By Janie L. Payne
As many women and minorities know so well, the glass ceiling is a metaphor for an invisible barrier that keeps a given demographic from rising beyond a certain level in a hierarchy. But, when women and minorities have broken through the glass ceiling, they’re often pushed off the glass cliff.
What is the Glass Cliff?
The term “glass cliff” was coined in 2005 by Michelle Ryan and Alexander Haslam, researchers from the University of Exeter who studied companies that comprise the FTSE 100 index listed on the London Stock Exchange to see what happened before and after men and women board members were brought on board. Their research findings concluded that during periods of overall stock market decline, firms that brought women to their boards were more likely to have consistently underperformed in the previous five months than those who brought men. Ryan further explained, “The glass cliff is a phenomenon whereby women (and minority groups) are more likely to occupy positions of leadership that are risky and precarious. This can happen when share price performance is poor, when facing a scandal, or when the role involves reputational risk.”
In June 2013, researchers from Utah State University, Alison Cook, and Christy Glass published research examining Fortune 500 companies over 15 years. Similarly, they reported that white women and men and women of color are more likely than white men to be promoted to CEO of underperforming firms. According to Cook, the glass cliff exists because white male candidates can afford to be more selective. At the same time, women and minorities consider the risky opportunity to be their only shot at a leadership role on the other side of the glass ceiling.
In 2016, Cook and Glass published additional research findings in The Leadership Quarterly of interviews from top executives at Fortune 500 companies that women who reached the C-suite took risky positions throughout their careers to be more visible and prove their leadership capabilities. These women characterized themselves as “turnaround artists.”
For some reason, visions of Wile E. Coyote and the Road Runner come to mind. The coyote repeatedly attempts to catch the Road Runner. Just as he thinks that he has the plan to catch the evasive bird in his grasp, he looks down only to realize that he has fallen off the cliff. After he goes over the edge, he falls into a canyon so deep, that his figure is eventually lost to sight. It always ends poorly for Wile, “Splatt!”
Examples of cliff dives:
Jill Abramson, the first woman executive editor of the New York Times, was fired after three years for her management style, which was considered “difficult and pushy” and hiring a lawyer to complain that her salary was not equal to that of her male predecessor.
In March 2012, Avon Products rejected an unsolicited takeover attempt by French beauty products manufacturer, Coty. Two weeks after the takeover was rejected, Sherri McCoy, a former 30-year executive at Johnson & Johnson, was hired as the CEO of Avon Products. In early August 2017, she was “terminated without cause.” Pressure from a shareholder activist based on significant loss in sales and shareholder value was cited as the reason for her dismissal.
Carly Fiorina was hired at HP during what she called “the worst technology recession in 25 years”. During her tenure from 1999 to 2005, she oversaw a merger between HP and rival company Compaq that resulted in the layoff of 30,000 employees. HP’s board later fired Fiorina in 2005.
Falling off the Cliff
For 14 years, Strategy& has examined CEO turnover and the incoming class of CEOs at the world’s largest 2,500 public companies. Their report for 2013 found that over ten years, 38 percent of women CEOs were forced out of office compared to 27 percent of men CEOs.
In 2007, while Mike Ullman presided over JC Penney as CEO, the company’s stock rose to a high of $61.93/share. When Ullman left in 2011, the stock price hovered in the mid-range of $23/share. Ullman was replaced by Ron Johnson, who had pioneered Apple retail stores. During his tumultuous tenure, Penney’s sales fell 25%, and the stock dropped to $18. Ullman agreed to come out of retirement to help the company rebuild itself after Johnson was ousted in April 2013.
When Marvin Ellison, who as executive vice president of stores at Home Depot, was credited for revitalizing the home improvement chain became president and CEO of JC Penney in November of 2015, the stock price was $8.15/share. Ellison, a black man, was tasked to bring the department store back from the brink of financial disaster (a glass cliff). In 2018, Ellison left Penney’s to head the home improvement chain, Lowes. During his tenure at Penney’s, the company retired $1.4 billion in debt, renewed and enhanced its revolving credit facility, and significantly strengthened the company’s financial position. Despite these successes, their primary business unit (women’s clothing) never revitalized, and the stock price sank to $2.00/share.
In 2018, Jill Soltau was appointed CEO of JC Penney during the 118-year-old company’s struggle to overcome a decade of bad decisions, executive instability, and damaging market trends. She was climbing the glass cliff. Soltau, the former president and CEO of Joann Fabrics, was the first female CEO of JC Penney. Today, the stock is worth 28 cents/share. A bankruptcy filing was made in May 2020, the final blow hastened by the coronavirus crisis. “Splatt!”
Reaping the benefits from a glass cliff experience
Fortunately, some women faced glass cliffs and excelled. Mary Barra began working for General Motors in 1980 at 18 years of age as a coop student. Rising through the ranks, Barra, an engineer, and Stanford MBA became the first female CEO of a major automaker. In 2014, when she was tapped for the position, GM was embroiled in a scandal over a faulty ignition switch in its vehicles blamed for dozens of deaths. During her first year as CEO, General Motors issued 84 safety recalls involving over 30 million cars. Barra would testify before the Senate about the faulty ignition switch. Ultimately, new policies were created to change the company culture by encouraging workers to report problems they encounter.
As CEO, Mary Barra’s vision and leadership have placed GM at the forefront of the next generation for vehicular travel, including long-range electric vehicles and automated driverless cars.
During my childhood, while watching movies, I always rooted for the underdog, the character who won against all the odds and circumstances to come out on top even though it looked like they could never win. Not surprising, as I have made career decisions, I have been drawn to assignments that were challenging. Assignments where I was brought in to turn things around, change an existing culture, or build processes and systems where none existed. Therefore, it is also not surprising that during my career, I have had some glass cliff experiences. I now see them as opportunities to learn and develop. Glass cliff experiences develop emotional intelligence, enhance the ability to problem solve, enable empathy in leading others, and foster tenacity and resilience.
So, while none of us would choose to fall off the glass cliff, if you do, realize it may be an opportunity to grow and prosper.
About Janie L. Payne
Human Resources Executive and Change Agent, Janie Payne has a strong business and operations background in multiple sectors. She has worked across sectors to include for-profit, government, and not-for profit domestic and international organizations. Janie is an innovator who combines the right mix of ingenuity, passion, personality, and resiliency with action orientation.