Chicago Booth Review Podcast Are Women Leaders Being Set Up to Fail?

Hal Weitzman: In 2018, the New York Times noted that there were fewer women CEOs at the US’s biggest 500 companies than there were CEOs named John, all of whom were men. Yet while Johns make up just 3.27 percent of the US population, women comprise more than 50 percent.

Five years later, the number of women CEOs now exceeds the number of CEOs named John. Women lead more than 10 percent of Fortune 500 companies, a figure that has almost doubled since 2018.

But many observers have detected a pattern: women are often appointed as leaders when an organization is in crisis, and in many cases, they’re not given the support needed to turn things around. This phenomenon has come to be known as the glass cliff. So are women leaders being set up to fail?

Welcome to the Chicago Booth Review Podcast, where we bring you groundbreaking academic research in a clear and straightforward way. I’m Hal Weitzman.

The glass cliff hasn’t just been observed in business. Among other areas, there’s also evidence of the phenomenon in education, where women are more likely to be given leadership positions in failing school districts, and in politics, where women are more likely to run in unwinnable contests; and more likely to be elevated to leadership positions during periods of political instability.

So what causes the glass cliff? To explain, we asked Thekla Morgenroth, a psychologist at Purdue University.

Thekla Morgenroth: Hello everybody. My name is Thekla Morgenroth, and today I’m here to talk to you a little bit about the glass cliff and what we found. So just to give you a background, the glass cliff is this phenomenon that women and members of different minoritized backgrounds are more likely to be appointed to leadership positions in times of crisis or when something isn’t going well, both in corporations but also in politics. So the idea that, for example, when a company is going downhill, a female CEO was appointed.

The term was first coined by Michelle Ryan and Alex Haslum in 2005 when they were reacting to this claim that companies with female leaders were performing worse than companies with male leaders. And what they found is that actually it’s not that gender of the leader predicts how a company will be doing, but rather the performance predicts who will be appointed.

And of course, if a company’s already not performing well after appointing a female or male leader, that’s not suddenly going to just change. And over the years, there’s been a lot of interest in, “Why is this happening? When is this happening? And what context is this happening? What groups is this happening?” And so at some point we decided, “Oh. It might be fun to do a meta-analysis to look at, ‘OK, is this an actual effect? How big is this effect? What are some of the factors that influence to what extent this effect emerges or doesn’t emerge?’” And so we did, and that was a pretty big project. It was probably -- this project took longer than my PhD. It was a very long process, very intensive, but also very rewarding because we learned a lot of stuff. And one of the things that I find particularly interesting is that there’s sort of, in the literature, been three main explanations for the glass cliff.

So the first one is that maybe this is just a result of bias. So maybe people are just sexist or men who are usually the decision makers in these contexts. Maybe they just don’t want women in good positions. And if they feel like, “Oh. This is kind of not an ideal situation for the new leader, maybe we’ll just appoint a woman and then she can fail, and we can sort of have her scapegoat or something like that.”

So that’s a kind of very malicious explanation or just it’s bias or sexism that leads to this. The second explanation is that maybe it’s about a different form of bias, but this idea that maybe it’s not that people think, “Oh, we’ll set up these women to fail.” But instead it’s just that people think, “Oh, women have the skills that are needed in times of crisis.” This has been termed the ‘think crisis, think female associations.’ So the idea that maybe when everything is on fire, a woman is just going to do a better job. And so there’s these stereotypes that, for example, women are better communicators, so maybe they can communicate with stakeholders, with people in the organization. So maybe it’s those kinds of things. Maybe it’s not a bias thinking that, “Oh, we’ll set up these women to fail,” but rather, “Oh, women will be able to actually turn this around.” And the third explanation is this idea that maybe if something isn’t going well, a company is going through a crisis, they need to signal to others, “Hey, we’re making changes. We’re fixing this problem. We’re doing something different.”

And so if the history of leadership is primarily male, which is the case for most organizations, then appointing a woman can signal, “Hey, we know this hasn’t been going well. We’re doing something different.” And sending that as a signal of change. And those have been the three main explanations in the literature.

