What Is the Glass Cliff? #infographic

What Is the Glass Cliff?

Businesses of all sizes have the same natural biases. Everyone has heard of the glass ceiling before, but what about the glass cliff? Frequently, when a company is going through a period of turmoil, women are appointed to leadership positions, when the risk of failure is highest.

In a 2005 study by Ryan and Haslam, it was revealed that high-level women employees are often promoted during a time of crisis. The women placed in these positions are set up to fail, as they are likely to be fired if the company doesn’t recover quickly. This phenomenon became known as “The Glass Cliff”. This problem isn’t exclusive to Fortune 500 companies. Businesses of any size are susceptible to these biases. Like any form of bias, the best way to move past it is to acknowledge and educate people about it.

A 2013 study by Alison Cook and Christy Glass found that the appointment of women CEOs traditionally followed poor company performance. In these situations, the company will use this appointment to signal a change in direction following a period of lower than expected sales or growth. To make matters worse, women CEOs are 45% more likely to be fired than their male counterparts.

Who are these women CEOs replaced by? Typically white men, a scenario Cook and Glass dubbed “the savior effect”. Why do so many high performing women accept these positions that seem almost impossible to overcome? As of June 2019, just 33 of the Fortune 500 companies have a female CEO. This amounts to 6.6%. Unfortunately, there isn’t a lot of opportunity for women executives in general. These positions although risky, provide the opportunity to have a big impact and change the course of a company.

The glass cliff is not just a theory, there are numerous examples of the phenomenon throughout history. In September 2011, Jill Abramson became executive editor of The New York Times. She was the first woman to hold this position in the 168 years of the paper’s existence. In less than three years she was let go, despite bringing in hundreds of thousands of subscribers through the Times’ paywall and consistent positive financial performance.

There were reports of Abramson being difficult and pushy, critiques rarely applied to men. Abramson was replaced by Dean Baquet, a managing editor at the Times. Carol Bartz was hired by Yahoo in January 2009, becoming the first woman CEO of the company. Bartz was immediately put in a tough position. In 2008 the company had laid off approximately 1,600 employees. Unable to change the fortunes of the struggling company, Bartz was fired two and a half years later, over the phone.

Timothy Morse, then CFO of Yahoo, was named interim CEO. It’s not all doom and gloom for women executives, however. Ginni Rometty has been Chairman, President, and CEO of IBM since 2012. Under her tenure, the company underwent a massive transformation, shifting from a focus on computers and operating systems to areas such as big data, blockchain, and artificial intelligence. In 2018, IBM received the Catalyst award for Advancing Women and Diversity in Business, the first tech company to win the award in 25 years.

There’s also Mary Barra, CEO of General Motors. Taking over in 2004, Barra became the first woman CEO of a major global automaker. Her leadership has seen GM become a worldwide leader in equality, ranking first in the 2018 Global Report on Gender Equality by research firm Equileap. After you shatter through the glass ceiling, use these tips from Fundera to avoid falling off the glass cliff.

What Is the Glass Cliff? #infographic

infographic by: www.fundera.com

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