A recent comment by movie on my essay about the silent debate mentioned the different styles of the two Presidential candidates. This provoked me to think about the two of them in terms of transformational versus transactional leadership. In  short we have two transactional leaders fighting it out over personalities and solutions. Neither seems to offer the transformational leadership this crisis so desperately needs.

Burns’ Definition of Transformational Leadership

It is ironic that the scholar who coined the term transformational leadership won a Pulitzer Prize for his biography of Franklin Delano Roosevelt, the transformational leader whose name seems to get repeated about once an hour in the current crisis and when they aren’t repeating FDR’s name they are drawing parallels with the Great Depression (BTW they have the wrong depression as an analogy, but more on that in an upcoming piece on the bailout mess). James MacGregor Burns wrote Leadership in 1979, a book in which he coined the term transformational leadership to describe the combination of authenticity and values. Burns wrote:

Transformational leadership is more concerned with end-values, such as liberty, justice, equality. Transforming leaders “raise” their followers up through levels of morality, though insufficient attention to means can corrupt ends… The test of leadership function is their contribution to change measured by purpose drawn from collective motives and values.

In 2003 Burns’ expanded his ideas in Transforming Leadership, which focused on well-known leaders such as Mahatma Gandhi, George Washington and Eleanor Roosevelt.  In the final section of the book, “The Power of Values,” Burns again stated the case he made earlier.

The only solution to would-be national leaders in democracies is to attempt to mobilize people behind values that powerfully express the wants, needs, hopes, and expectations of large numbers of people.

This sentence is followed by one that eerily anticipates what happened to Hillary Clinton:

It is in the interaction and likely conflict between general values and more local interests that the opportunity for mobilization appears.

But Burns is even more prescient, anticipating what became the buzzword of the 2008 campaign:

The stakes for understanding leadership’s crucial role in change-in grounded in values-could scarcely be higher. [My emphasis]

Bernard Bass’ Four Dimensions of Transformational Leadership

Burns’ writings on transformational leadership have been enhanced by the work of Bernard Bass, who has sought to define the psycho-social dimensions on transformational leadership. In 1985 Bass first developed models and measurements of transformational leadership behavior. He would summarize them as the four I’s: Idealized influence, inspirational motivation, intellectual stimulation and individualized consideration.

Bass wrote about “The Ethics of Transformational Leadership:

Leaders are truly transformational when they increase awareness of what is right, good, important, and beautiful, when they help to elevate followers’ needs for achievement and self-actualization, when they foster in followers higher moral maturity, and when they move followers to go beyond their self-interests for the good of their group, organization, or society.

Current Ideas of Transformational Leadership

Research on transformational leadership has continued to expand exponentially since Burns wrote his book. Literature from these studies focuses on the psychological traits, strategies, and behavior of transformational leaders, while books and articles apply transformational leadership to areas from nursing to school administration. I entered transformational leadership in one search engine and it spewed out almost 300,000 citations. Narrowing the search to scholarly journals reduced this to a mere 30,000. To show how absurd this has become, in early 2008 that infamous Internet source, Wikipedia, listed Mitt Romney as a transformational leader alongside Nelson Mandela, Steve Jobs and Colin Powell.

The most perplexing aspect of this research lies in its verifying for us something we intuitively know. One explanation for this no doubt lies in what may well be the major paradox of our times, for even as we yearn for transformational leadership we eye anyone preaching values with extreme skepticism. In our times, “values” has become a term carrying considerable baggage, including the 2004 election when the media sought to wrap it in the trappings of Christian fundamentalism.

How can one be serious about values when you remember that George Bush’s 2004 campaign slogan was “Upholding America’s Values?” The negative reaction to values by some Americans also stems from living in what I have termed the Era of Bad Feelings, where the raucous voices of talk radio and in-your-face political commentators like Rush Limbaugh coat principles with bitter-tasting vitriol.