In meta-analysis, you can’t always exactly look at those things. You have to use proxies to look for different patterns in the data. Because of course, different individual studies will look at things differently. And you can only summarize, you can only work with what’s out there and what has been published and what has been done, not just published work, but just what has been done. But we looked at different things to see which of these explanations find support in our data. And what is interesting is that we found pretty much no support for this idea that it’s the stereotypes of women that are kind of seen as beneficial in terms of crisis that is driving this phenomenon. We did find some, although mixed effects, but we found some support for the other two explanations, so bias. So, for example, the glass cliff is more pronounced in countries with lower levels of gender equality. And we found some support for the signaling change thing that it’s like, “OK, if this is a good signal for change, then maybe we’ll appoint a woman.”

And partially how we looked at that explanation and also this stereotyping explanation was by also looking at what racial groups are appointed to leadership positions in times of crisis. And so we know the different racial groups are stereotyped is differently feminine or masculine. So for example, East Asian people in particular, the stereotype is more feminine. Black people the stereotype is more masculine, this is particularly in the United States. And so if it’s about the stereotypical attributes that these groups might have or assume to have, then we would think that this effect would not hold for Black candidates or Black leaders, but it would hold for Asian leaders.

But if it’s just about showing, “Hey, we’re doing something different,” then there shouldn’t really be any variation across racial groups because most leaders in the past have been white. And that’s what we find. I want to emphasize that the number of studies looking at these effects of race are very small. Like, we don’t have many studies that compare the two. So these patterns should really be interpreted with caution. But we have some first indication that maybe it’s just about the stereotypically femininity or masculinity of candidates and more about signaling change, and it kind of can be anyone.

Now, why does this matter? I think this matters, and it continues to matter to understand this because women and other groups remain underrepresented in leadership positions. So it’s not suddenly changing. We see some progress, but the progress is very slow. And if women and other minoritized groups continue to be appointed to these positions in times of crisis, of course that means that they are less likely to succeed, less likely to be there long term. And then also people might look at that and be like, “Hey, saw how that was handled and how that company was going down after a woman was appointed.” So it can kind of reinforce this idea that women aren’t good leaders, that we shouldn’t appoint women to these positions, even if the reason why they were appointed wasn’t malicious. It wasn’t anything to do with setting them up to fail. It was really just like, “Hey, we need to signal something.” So even if there’s no negative reason for why we might appoint women to these positions, there can still be negative consequences. And so understanding the motivations—when does this happen, why does this happen—I think continues to be really important.

Hal Weitzman: In October, we convened a live discussion of the glass cliff with Chicago Booth’s Alyssa Rapp, who’s been a CEO of several healthcare companies, and Heather Spilsbury, Chief Operating Officer and Chief Marketing Officer of 50/50 Women on Boards, an organization aimed at achieving equal representation for women on corporate boards.

I began by asking Alyssa Rapp where she had seen the Glass Cliff in action.

Alyssa Rapp: So I took a CEO role when we moved back to Chicago from Palo Alto six and a half years ago for a local private equity firm. And it was an “eyes wide open” glass cliff. It was a company on life support, not literally life support, but it although it was a healthcare services company and it was a classic organ rejection moment for private equity. Private equity buys founder-owned business; private-equity firm inserts professional CEO; founders aren’t exited from the business, let alone gracefully; professional CEO clashes with founders, and what could be a J curve in private equity, where you have investment in order to invest in scale, infrastructure that will support scale, can also just be a financial cliff of its own.

So I was brought in to that circumstance specifically because I had entrepreneurial roots and a love of big challenging problems and I was ready to be a CEO again after I’d exited my startup, did advisory work for two years and we had just moved back and I liked the firm and they said to me very transparently, we don’t know if there’s a there, there, here because the PE partners that sponsored the deal had left the firm.

So spend the first 60-90 days assessing the situation and then if it’s not going to work, we’ll divest it and we’ll give you something else to run. If it’s going to work, or if there’s a path out, you will educate us. And the harsh reality was that after the 90-100 day listening tour and all the strategic thinking, any smart enterprising potential CEO would do, customers, team, all the stakeholders that matter, I thought that there was there, there. There was a value proposition that made sense in the marketplace, but it was not the company they had bought and it was not the value proposition against which they were operating. So then came in the work of the turnaround. So my experience with glass ceilings is I’ve lived it the hard way. My experiences were, though, that I went in eyes wide open and was extraordinarily fortunate to have attracted the team with the talent and the tenacity and the dedication to work with me to get the job done.

