Level 5 Leader - Alan Greenspan

When thinking of great financial leaders, one name comes to mind: Alan Greenspan. Not only was he the Chairman of the Board of Governors of the Federal Reserve of the United States, but also he was and continues to be a prominent influence in the financial world. Greenspan worked eighteen years as the Chairman of the Federal Reserve, beginning in 1987 and ending in 2006 when he retired and was replaced by Ben Bernanke. He was appointed as Chairman five consecutive times; therefore, it is obvious that he did something right as a financial leader. Throughout his long career, Greenspan developed and possessed many qualities attributed to Level 5 Leadership described in the book Good to Great by Jim Collins. In fact, Greenspan displays both qualities in the two sides of Level 5 Leadership: personal will and personal humility.

Personal Will: First, Greenspan "demonstrated an unwavering resolve to do whatever must be done to produce the best long term result" (Collins). As the Chairman of the Federal Reserve, Greenspan faced enormous pressures because he controlled the stability and soundness of the U.S. economy. Therefore, he always had to perform at his utmost ability and do whatever it took to keep the economy stable. Throughout his career as Chairman, Greenspan experienced many ups and downs. Edmund Andrews once said, "Mr. Greenspan's approach to such challenges was to roll with the punches, basing his management of the economy on a refusal to believe in firm rules, doctrines, or models." Greenspan is considered to be responsible for the economic boom in the 1990s. As stated by Stephen Roach, "Greenspan's leadership in monetary policy undoubtedly played an important role in fostering the conditions that allowed the U.S. economy to surge in the 1990s." Other accomplishments that define Greenspan's leadership are: lowering inflation, preventing a stock market meltdown, and maintaining a strong U.S. dollar. In addition, Greenspan had the unique ability to foresee future events. For example, in the mid 90s when there was a productivity slump, although many thought otherwise, Greenspan predicted that the economy would change for the better. He stuck with his belief and within the next couple grew, the U.S. economy prospered. When asked about Greenspan's legacy, Brett Fromson from ABC News responded: "He is the ultimate guru, the Uber-analyst. No one else frames the economic trends with the authority he does. No one else is perceived to have his finger on the economic pulse like Greenspan. He seems to be able to hear the economic mood music like a dog hears a high-pitched whistle." Because Greenspan has been so successful, people hang on every word he says. Investors are confident that whatever Greenspan says, will happen and that he would never make a problem worse.

Personal Humility: Alan Greenspan "demonstrated a compelling modesty, shunned public adulation, and was never boastful" (Collins). While holding office as Chairman, Greenspan was known as a quiet, humble man: "His tone [was] soothing and the phrasing wonderfully euphemistic" (Fromson). For a man who controlled the successes of the economy, Greenspan never took any credit. He simply performed his job to the best of his ability. In addition, Greenspan "channeled ambition into the Federal Reserve and set up successors for even greater success in the future" (Collins). Although Greenspan could not appoint a successor (President appoints new Chairman), his legacy served as an example of what qualities the successor should possess. In fact, when Greenspan retired in 2006, many believed that the market would fall and his new successor would not be able to "fill his shoes." When he retired, Greenspan made sure that he left the economy in good shape so that his successor did not immediately face problems. In conclusion, for a man who many consider to be more powerful than the President, Alan Greenspan displayed many Level 5 Leadership qualities throughout his career that helped him become the well-known leader he is today.

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