FDR and the Crisis of 1932

While much of the talk about FDR and the Depression has focused on economics, very little of it has focused on values. What our media “historians” forget is that as the economic situation spiraled out of control during the 1932 election, much as it is spiraling out of control now, Franklin Roosevelt said little about programs or proposals. Because it was clear Herbert Hoover could not be reelected, a fair number of Democrats and FDR’s advisors urged him to run a “safe” campaign.

Unlike today, where both parties are responsible for the mess and Nancy Pelosi and George W. Bush have formed one of the stranger partnerships in American history to make it worse, in 1932 it was clear it was Hoover and the Republicans who were at fault. Curiously, Hoover proposed he and Roosevelt work out a bipartisan agreement to the banking crisis that was rippling through America, leaving ordinary citizens fearful that their life’s savings would disappear in yet another bank failure.

Hoover offers FDR a Deal

Yet, unbelievably Hoover insisted that the negotiations must be on his terms. According to Arthur Schlesinger, jr.’s account of the incident, Roosevelt felt that agreeing to Hoover’s terms would mean accepting “the whole major program of the Republican Administration” [are you listening Nancy "AIG" Pelosi?] and “the abandonment of the so-called New Deal.” FDR was so angry at Hoover he broke off negotiations even though others tried to bring the two men together to deal with the crisis.

Although this merits only a short paragraph in Schlesinger’s three volume history of the New Deal, it has taken on far greater relevance given the current crisis. Essentially, Franklin Roosevelt was willing to let the banking crisis continue until his inauguration because he felt to do otherwise would have been to abandon his principles.

Think about that for minute in light of the current situation and contrast Roosevelt’s action not only with that of those of our current Presidential candidates but with those in Congress. Banks were failing and people losing money, but Roosevelt felt sticking to principle was more important than some temporary fix that would have required him to submit to Herbert Hoover.

One wonders how our history might have changed had Roosevelt caved in under what must have been tremendous pressure and agreed to a deal with Hoover? In Leadership Burns writes:

Despite bitter criticism from the press and in Republican circles…Roosevelt stuck to his position.

The Importance of Values in FDR’s 1932 Campaign

Having been chided for running a lackluster campaign, Roosevelt, in part at the urging of his advisors, finally decided to give a speech on values. The result was the famous “Forgotten Man” speech. I have written at length about it before, so I will only quote a few lines here:

These unhappy times call for the building of plans that rest upon the forgotten, the unorganized but the indispensable units of economic power, for plans like those of 1917 that build from the bottom up and not from the top down, that put their faith once more in the forgotten man at the bottom of the economic pyramid. [My emphasis.]

This brings home to every city worker that his own employment is directly tied up with the farmer’s dollar. No Nation can long endure half bankrupt. Main Street, Broadway, the mills, the mines will close if half the buyers are broke.

:The reaction by some Democrats, most notably Al Smith, soon had Roosevelt deciding to play it safe again. This time it was reporters covering the campaign that prevailed on FDR, asking why he had not delivered any more speeches like “Forgotten Man” and challenging him to do so. This resulted in the other notable speech of the 1932 campaign, the Oglethorpe College Address.

The Oglethorpe University Commencement Address of May 22, 1932. Oglethorpe is significant in that it did not merely reaffirm what FDR had said in “Forgotten Man” it also laid out some of the main principles of what would become the New Deal.

Roosevelt advocated “a wider, more equitable distribution of the national income” and stated, “the reward for a day’s work will have to be greater than it has been, and the reward to capital . . . will have to be less.” The speech ends by proposing the experimentation that would become the hallmark of the New Deal:

This country needs, and unless I mistake its temper, the country demands bold persistent experimentation. It is common sense to
take a method and try it. If it fails, admit it frankly and try another. But above all, try something.

While “Forgotten Man” came to define Roosevelt’s candidacy and become synonymous with the New Deal, Oglethorpe is important because it came at a time when people were wondering whether FDR really believed the values he had so forcefully and eloquently articulated in “Forgotten Man.”

Note that in neither of these speeches did Franklin Roosevelt allude to any program he had to solve the financial crisis. In fact, as we know, he did not have one! What he did have was two things: a set of core values and a dedicated group of advisors–the so-called “Brain Trust”–that was bursting full of ideas.  In short, FDR was a transformational leader who exemplified both Burns and Bass’ importance of values.

