The Glass Cliff: 7 Ways Female Business Leaders Can Avoid Falling Off (infographic)

Many women are familiar with the glass ceiling, or the invisible barrier that prevents them from climbing to the top at companies across the world. As if that wasn’t hard enough, women in business are then faced with a new dilemma, called the glass cliff.

The glass cliff phenomenon describes how high-performing women promoted during times of company turmoil, when risk of failure is the greatest. Once women take the lead, they are more likely to be challenged by male investors on the board, given less time to turn things around than their male counterparts, and 45% more likely to be ousted.

The Glass Cliff Discovery

In 2004, psychologists Michelle Ryan and Alex Haslam uncovered the glass cliff phenomenon. Their research was in response to an article that stated the London Stock Exchange would be better off without women. This article, published by the U.K. Times, argued that after looking at research on the London Stock Exchange, companies with women on the boards were performing worse.

Ryan and Haslam were unconvinced of that article’s claim, so they took a deeper look at the numbers. Here, they discovered that the reason women were on boards that were underperforming was because women were only offered positions on boards with companies experiencing downturn.

Since that initial research study in 2004, there have been additional studies that backed up their findings. In 2014, Alison Cook and Christy Glass found that female CEO appointments usually followed low company performance on the list of U.S. Fortune 500 companies. These appointments came after the company’s desire to change course following declining sales, a scandal, or low growth.

The Savior Effect

Once a woman takes over a role and inches closer toward the glass ceiling, her ouster is usually triggered by something called “the savior effect.” This phenomenon sees a company take a new direction only to revert back to the old tride and true methods when the new direction doesn’t pan out as expected.

Women who are ousted are almost always replaced by a white male “savior”. The board room breathes a sigh of relief as a man steps back in to run the show.

The Glass Cliff Today

Over the last 50 years women have been working hard to close the gender gap in business. Women earn more graduate degrees than men, secure business loans to launch their own startups, and work hard to shatter the glass ceiling and climb up the corporate ladder at the world’s top companies.

The glass ceiling deters many women in business from pursuing their career ambitions. One study revealed that, when starting their careers, 43% of women are determined to make it to a top management positions - but after two years, only 16% of women believe they’ll ever make it to the top.

Once that 16% of women do shatter this proverbial glass ceiling, they are often times introduced to the glass cliff. Despite the fact that the glass cliff phenomenon was uncovered 15 years ago, is still prevalent in many large companies and small businesses. In fact, the number of women who lead top Fortune 500 companies has actually declined over the past 15 years – today, only 4.8 percent are led by women.

Despite these low numbers, research shows that women are just as effective at leading companies as men. Women CEOS are often seen as inspirational and outrank men in 11 out of 12 emotional intelligence categories. They also excel in problem-solving and are better at identifying and pursuing growth opportunities than their male counterparts.

Real Life Examples

One high profile example of the glass cliff is Carly Fiorina, who would later run for President in the 2016 election after being ousted as CEO at Hewlett-Packard. Fiorina was appointed CEO at Hewlett-Packard as a transformational leader that would take the company in a new direction after low performance. She helped jump stock prices up 6.5% until the dot-com bubble burst. After she made a controversial decision to lay off 30,000 employees and pursue a merger, she became involved in a fight with board member Walter Hewlett and was subsequently fired. Upon reflection, the Hewlett-Packard board acknowledged that her merger would have been the right decision.

Some other high-profile examples of the glass cliff include Jill Abramson formerly of the New York Times and Carol Bartz, formerly of Yahoo.

Not every female leader falls off the glass cliff. Take Mary Barra of GM. She’s first on the Women CEOS of the Fortune 500 list and has a salary of 21.9 million. She’s the third highest paid CEO in the world and she’s also the first female CEO of a major global automaker.

Her high salary isn’t the only thing worth celebrating. She has also earned GM the number one ranking on the 2018 Global Report on Gender Equality. GM is one of only two global business companies that reports no gender pay gap!

Ginni Rometty is another example of a high-achieving woman who has avoided the glass cliff. Rometty is Chairman, President and Executive Officer at IBM since 2012. She has led IBM through its most significant transition period in history and she has been committed to IBM’s diversity and inclusion programs. After pioneering an initiative aimed at helping women return to the workforce after maternity leave, IBM earned the prestigious Catalyst Award for advancing women & diversity in business. IBM is the first technology company tow in the award in the past 25 years and they’ve won it four times!

Although the glass cliff is a tough pill for women in the workplace to swallow, the best way to avoid becoming another statistic is to prepare. Here are seven actionable tips you can take to avoid falling off:

1. Know Your Company Numbers: You don’t want to discover your company is performing poorly after you’ve accepted a promotion. Always stay on top of your industry trends, company standings, and issues impacting your field so you don’t get surprised with a big mess.

2. Include Risk in Your Salary Negotiations: If It’s a risky career move, say so – and negotiate the risk in your salary negotiations. The extra money will cushion the blow if you do end up falling off the glass cliff. Men are 4x more likely to ask for a raise than women, so you’re doing yourself a disserve if you don’t negotiate.

3. Define Success Before You Accept: Have the board set your performance standards before you accept the position, that way you can evaluate what the job expectations truly are. Have them include a timeframe for every expectation so you can decide if it’s within reason or if your position is set up to fail.

4. Use Your Unique Position to Your Advantage: Despite what the U.K. Times said in 2004, women make great leaders. Use your unique perspective to your advantage as you lead! Women outrank men in 11 out of 12 emotional intelligence categories.

5. Believe in Yourself: It’s better to make the wrong decision than no decision at all, so trust your gut when you take the lead. Decisiveness, rather than results, makes you 12x more likely to be considered a high-performing executive.

6. Build a Network: As a woman, you know the importance of getting different voices in the room! Make friends in other departments and listen to what they have to say about your company’s processes. This will help you evaluate problem areas when you do take the lead and come up with quick fixes.

7. Don’t Be Afraid to Walk Away: If you evaluate your offer and the risk is too great, don’t be afraid to walk away. It’s much harder for ousted women CEO’s to get hired again at a top position, which is another risk factor you should take into consideration before you accept.

Check out our infographic from Fundera below for more ways to navigate the glass cliff.

7 ways to navigate the glass cliff - infographic

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