Hal Weitzman: OK, so as you say, you had all the support network, which sometimes isn’t always there.

Alyssa Rapp: I did, and I was also unapologetic when I walked in, which Heather will like to hear. It was an all-male board and I said, “I’ve run my own company for 10 years prior and there was gender equity on the board. That’s extraordinarily important to me, particularly as someone who started running companies in her twenties.” And I said, “I am willing to take this harrowing task on, but you will need to appoint two more women to be on the board and I have a couple recommendations and if these are amenable, I think they’d be wonderful, and if they’re not, I get it. You’ll come up with your own, you control the company, but that I put out as a table stake,” so I would not just have support on the executive team but at the board level and it made a massive difference.

Hal Weitzman: Thanks. Heather, what about you? What about your experience?

Heather Spilsbury: I don’t have any personal experience. And first of all, I just want to say thank you for being with us tonight. So great to see all your faces and anyone who’s joining also via podcast, thanks for spending the evening with us.

But I would say that there’s a lot of great examples about women who experienced this and I think to your point, without getting into the weeds about who we’ve seen in the media or who we’ve seen witnessed go through this, I think it is important to make sure that you do have table stakes and you go in with clear initiatives that you want to complete in goals and people are aligned with those goals and especially the board because to have the backing of the board is really important to have them in your corner because as the CEO, they’re your bosses in general, so is the chair of the board, so you’re reporting to them and if they’re not supporting you, then you’re easily exited out.

So I think that is a clear example of what you should do in those types of situations. Even if you know you’re going into a situation where potentially there is a problem that can’t be solved and you’re being put in this place, what are you living up to and what are those benchmarks that you want to make sure that you achieve doing that? And as long as you can do that and get to that goal, then you’ve done your job.

Hal Weitzman: OK, Thekla Morgenroth talked about three explanations for this phenomenon. One was bias, one was the idea that women will manage a crisis better and one was a sense of change, a change signal, and they focused in on the last one said, really, as far as they’re concerned, the evidence really suggests that’s the strongest driver of this phenomenon. I wanted to ask you, do those findings chime with your own experience, what you’ve seen or is there still something there to the idea that this results in part from bias and this idea that women can manage crisis situations more effectively? For example, there is some evidence, quite a bit of evidence that companies with more women in the C-suite are more profitable, Heather?

Heather Spilsbury: Yeah, I mean we have research too that backs it up. So if you have a more diverse board, typically the top Russell 3000 companies, the top 1000 that have a bigger market share, they have a more diverse board and many of them are gender balanced. So it’s really important that correlation because diversity does impact the way that your company operates, not only from a productive standpoint, but also from profitability and then workforce engagement.

So those are key aspects and I think we all understand that now. It’s just about educating those companies that don’t understand that quite yet. But to answer the question, I think we all have bias. So that’s something that can’t be ignored and I think as long as you’re self-aware that even if you go into a situation where someone doesn’t look like you or they don’t have the same experience, I think the key is that people need to start to connect on a real level of humanity where you say, I’m going to intentionally try and understand where this person’s coming from or understand how this culture operates if you’re serving on a board, to then get to understanding how people work and what they’ve been through because that opens up your entire world to being part of new experiences that you wouldn’t have otherwise been a part of.

So you have to look at yourself and say, I also have bias and it’s just inherent in everybody. You tend to gravitate towards people that look like you and have the same experiences and all of those great things. So even in the leadership standpoint or a leadership position, I would say that that exists. And so the way to break that down is just to talk about it like we’re doing tonight, is to understand where does that bias come from? Why are we operating that way? Why are we putting women in these situations or maybe thinking that they can solve that problem and why are we as women then taking that on too at the same time?

Alyssa Rapp: I agree with all of your comments. I think that Dr. Morgenroth is right on this idea that it’s a powerful market signal. It certainly was the reason I was brought in as a non-healthcare executive to a healthcare turnaround for a private-equity-backed organization. The boys were not getting along and the thesis was that strong leadership transcends industry. It was their thesis, it was my thesis, it’s why I took it on. I wanted to test the thesis and then do the work, and it worked and it was a strong signal and it was a strong signal internal-stakeholder-wise, externally with those stakeholders and so forth. I also came from a different part of the country, where having worked in Silicon Valley for the prior 10 years, and this was a low-tech business when I arrived in it, and I also needed to bring that level of market signal to the marketplace.

