Ben Bernanke: An Indispensable Leader?
In my presentations and group coaching work, I'm fond of quoting Charles DeGaulle's observation that, "The cemeteries are full of indispensable men." The point I'm trying to make with that line is that while every leader has unique opportunities and responsibilities in their role that only they can do, no one is personally indispensible. President Obama's renomination of Ben Bernanke for another term as Chairman of the Federal Reserve has me thinking that Bernanke may be the exception that proves DeGaulle's rule. As Robert J. Samuelson writes in the Washington Post today, Bernanke, with his unique background as one of the world's foremost experts on the Great Depression and his willingness to take decisive and innovative action to restore faith in the credit markets, could merit a Time magazine cover headline as "The Man Who Saved the World."
While the praise for Bernanke's reappointment is just about unanimous among economists, there are two basic criticisms of his performance to date. The first is that he didn't see the crisis coming (who, in a position of authority, did by the way?) and, second, that along with then Treasury Secretary Hank Paulson and then President of the New York Fed, Tim Geithner, he allowed Lehman Brothers to fail thereby taking the global economy to the brink. Fair enough, but what gets me about these criticisms is they come with the benefit of 20/20 hindsight. It's easy to see the impact of Lehman 's failure in retrospect. You have to wonder if anyone else would have done a significantly better job of managing all of that at the time.
The great thing about Bernanke as a leader is that while the global credit markets began to freeze, he didn't. He drew on his technical knowledge of the Great Depression and immediately pivoted to exercise what two of my mentors, Harvard leadership experts Ron Heifetz and Marty Linsky would call adaptive leadership. (Check out their new book, The Practice of Adaptive Leadership.) He didn't just stick with the traditional Fed response of lowering interest rates, he recognized that completely new solutions were needed to keep the credit markets alive and, with his team, came up with new "liquidity facilities" that pumped $1 trillion into the system. Much of the rest of the world's finance chiefs followed his lead and, today, the global economy appears to be on its way back.
It's interesting to think about how a guy whose previous leadership responsibilities were primarily within the faculty of Princeton University pulled all of this off. Looking through the lens of leadership presence that I outline in The Next Level, I would say that Bernanke demonstrated strong performance in the three main categories of personal presence, team presence and organizational presence. In the category of personal presence, he demonstrated confidence when the world desperately needed him to and, as I wrote here in March, he stepped far out of the mold of his predecessors to custom fit his communications to vastly different constituencies such as the American public, Congress, business leaders and global finance ministers. In the category of team presence, people I know who work at the Fed have told me that morale there is high because Bernanke is the kind of leader who seeks out input from his team and looks to them to solve problems. Finally, in the category of organizational presence, Bernanke is someone who clearly gets the concept of interagency and global collaboration, takes an outside-in view of the problems that needs to be addressed and who has taken unprecedented steps to exercise his leadership footprint in a constructive way.
As this week's renomination suggests, Bernanke's work is far from over. He now has to unwind a lot of what he and his team created to avoid a devastating period of inflation. It's going to be a tough job, but if he continues to lead in the way that he has, I'm optimistic.
Finally, one thing I've learned from blogging about topics like this is that my readers have strong opinions and often radically disagree with me. So, let's hear it. What do you think of Bernanke as a leader? What can we learn from both his positive and negative examples?