Two central bankers set out markers of success

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Janet Yellen2 Bloomberg Janet Yellen, the chairwoman of the US Federal Reserve. Photo: Bloomberg

True grit is a vital ingredient for success. Advice on how to get on in life came last week from the person who recently took over one of the world’s top jobs.

Janet Yellen, the chairwoman of the US Federal Reserve Board, told New York University graduates: “There is an unfortunate myth that success is mainly determined by something called ability. But research indicates that our best measures of these qualities are unreliable predictors of performance in academics or employment.”

Among other factors, Yellen identified curiosity, grit and the willingness to listen as key to achieving. She quoted psychologist Angela Lee Duckworth’s view: “What really matters is an abiding commitment to work hard toward long-range goals and to persevere through the setbacks that come along the way.” Duckworth believes that resilience and consistency in their approach to life are what makes people truly gritty.

Gill Marcus, South Africa’s central bank governor, gave similar advice last year to a gathering of women at an event to commemorate the women’s march to Pretoria in August 1956. “There are no short cuts,” she said, talking about achieving success. “There is no substitute for hard work.” And she warned: “Don’t expect life to be fair. It isn’t. What matters is how you tackle the situation.”

The two central bankers also believe in the importance of speaking out.

“One aspect of grit that I think is particularly important is the willingness to take a stand when circumstances demand it,” Yellen said. “Such circumstances may not be all that frequent, but in every life there will be crucial moments when having the courage to stand up for what you believe will be immensely important.”

Grit and guts are essential if central bankers are to do their job, which is to keep prices stable so poor people can afford to buy what they need. But the instruments they use are often unpopular and misunderstood.

At home, Marcus routinely speaks out against two powerful lobbies – business and labour. In July 2010, when inflated executive pay was high on the agenda, she noted: “The behaviour of management is critically important. Outrageous increases or bonuses are simply not acceptable. Management has to lead by example.”

A year later she criticised executive pay packages after a report from PwC said the median increase for executives at large-cap companies listed on the JSE was 23 percent. Marcus is even-handed and regularly points out to trade unions that their pay expectations are unrealistic and that when wages rise faster than productivity, jobs are put at risk.

But leaders on both sides obviously lack another trait that Yellen cited as essential: a willingness to listen. And Marcus’s comments have largely fallen on deaf ears, with unions and management in the mining sector slugging it out on the platinum belt for four months of protracted non-production.

It seems what is lacking is emotional intelligence – the ability to understand the role of emotions in everyday decision-making.


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