I don’t think that was laced in gender. I think it was a Silicon Valley executive coming to a low-tech healthcare-services business that needed a tech enablement throughline, which we brought to the table. So the market signal I think can be positive and powerful, and I have experienced that and would agree with Dr. Morgenroth there. I would disagree though if, I don’t know, if they went so far as to say that the women are less capable managers, but I actually believe that in a crisis, what are the skills you need? You need clarity of mission, vision, and purpose. You need to be able to rally and align people on that clearly that mission and vision and the values of which you’re going to be operating. You need to be able to get and garner exactly as Heather said, the support of the key stakeholders around the table from a governance perspective to back your mission, vision, and values.

And you need to be able to communicate it externally to the marketplace. If you are authentic and a woman doing that, you’re going to do a great job. If you’re a strong communicator and a woman, you’re going to do a great job. If you’re a great listener and a woman, you’re going to do a great job. And if you’re engaging with all of those stakeholders authentically and honestly, and as human beings, not people to be managed out or in, but human beings that you need to garner to make this thing happen, I do think those can be historically and with a lot of stereotype laced around it, traditionally feminine qualities that can be advantageous in a time of crisis.

I mean, Marissa Mayer, who graciously wrote the introduction to my book, who’s a very dear friend and is pretty publicly known as having led Yahoo through its turnaround and crisis, and there’d be an entire podcast I’m sure you could have with her on that, but she had her top executives at her home many a weekend during the hardest part of those times. I know, because we were pregnant with our children at the same time. While that was all happening, she pulled people into as far into her home to rally the troops to go forth and conquer and get almost the impossible done that no one had been able to do before her in getting Yahoo turned around and ultimately sold to another stakeholder.

So I think that those qualities that are inherently feminine can be real assets. I don’t know from a market signaling standpoint if they’re more powerful than the signal as a whole that there’s change afoot, and this idea that women can be scapegoated, of course that’s true. Anybody can be scapegoated. And so I think it’s incumbent upon you if you’re being interviewed for that type of opportunity to make sure that you’re not being set up for that kind of failure, whether you’re a man or a woman.

Hal Weitzman: OK, now there’s a very prominent case right now in the news that we’ll all know about that appears to be a kind of a glass-cliff situation, which is a X, formerly Twitter, which is being run by... Well, let me rephrase that. It’s, the CEO is Linda Yaccarino, but she’s being undermined apparently almost at every step by the owner of the company, Elon Musk. Do you have any thoughts on that particular situation? Alyssa?

Alyssa Rapp: I’m not well versed in it, and I have not been following X as much as I used to, so I’m going to defer to Heather and you might know more about it, given that you’re also based in California.

Heather Spilsbury: Well, I’m going to be honest. So I mean, you know what you’re getting into when you’re going to go work for Elon Musk. I mean, his personality is pretty adamant and how he operates and how he leads. So I think on this one, I would almost flip the question and ask why she took the role. And it goes back to what we talked about before, which is, and what Alyssa alluded to too when she took on that role too, is that you have to understand what you’re walking into. And if you understand what you’re walking into and you’ve agreed to it and you’ve agreed to the goals that you want to achieve while you’re there, then that’s one thing. If you feel like you’re being undermined by somebody who has the reputation of undermining people and going off on his own and creating his own rules, then you just have to prepare yourself for that.

And if that’s the type of environment that you want to be put into, then great. Then if that’s a challenge you want to take, then great, but know that the outcome may not be what you expected. So I think again, you have to be really clear and intentional about what it is that you want from this position, whether it’s leadership or C-suite or whatever stage you are in your career and where you’re going. And I think that’s really important because it sets the stage for how you then operate later, not necessarily that you’ll be left with a bad reputation, which in some cases women are right? But in others I think people see it as triumphant.

I’ll point to Rosalyn Brewer from Walgreens. She was exited out as CEO. She’s an incredible leader. She’s done incredible things in her career. I applaud her exit so much because on LinkedIn she wrote all the things that she accomplished while she was there, especially during the pandemic, and it’s like, Yes, she knew what she walked into, she was intentional about it, she had goals and she achieved them, and then she noted them, so she walks out with some grace and integrity no matter what the reason was, right?

