Janet Yellen’s leadership style is right for the Fed, and for the future

October 9, 2013

Federal Reserve Vice Chair Janet Yellen (Federal Reserve/Flickr)

The news that President Obama will nominate Federal Reserve board chair Janet Yellen to become, if she is confirmed by the Senate, the first woman to lead the U.S. central bank should come as a surprise to no one.

For months now—and especially since Larry Summers withdrew his name from consideration, making Yellen the frontrunner—we have been hearing about Yellen's impressive resume. We have been reading about her accuracy in forecasting the economy. We have been learning about her approach to fiscal policy and her focus on unemployment.

But most of all, it seems, we have been hearing about her leadership style.

That's because, while the horse race to succeed Ben Bernanke still included Summers, the two economists seemingly poised to take the job could not have looked more different. On the one side, there was Summers: authoritarian, outspoken, self-assured and brash. On the other, there was Yellen: consensus-driven, mild-mannered, methodical and, to some, possibly timid. This caricature even became gendered in its tones, pitting the arrogant and alpha male against the cooperative but passive female.

While such a comparison may be simplistic, it played neatly into the story line of what was at stake. What kind of leader do you want setting monetary policy right now—one who could spook the markets with unexpected comments, or one whose communication skills have been the subject of praise? Who do you want leading the Fed when it is experimenting more—one who is bold but unpredictable, or one considered more cautious but also more transparent?

The underlying idea here is that being the chairman of the Fed, at this moment in time, uniquely requires a leader with a special blend of calm but clear communication skills, as well as a continuation of current chairman Ben Bernanke's low-key style. And to a certain extent that is true. It's accurate to say certain jobs benefit from leaders who are more focused on collaboration and open to others' views. And it's correct to say there are times when a more hierarchical, less consensus-driven approach to leadership is necessary, such as on the military battlefield or in, say, a corporate turnaround that's laser-focused on cutting costs.

Up to a point, that is. This debate between leadership styles has become something of its own false equivalence, to use a phrase that's been tossed around a lot lately. It implies that an authoritarian, blunt, so-called "strong" approach to leadership can be just as valuable as a collaborative, consensus-driven, if more reserved style of being in charge, it just depends on the context.

Well, I disagree. It is not as valuable. In today's world, the my-way-or-the-highway, smartest-guy-in-the-room approach to leadership may still have its place, but in decidedly fewer contexts. At the top of the Fed, in corporate C-suites, on court-side benches and even at federal agencies, a commanding style is increasingly seen as less valuable than one that's collaborative--one built on influence, empowerment, cooperation, listening and then, finally, informed decision-making by the leader in charge.

That last point is an important one. Being collaborative is not the same as being too yielding to make the tough calls or too passive to lead. Yellen may be known as a consensus-builder, but she's also repeatedly described as one who stands up for her own ideas. If anything, ironically, that reputation for being her own thinker rather than a team player may have been one reason the Obama White House initially appeared to prefer Summers for the post, reports Wonkblog's Neil Irwin. And in a profile in today's New York Times, Yellen comes off as more assertive, less averse to conflict and even tougher than Bernanke, particularly when it comes to her views.

So perhaps the lesson of the Yellen vs. Summers debate isn't just that the two leadership styles are unequal. It's also that they're not mutually exclusive.

Jena McGregor is a columnist for On Leadership.

Read also:

Janet Yellen and the problem with the Federal Reserve gender debate

Are women better leaders than men?

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Jena McGregor writes a daily column analyzing leadership in the news for the Washington Post’s On Leadership section.
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