Trying to Solve the Current Crisis with Transactional Leadership

In the current crisis it appears what we have is not transformational, but transactional leadership. Burns defined transactional leadership in bargaining terms:

Such leadership occurs when one person takes the initiative in making contact with others for the purpose of an exchange of valued things. The exchange could be economic or political or psychological in nature.

A leadership act took place but not one that binds leader and follower together in a mutual and continuing pursuit of some higher purpose.

Pragmatic, transactional leadership requires a shrewd eye for opportunity, a good hand at bargaining, persuading, reciprocating.  Reform may need these qualities, but it demands much more.

Fear Itself

And so does our current crisis. Reports across the country reinforce again and again that people are fearful. I don’t know about you, but I am fearful, fearful my retirement will be worth nothing, fearful I may lose my home if the company that holds my mortgage goes under, fearful that friends, relatives, neighbors all face the same thing and if it doesn’t happen to me it may happen to them.

Plans, programs and bailouts do little to calm my fear. The vessel we call America is being tossed in stormy seas and it seems obvious we are taking on water and need to bail. My son had an interesting analogy when we talked on the phone the other day: he said we were all afloat in a leaky boat that was dangerously close to sinking and we needed the bailout to keep us all afloat.

He admitted that the leaky, creaky boat was built by both financiers and politicians, but right now we needed to just get the boat safely to shore and then we could deal with fixing the causes of the leaks. The problem with my son’s analogy, which has merit, is that it does nothing to calm my fears. Bailing a boat in a storm seems an obvious thing to do–a transactional solution–but it does not tell us how the captain of the ship or someone else proposes to navigate us safely to shore.

Our Yearning for Transformational Leadership

What we yearn for, as Franklin Delano Roosevelt recognized, is transformational leadership that tells us what compass points those in command of the ship will use to navigate the storm. In short, what principles will keep the ship afloat? I think this lack of principles is what people mean when they say no one seems to have any answers, no one seems to offer any consolation.

We all, of course, remember FDR’s famous “Fear Itself” inaugural, but what most people do not know was that throughout the time between his election and his inauguration Franklin Roosevelt demanded his advisors produce a bill that would go to Congress the first minute it was in session declaring an 80-day bank holiday. He then gave his advisors and Congress 80 days to figure out a solution, a solution that held true to the principles he outlined in “Forgotten Man,” the Oglethorpe Speech and his First Inaugural.

Bass’ Four Dimensions and FDR’s Bank Solution

Here we need to remember again Bernard Bass’ four dimensions of transformational leadership: Idealized influence, inspirational motivation, intellectual stimulation and individualized consideration. FDR put all these into practice when he gave his advisors 80 days to solve the problem.  Rexford Tugwell, one of the New Deal Brain Trusters, described Roosevelt’s style:

The President reigned in an informal splendor which shed its glow all over Washington.

In 80 days America had its banking and in 100 days the most remarkable series of legislation to ever come from the White House. Schlesinger describes the 100 Days:

By bringing to Washington a government determined to govern, Roosevelt unlocked new energies in a people who had lost faith not just in government’s ability to meet the economic crisis, but almost in the ability of anyone to do anything.

Burns defines what FDR brought to Washington:

The people and the new administration were in desperate need of intellectual leadership that would define the economic failure, set new directions, and above all advance a new definition of liberty.

Towards a New Definition of Liberty

Burns goes on to describe how Roosevelt would eventually encapsulate this idea of liberty in an Economic Bill of Rights:

Under which a new basis of security and prosperity can be established for all.

Burns goes on to argue:

The specifics–jobs, food, clothing, homes, medical care, education, social security, all to be secured through the help of government if necessary–flowed naturally from this new definition of liberty.

THIS is the kind of transformational rhetoric today’s crisis demands and which no one in any leadership position seems to offer. There is an informal myth in America that times of crisis seem to call forth great leaders. Let us hope that holds true today and in November.

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