Will Jill Come Tumbling After?

by Paige Churchman (New York City)

Have you heard of the glass cliff? It seems that, when a company is ailing, it is more likely, if ever, to tap a woman to lead. So just when a woman thinks she’s finally broken through-that at last the playing field is level-she may actually be on a dangerous precipice. More so than a man would be. Men, who are more likely to be chosen to lead successful companies, aren’t scrutinized as harshly and are less likely to be blamed for failures.

It was Michelle K. Ryan and S. Alexander Haslam who put a name to this phenomenon. In 2005 they published “The Glass Cliff: Evidence that Women are Over-Represented in Precarious Leadership Positions.” The two University of Exeter researchers wanted to find out if having women on their boards really “wreaked havoc on companies’ performance and share prices” as Elizabeth Judge said in a London Times article. Studying the FTSE 100, Ryan and Haslam found was that the said companies “had experienced consistently poor performance in the months preceding the appointment” of a woman to their boards and that share prices actually showed a “marked increase after the appointment.”

USA Today has been studying women CEOs and share price since 2003. The first two years, the female CEOs outperformed the males. But in 2005 (the year Carly Fiorina was ousted), things began to change, with women’s companies slightly underperforming those led by men. In 2006 and 2007, men and women CEOs ran even, judged by share price, and “2008 knew no gender in its devastation.”

Why Pick a Woman in Times of Crisis?
Social psychologists Susanne Bruckmüller and Dr. Nyla Branscombe decided to strip away some of the distractions of real life cases (qualifications, personalities, etc.) and study what goes on in people’s heads when they pick business leaders. “We think the replication in the lab tells us that at least part of the phenomenon may be based on people’s stereotypes,” Bruckmüller told The Glass Hammer. The researchers found that:

• When Companies Are Already Female-Run, There’s No Cliff. The gender of the current managers and board members made a big difference to research participants. For the male-run companies, the glass cliff pattern prevailed, with participants picking men to lead when the company was doing well and women when the company was faltering. But when asked to select leaders for companies where female leadership is the norm, participants showed no gender bias. Very interesting, says Bruckmüller, “because it hints that the glass cliff has something to do with the way most organizations have been structured and often are still structured today: with an over-representation of men in leadership positions.”
• People Look for Different Leadership Skills in a Crisis. When research participants picked leaders, they were asked for their impressions of potential candidates. When a company was in crisis, people preferred the candidate who they suspected to have more stereotypically female attributes (cooperation, communication skills, the ability to encourage others). In times of business success, people preferred a candidate who they thought had more stereotypically male attributes (competitiveness, decisiveness, a striving for power). Hmmm, a look at W and Obama certainly supports what she says. Bruckmüller feels that we can understand this phenomenon only if “we look at both sides of it¾why women are more likely to be chosen for leadership in times of crisis and why men are preferred in times of success.” The research goes on.

Is There a Glass Cliff in the US?
The Glass Hammer took an unscientific survey of at the 14 women CEOs of the Fortune 500 companies to see if they do indeed stand on glass cliffs:

