What is the glass cliff, and why do so many female CEOs fall off it?
The glass ceiling is notoriously hard for women in leadership to shatter, but there’s another phenomenon that the few women who do break the glass ceiling face: the sharp precipice known as the glass cliff.
You’re forgiven if you’re not familiar with the term, because it’s a relatively new addition to the workplace vernacular. Coined in 2005 by Michelle Ryan and Alex Haslam of the University of Exeter, it was a response to a report in the U.K.’s Times that contended “corporate Britain would be better off without women on the board” after analyzing the performance of 100 companies on the London Stock Exchange, and concluded that those with the most women were underperforming.
The researchers weren’t convinced of these findings and conducted their own study of the same set of companies. Their report revealed that during a period of overall stock-market decline, women were appointed to boards more consistently when those companies experienced bad performance in the preceding five months. “These results expose an additional, largely invisible, hurdle that women need to overcome in the workplace,” they write.
In other words, women can rise to leadership, but when they’re brought in to turn things around during dire times, they have to bear the blame if things don’t go well. So while they’ve managed to break through the glass ceiling, they’re then pushed off the glass cliff.
That prompted other studies attempting to prove out this theory. One, in particular, took it a step further. Researchers Alison Cooke and Christy Glass of Utah State University analyzed all CEO transitions in Fortune 500 companies over a 15-year period with an eye toward the leadership tenure of women and racial and ethnic minority CEOs.
“Consistent with the theory of the glass cliff, we find that occupational minorities—defined as white women and men and women of color—are more likely than white men to be promoted to CEO of weakly performing firms,” they write. The length of their tenure wasn’t all that different than white male CEOs, but they found that these leaders were more likely to be replaced by white men.
The psychology of what predicates the positioning of women leaders in times of crisis is complex, but ultimately not too challenging to understand. According to another study, crisis management is nearly always tied to changing the entire way leadership is operating. If a man was previously in the role, the most radical shift would be to install a woman chief to lead the company in crisis away from the traditional way it’s been managed previously. This visible break not only signals a new way forward but also plays into gender stereotypes.
The idea of a “female advantage” in these situations comes from research that found women self-report a different type of decision making than their male counterparts. Women say they’re more democratic, participative, and consensus seeking, traits that are more associated with managing through change. Men, on the other hand, are associated with stability. This more closely ties women with leading during times of crisis.
This bias runs deep. Indeed, another academic study asked participants to select a male or female leader with identical qualifications. When the company was doing well, 67% chose the man, and in times of crisis, 63% elected to have the woman lead.
The glass cliff scenario is furthered when the company in crisis needs a leader with people management skills but doesn’t require someone to be a particularly aggressive decision maker. This passiveness and lack of agency reinforces gender stereotypes and sets the female leader up for a high-risk situation because her hands are tied and she’s not able to actively improve the company’s situation.
The real-world scenarios
Women have fallen off the glass cliff in a wide variety of sectors, including politics.
Two separate reports from European academic researchers reveals that this most often happens in right-wing parties. One studied U.K. general election results from 2001, 2005, and 2010, and another analyzed French elections, and both found that each country’s conservative party tended to support female and minority candidates when conditions weren’t favorable for them to succeed. On the more progressive side, this didn’t happen. The implication is that conservatives are deliberately choosing to put women and minorities in these no-win situations in order to have them fail and support the status quo of having white men in power.
In the corporate world, there is a cadre of commanding women who’ve taken the CEO reins, only to fall (or be pushed) off the glass cliff. Carly Fiorina, then at Hewlett-Packard, and Pat Russo of Lucent (later Alcatel-Lucent), are two of the more recognizable names.
Fiorina’s six-year tenure at HP coincided with the massive layoff of 30,000 workers following the acquisition of Compaq as well as the bursting of the internet bubble. She was ousted in 2005. Russo’s resignation in 2008 followed a period of intense trials including industry competition, rising costs, and cultural clashes after the 2006 merger of the U.S. and French companies.
That year, other female executives fell off the cliff including Morgan Stanley co-president Zoe Cruz, VMware CEO Diane Greene, and PepsiCola North America chief Dawn Hudson. More recently, we watched tech’s golden girl Marissa Mayer step down from Yahoo after a series of mishaps and missteps, including a massive data breach.
Watching and waiting
Thought leaders are standing by to see if the likes of British prime minister Theresa May or GM’s Mary Barra might be the next to take the tumble.
For her part, May became the second female prime minister in the country to take up the unenviable task of leading her constituents through the troubled waters following Brexit and the resignation of her predecessor. As Michelle Ryan, one of the researchers who originated the term glass cliff, put it, “Whose reputation is going to be permanently tied in the country’s collective memory? He’s exiting off stage pretty quickly. He may have caused it, but she has to fix it.”
Mary Barra was installed as the embattled car manufacturer’s first female CEO and very quickly became embroiled in the controversy concerning seven recalls affecting 4.8 million automobiles that were sold before she ascended to the top role.
Barra isn’t the only one being watched and baited. A New York Times report found that at least a quarter of the 23 women leading companies on the Standard & Poor’s 500 were battling activist shareholders in 2014 along with Indra Nooyi of Pepsi, Ellen Kullman of DuPont, and Meg Whitman of Hewlett-Packard.
A 2013 PwC report found that although the number of women CEOs at large companies is growing, more women leaders are forced out of the office than men (38% of female CEOs versus 27% of male CEOs in the last 10 years).
A bright spot
However, Barra continued to soldier on and was recently named one of the world’s best CEOs for turnarounds by Barron’s. So not all women fall off that proverbial cliff. In addition to GM’s CEO, there are some women who’ve risen to the top spot as well as to the occasion of leading a turnaround. Most notable is Phebe Novakovic of General Dynamic who took over in 2013 when the aerospace industry was hit with the one-two punch of declining private sales and lower military spending. Since then, she’s boosted operating profit margins to 13.5% last year from 11.7% in 2011, a move that pushed the stock up to nearly twice what it was when she took the position.
As it neared bankruptcy, Xerox’s board appointed Anne Mulcahy as CEO. She not only turned the company around, but then handed it off to Ursula Burns, the first African-American female of a Fortune 500.
Susanne Bruckmüller, a research associate at the University of Erlangen-Nuremberg, and Nyla R. Branscombe, professor of psychology at the University of Kansas who conducted the experiment to see which gender leader would be more likely chosen in times of crisis, found that Mulcahy’s example is one that suggests the glass cliff can be eliminated.
“We were especially struck by the finding that the phenomenon does not seem to apply to organizations with a history of female leaders,” they write in Harvard Business Review. “This suggests that as people become more used to seeing women at the highest levels of management, female leaders won’t be selected primarily for risky turnarounds—and will get more chances to run organizations that have good odds of continued success.”