Stephen H Baum Leadership

Some of my friends support Federal Reserve Chairman Bernanke’s leadership while others believe the Fed moves are big mistakes. Either way, you have to admire his effectiveness in building enough support to result in action. 

In Jon Hilsentrath’s insightful article in the Wall Street Journal today, he describes the quiet high-stakes, behind-the-scenes drama:

“As markets rallied at the prospect of new measures to ease credit, a quiet drama was unfolding behind the scenes. Mr. Bernanke was negotiating a high-stakes plan in a flurry of private conversations with colleagues hesitant about aggressively re-engaging the levers of America’s central bank. “

How did this economics professor Bernanke lead?

–       Framed his own view of the go-forward tactics (purpose, guidelines, specifics)

–       Marshaled data and facts both pro and con

–       Spent considerable time and effort LISTENING to each of his colleagues (a minority of whom supported his viewpoint at the start of the latest discussions)

–       Widening the circle to include voters and non-voters in the ultimate September Fed meeting

–       “Drawing out <his colleagues’> reservations and seeking common ground”

–       Timing his private calls evenings and weekends to catch fence-sitters off guard and taking a low key approach to update them on facts and plumb their comfort with proactive solutions

–       Encouraging a select few of his colleagues to devise compromise solutions

–       Being willing to leave one perennially opposed colleague out in the cold (after listening)

–       Keeping his eye on the long term challenge, even beyond his term which ends in 2014

–       Anticipating the moment of choice in earlier (June vs. September) meetings by ensuring a range of options was presented and debated (without revealing his hand) at the August meeting

–       Using memorable language to describe the economy: ”… like a vehicle stuck in the mud.”)

The article quotes one of his colleagues: “Even if you disagree with him on the programs, you know your voice has been heard,” said Mr. Fisher, one of his opponents. “There is no effort to bully.”

Again, my point is not about the wisdom of the outcome, only the leadership that transcended what otherwise would have resembled Washington gridlock, the approach that brought together proponents and opponents who had been truly at odds to a way forward.

That’s just my view. What’s yours?

Here is the URL for the WSJ article: (http://online.wsj.com/article/SB10000872396390444549204578020252883039778.html?KEYWORDS=bernanke),