• Angela Braly at Wellpoint (#33 of Fortune 500). Though Wellpoint was not in financial trouble when Braly took the reins in June 2007 (just weeks after Sicko was released), it is the largest health insurer in the US and clearly a target for healthcare reformers. Braly told Fortune, “A Senator told me recently: ‘It’s going to be a bumpy road, and you will be the shock absorber.’”
• Patricia Ann Woertz at Archer Daniels Midland ($52). ADM is transforming itself from “supermarket to the world” to the US’s leading producer of ethanol. Woertz, no stranger to male-dominated industries (30 years in the oil industry), told Fortune, “I’m outside the company, outside the industry, outside the family, outside the gender expectations.” Though ADM is doing well and she is leading the charge, that could change if ethanol loses its shine on Wall Street.
• Lynn Laverty Elsenhans at Sunoco (#56). Sunoco’s shares had fallen 52% in 2008, but in July the Board named Elsenhaus to fill the shoes of the retiring CEO, and shares began to climb. She is the second woman to head a major oil company.
• Indra K. Nooyi at PepsiCo. (59). Nooyi joined PepsiCo in 1994 because she wanted to make a difference in a company that was struggling. She became CFO in 2001 and is credited with turning the company around. She was made CEO in 2006. She’s doing it her way, talking about “performance with a purpose” and emphasizing healthful food and diversity of the workforce. She sings and goes barefoot in the office, and in 1980, fresh out of Yale, she wore a sari to an interview at Boston Consulting Group. They hired her.
• Irene B. Rosenfeld at Kraft Foods Inc. (63). When Rosenfeld became CEO in June 2006, food costs were rising and Kraft was loosing market share. Says Fortune, “she has to deliver digestible numbers at a time when dairy prices pressure sales of some key products.”
• Ellen J. Kullman at DuPont (#81). Kullman was appointed this month. A market headline from last month: “DuPont Paints Grim Picture.” With the shrunken economy, people aren’t buying houses or cars, and they don’t need the paints and other coatings that DuPont makes. The company is cutting costs, employees and whatever it can.
• Carol M. Meyrowitz at The TJX Companies, Inc. (#132). You might think that the US’s leading off-price retail business (T. J. Maxx and Marshall’s) would be sitting pretty in this economy, but Meyrowitz took over in January 2007 just after a huge security breach was announced. Hackers had snagged millions of credit card numbers of TJX’s customers. It cost the company about $200 million.
• Mary F. Sammons at Rite Aid Corporation (142). Sammons joined as president back in 1999 when the company was facing bankruptcy. She’s credited with reviving the company and became CEO in 2003.
• Anne M. Mulcahy at Xerox Corporation (144). When Mulcahy became CEO in 2001, Xerox was $15 billion in debt and was being investigated by the SEC for overstating its financial results. “Mulcahy emerged with one of the best comeback stories of corporate America,” says Fortune.
• Brenda C. Barnes at Sara Lee Corporation (#203). Sara Lee began 2005 with a massive restructuring, including divesting four of its businesses and replacing its CEO with Barnes. “I feel all the weight of the world,” she told USA Today at the end of her first week. She’s been successful in making the company leaner but now faces pressures from rising wheat and corn prices. “She employs leadership qualities such as consensus-building that are often attributed to women,” said USA Today.
• Andrea Jung at Avon Products, Inc. (#265). Jung became CEO in 1999, two years after she and Christina Gold had been passed over in favor of a male outsider with no experience in the cosmetics business. Jung finally replaced him a month after Avon warned investors “to expect disappointing financial results.”
• Susan M. Ivey at Reynolds American, Inc. (#290). In January 2004, Ivey became the first woman to lead a US cigarette company. She was seen as “the savior since the company was still reeling from the results of the Master Settlement Agreement,” says the Triad Business Journal .
• Carol Bartz at Yahoo! Inc. (#353). Bartz stepped into Yahoo’s lead on January 13, 2009, and, yes, Yahoo! was in trouble. The Economist says, “Her trials have turned her into a hardened, disciplined, occasionally ruthless, but often inspiring boss—exactly the sort of leader, it could be argued, that Yahoo! now desperately needs.”
• Christina A. Gold at Western Union Holdings, Inc. (#473). Gold had led a turnaround of Avon’s North American cosmetics business before moving to First Data to run Western Union. When the latter was spun off from First Data to become its own entity in 2006, Gold was CEO.

Is there a glass cliff? You be the judge, but don’t tell these CEOs. Alexander Haslam, co-author of the original study, told The Glass Hammer, “In our experience, senior women often tend to be oblivious to these processes (at least while they’re still in position) — possibly because they want to avoid casting themselves as victims, but also because they often understand such appointments as great opportunities (which is how they’ve been sold) rather than as potential nightmares. In light of our findings, this may be just as well.” Unless…

Unless Jill rewrites the nursery rhyme with herself in the lead. Or better yet, we balance the genders in those boardrooms and C-suites so nobody falls down and breaks her crown.