Last Thursday, May 11th, Twitter CEO Elon Musk tweeted that he had selected his own replacement. Although he didn’t name names, he did say that *she* would be starting in six weeks. The next day it was revealed that Linda Yaccarino would be the next CEO of Twitter.
Many might be quick to point out that this is an example of a woman breaking through that pesky “glass ceiling,” but have you ever heard of the term “glass cliff”? This is the perfect opportunity to highlight what this term means and why you should keep it in mind with whatever happens next with Twitter.
What is the “glass cliff” and where does the term come from?
This term was first coined by two British psychology professors, Michelle Ryan and Alexander Haslam, in 2005. Their study examined the performance of FTSE 100 companies – a UK stock exchange index similar to the US’s Dow Jones or S&P 500 – before and after the appointment of a new board member. They found companies that were struggling in the months ahead of a new board appointment were significantly more likely to appoint a woman to the position than financially stable companies.
The authors concluded their findings by noting that “women are particularly likely to be placed in positions of leadership in circumstances of general financial downturn and downturn in company performance. In this way, such women can be seen to be placed on top of a ‘glass cliff’, in the sense that their leadership appointments are made in problematic organizational circumstances and hence are more precarious.”
Other studies have demonstrated this phenomenon, and that it wasn’t just women who were being placed on a glass cliff. A study published in 2013 examined CEO transitions of Fortune 500 companies over a 15-year period and found that women along with men of color were more likely to be promoted to CEO when the company was performing poorly. Several studies looking at political seats in the UK found that female and other minority candidates were more likely to be chosen to run for contested seats in Parliament when the seat was viewed as “unwinnable.” Even men’s basketball teams in the NCAA were more likely to promote a minority person to the head coach position of losing teams.
Let’s look at some recent examples – both successful and not:
- Carol Bartz was brought into Yahoo when it was struggling and then ousted after two and half years for not changing the company’s trajectory fast enough.
- Anne Mulcahy was named the CEO of Xerox when it was on the edge of bankruptcy and successfully turned it around.
- Ellen Pao was appointed “during a time of crisis” at Reddit and then referred to as the “interim CEO” for two years before being fired for “failing to lead.”
- Carly Fiorina was appointed as Hewlett-Packard (HP) CEO in 1999 when the economy was going through a severe downturn and HP was a “deeply troubled company.” Some believe her firing in 2005 may have been a reflection of a dysfunctional board rather than necessarily a reflection of her leadership ability.
- Mary Barra was brought in to lead General Motors after a faulty ignition switch was blamed for numerous deaths and caused a huge scandal.
What to look out for at Twitter
Musk had previously stated in December that “I will resign as CEO as soon as I find someone foolish enough to take the job!” AP reported that he had also previously tweeted that “No one wants the job who can actually keep Twitter alive. There is no successor,” and that a new CEO would have to “like pain a lot” to run a company that “has been in the fast lane to bankruptcy.”
It’s important to note that appointing a woman or minority to a failing company is a win-win for the company. Either the company fails, and their leadership can be blamed for the poor performance, or the company succeeds and the company gets to claim itself as progressive and diverse.
Additionally, Musk is not completely stepping away from the company and says his role will transition to Executive Chair and CTO, which has led many to wonder if that means a new CEO will begin their tenure without a real ability to lead.