We won’t ever truly know the full reason, but I think in general, we can all see that the healthcare sector is also flailing when you look at Rite Aid and CVS. So it’s not just Walgreens, it’s not just their problem, it’s a problem as a whole. So regardless, I think it goes back to, how do you want to lead? And so to answer that question, I think it’s really about what was she expecting out of that experience with Elon Musk and then in your career, be intentional about how you want to lead and what those goals are for you. And even if something does happen, you can still exit with some grace and integrity and hold your head high because it happens at public companies.

Alyssa Rapp: Oh, yes, and to your point, exactly, just a quick pit, quick dovetail, not speaking about Linda and an X per se or Elon Musk, but you also sometimes walk into situations where the wolf is wearing sheep’s clothing, where you think you’re dealing with someone who’s egalitarian values, diversity is not looking at you differently because you’re a 40-year-old woman and they are a male 20 years your senior, and not even anything nefarious or subversive in terms of harassment, just oh, of course we’re here equals, because we’re both CEOs trying to engage in a transaction, for example, and sometimes bias seeps out through that process.

You thought you were dealing with one person and you realize you’re dealing with someone else even if you thought you weren’t. And it’s in those situations, I think your advice is even more poignant, which is once you do know what... OK, in this case, perhaps someone did know what they were dealing with walking in, but if you didn’t know what you were dealing with walking in and someone or some people show their true colors, then what you do with it?

One of my mentors from Stanford Business School, Joel Peterson, has this famous line which has never failed me, which is, people show you who they are, it’s your job to pay attention. So someone’s showing you that bias, which they can in shockingly transparent ways, sometimes even in 2023. Then I say to myself, same on me if I didn’t listen and pay attention and do something about it and document to your point, Heather, what the goals were, what we were here to accomplish and hold head high and then exit stage left, not choosing to interact with someone like that again. Even if you walk in with the best intention, sometimes you don’t know what you’re dealing with, so you get into the situation.

Heather Spilsbury: True.

Hal Weitzman: OK, on that note, actually, this is very relevant to what I wanted to ask you about, which is the experience of minority women, Black women in particular. So there are currently just two Fortune 500 companies, SAIC and TIAA, that have Black women CEOs, but it was only a couple of years ago when so many organizations and companies sought out Black women for senior roles, many of which were ostensibly to “sort out” the diversity or lack of it at their organizations, and then many of those people found out they just didn’t have the political support or the resources or the time to address that issue. What are your reflections on those experiences? Heather?

(Spilebury) It’s a good question. I am going to point to the research that we have at 50/50 Women on Boards, which is, from a race and ethnicity standpoint, based on those who self-identify, women of color are not represented, there’s 7 percent of the board seats that are held by women of color in total. Black women, excuse me, hold 3.2 percent of those seats and then Hispanic women 1.3 I think, or 1.2, and then Asian is a little over 2, so like 2.3percent I think, if I have that number correct. But again, the numbers are low, and this is based on those, again, who self-identify. But if you look at the list of directors, it’s pretty clear that that is probably the percentage of women on public company boards. When you look at the Russell 3000, so there’s not a lot of women CEOs in general, there’s 7 percent women CEOs across the board across the Russell 3000 companies.

And so when you break that down by race and ethnicity, the numbers get even lower. And so from that standpoint to your question, I think women of color in general are underrepresented. And it’s unfortunate because we live in a time where we should have probably already surpassed that or crossed that hurdle. And people always ask us, why do you only focus on women? Because we’re not even there yet. We’re not even at gender parity yet. We’re talking about men and women and we support women and women of color, and we have benchmarks for 50 percent women on boards and then at least 20 percent of women of color on corporate boards. And if we’re talking about being at 29 percent women on boards and only 7 percent women of color, we’ve got a long way to go. And so I can’t speak necessarily to how Black women were appointed necessarily to CEO roles, but I do agree that I think that was out of the gate in 2020, a way to say we’ve diversified our company.

And that’s not where you stop. Diversity is a continual process, and it’s something that a company really needs to wrap their arms around and say, this is something we’re going to intentionally do and continue to do it. And by that they mean that they’re going to be inclusive and find ways to support these women too. And I think that’s what you were asking as well, if you’re not supported, you won’t succeed in any role.

