Former Yahoo! CEO Carol Bartz talks to Stephen J. Dubner about women leading in crisis. photo courtesy of Wikimedia Commons
Glass ceilings and cliffs: Carol Bartz, Indra Nooyi, & more on being a female CEO
Everyone knows about the glass ceiling – but what about the glass cliff? It’s the idea that women are more likely to be appointed to lead companies in times of crisis. And because of that, they are often set up to fail.
Today’s second-to-last episode of Freakonomics Radio’s “The Secret Life of CEOs” series looks at glass ceilings and cliffs. The show talks to experts (including some of the CEOs themselves) to discover why only 5.4 percent of Fortune 500 companies were led by women as of early 2018 — and what can be done to fix it. What Carol Bartz says reflecting on being fired from Yahoo could apply broadly: “I do not believe that that would have happened to a man.”
Below is the full episode along with highlights:
PepsiCo’s Indra Nooyi on the response to her as a female CEO:
When you become a C.E.O. and you’re a woman, you are looked at differently. You know whatever you say, people do — they say things like, ‘Well you know, a guy C.E.O. wouldn’t have said that.’ You are held to a different standard, there’s no question about it.
Researcher Michelle Ryan describes experiments asking average people how they would select a company’s next leader:
What we found was when everything is going well — so when share price was going up, or when everything is hunky-dory — we found, they were almost 50-50 likely to choose the man or the woman. But when things were going badly — when there was crisis on the horizon, where there’d been criticism, and where there was risk involved in the leadership position — they almost exclusively chose her. They’re more likely to choose a woman. So we can conclude that that there’s some sort of preference for women when all is going badly.
Former Yahoo! CEO Carol Bartz on why she thinks women are more often appointed to lead companies in crisis:
Listen, it is absolutely true that women have a better chance to get a directorship, or a senior position, if there’s trouble. Mostly because a lot of times men don’t want the job. And so they go for the Tier 1 man on their list, and they take a look and say, “I wouldn’t touch that with anything.” And then they get to the Tier 2 man. And by the time they get to the Tier 2 man, some woman has finally popped up in their mind. And she’s so happy that she has a chance to have a senior position as a director or a C.E.O. that she takes it.
Dubner: That even if the circumstances are prima facie, suboptimal, yeah?
Bartz: Yeah, exactly. And I mean, and I think it’s good that she takes it. I have no problem with that. But it’s not that all of a sudden the boards wake up and say, ‘Oh, there should be a female here.’ They do that sometimes, because it’s easier to hide behind: ‘Well, of course that failed, because it was female. What could we have been thinking?’ But it’s still a pretty nefarious way of thinking.