freedom in the EU, which impacts its ability to quickly adjust to economic changes. Greece economic statistics were (significantly) misreported, contributing to the rapid decline in stability. And, Greek tax evasion is estimated at 13B Euros a year. This is likely not a full list of the differences between Greece and other EU countries, but it’s a start and the outline can continue to evolve as more information is provided on the issue.
Once the top portion of the outline is complete, the impacts to the goals can be addressed. Again, many of these impacts can be pulled from the timeline. There were some citizen deaths associated with rioting as a result of proposed economic policies, which is an impact to the safety goal. Spending cuts and tax increases impact the customer service goal (in this case, the “customers” are the citizens of Greece). The production goal is impacted because of high (above 16%) unemployment, and the financial goals are impacted by a debt rating just above default and a 110B euro default. Last but not least, there is the potential for impact on the European Union if the crisis spreads beyond Greece.
As you’ve noticed, no real analysis has yet taken place. We’ll look at some of the causes contributing to the current issues in Greece in an upcoming blog. Click on “Download PDF” above to view the timeline and outline