So you have to be supported and you have to find companies that do value that. And again, to your point, some say it on paper that they value it, but then they really don’t when you get in there. So you have to be intentional about asking the right questions when you’re interviewing, asking the right questions of your leadership, pointing it out to leadership too is important because sometimes we don’t know. So you have to say something in a way that’s constructive to ensure that everyone’s reminded about the ways that they need to feel included or supported within their job or within their leadership role, or even on the board.

Alyssa Rapp: Yeah for sure, and I do think back to your point in your mandate and mantra, your organization having a seat at the table is table stakes, right? So my SPAC board, which is public and my CFO is a dear friend and worked together on and off for 20 years, she’s Chinese American, in her sixties, been a public company CFO before this and a private equity CFO and president before this. And then she did this latest gig with me. She’s phenomenal. She has all the right skills for the role, and she’s got all these benefits of being a woman and of Asian American descent. And our board has gender equity and all diversity on all dimensions that matter at the board and advisory board level. So I think composition does matter. It matters a lot. And then of course, the tone and values and respect and expectations of inclusivity and valuing people’s diverse viewpoints and having healthy debate and how that’s treated is of course, in a boardroom context, absolutely paramount.

I think to your question, how the challenge I have is that some of my close girlfriends who are Black women who are obviously in high executive positions, whether it’s finance or law or any other industry, what frustrates the dickens out of me is seeing them achieve these roles and then when they get there, them coming to me as a girlfriend and saying in one way, shape and form, they’re thriving and in another way, shape and form, they feel like they’re on an island and they’re given plum titles and plum responsibilities, but not to Heather’s point being truly set up for the kind of success they would need to be to just be a superstar in that role.

And I think that is probably... I wouldn’t say it’s what always happens, but it does happen. And so going in eyes wide open and making sure that we are all aware of the resources and support systems that need to be in place when we hire people into those roles and when we join teams with people in those roles to make sure that people are set up for success and not to your question figureheads or check boxes, that’s both unfair and unethical.

Hal Weitzman: That leads me nicely onto the last question I wanted to ask you which is, we’ve covered a lot of these bits and pieces, but just if I could get some quick bullet points from both of you, what would you advise someone who is facing a glass cliff situation? Alyssa, you said you shouldn’t necessarily say No. So what should they look out for? What questions should they ask?

Alyssa Rapp: In bullet form, I’d say mission, vision, values. Here’s what I believe my job is here. Are we aligned? Here are the resources I believe I’m going to need to be successful in this situation. If I’ve got a chance of getting this done and making it to the top of basecamp at Everest, so to speak, are you going to support me in doing that? And here are the people I believe I’m going to need roles, and/or the specifics to get this done and have buy-in on all of that because it is necessary and not sufficient to ascend. There will be windstorms and gusts and things you didn’t see happening. So you have all that in place. You may not make it still, but at least you’ve set yourself up for the possibility of success when trying to do something extremely challenging.

Hal Weitzman: And it’s when you’re appointed, when you’re being offered the position that you should ask all those questions…?

Alyssa Rapp: It’s too late after!

Hal Weitzman: Absolutely, Heather?

(Splisbury) I mean, the only thing I would add to that is also getting support outside. So if you do decide to take the role on, it’s really important to have allies to outside of that. So whether it’s an executive coach or somebody that you trust that you can go to for advice because you want to be able to talk to people outside of the company as well that are in your corner and that do support you.

Again, buy-in from the board is also important, but buy-in, I think, from other key stakeholders that are in that same industry or know what job you have at hand is relevant because you’ll need to lean on that. Being in a leadership role is really lonely, no matter who you are. And I think it’s because you’re set up to actually lead the company and corporation, so you don’t feel like you can actually lean on anyone else to be able to support you there, but you can. So you have to find outside resources that are there in your corner backing you up because it’s imperative for not only your mental health but your leadership capabilities and how you move forward and if you’re tackling situations that you don’t necessarily want to tackle internally.

Hal Weitzman: That’s it for this episode. To learn more, visit our website at chicagobooth.edu/review. When you’re there, sign up for our weekly newsletter so you never miss the latest in business-focused academic research. This episode was produced by Josh Stunkel. If you enjoyed it, please subscribe and please do leave us a 5-star review. Until next time, I’m Hal Weitzman. Thanks for listening to the Chicago Booth Review Podcast.