These Women Faced the Glass Cliff--and Leveraged Their Experience to Become Successful Entrepreneurs

In 2009, she was offered the CEO role at Merrill Lynch Wealth Management and U.S. Trust and was tasked with turning around the business amid the mass exits of financial advisors as well as ongoing fallout from the subprime mortgage crisis. However, just before her two-year anniversary at the company, when Krawcheck felt confident that the company was gaining market share, she says she was "re-orged out."

Krawcheck is just one of many examples of the glass cliff, a term coined in 2005 by University of Exeter researchers Michelle Ryan and Alexander Haslam to describe the phenomenon where women and people of color are often put in C-suite or leadership positions at a business that is facing hardship, with the expectation that they will be able to turn it all around. If you've never heard of the term before, you haven't been paying attention. 

Just last Tuesday, Planet Fitness announced Colleen Keating as its new CEO starting in June. Keating will step up at a difficult time for the company: Sales have dipped 17 percent in the last year. In March, Boeing Co. chief operating officer Stephanie Pope was appointed as CEO of the commercial airplanes division. She faces the task of restoring consumer and commercial airline confidence as the company reels from the January catastrophe wherein missing bolts caused a door to blow off a 737 Max. Pope will also oversee the company's full contract negotiation with its largest union, Bloomberg Law reported. 

Female leaders at many other companies have faced similar circumstances, including Carly Fiorina of Hewlett-Packard, Carol Bartz of Yahoo, and Kate Swann of WHSmith. But for some women, the glass cliff has been a catalyst for entrepreneurship, prompting them to leverage their expertise within their own ventures and create positive change on their own terms.

Ryan and Haslam's examination of FTSE 100 companies was corroborated in 2014 by Utah State University researchers Alison Cook and Christy Glass, who analyzed Fortune 500 companies and came to the same conclusion about women in leadership positions.

"It's kind of a vicious cycle: You get your chance to lead a company, but you have to lead during a crisis," Glass says. "If you can't solve the crisis in a short period of time, you're often blamed for the crisis which preceded your appointment and replaced by a White man, thereby confirming the stereotypes that White women and men and women of color don't have what it takes to lead."

Glass and Cook called this the "risk tax" -- the idea that White women, and professionals of color, have to take a significant risk in order to make it into the C-suite. In their interviews, the two researchers found that female CEOs were willing to accept that risk, and precarious C-suite roles, because those promotions were so few and far between for them. 

The first time, she received a call from Sandy Weill, then CEO of Citi, who praised Krawcheck's leadership at investment management company Sanford C. Bernstein & Co and offered her a position as CEO at Smith Barney, Citi's equity research business. At the time, Citi was being accused of misleading investors, and its stock was rapidly declining.

Krawcheck believes she would never have been given the opportunity to run the business if it hadn't been for that scandal. "They never would have said, 'She's doing so well in junior branch management. Let's have her run the whole thing,'" she says. Krawcheck says she was kicked out of the role a few years later after pushing for moves that then-CEO Vikram Pandit "wasn't interested in."

Krawcheck says her second glass cliff encounter, at Merrill Lynch, "felt worse" because, as a woman, she was taught to play by the rules. "You put in the work and you have the right answers, and you do it right, and you get an A," Krawcheck says. "In business, I always thought that was the same thing." She says she felt the company's response was essentially, "Thanks for the turnaround. Now that you've done it, we're going to give it to... a 60-odd-year-old White man who'd never run a wealth management business before." 

Eventually, she realized that entrepreneurship could provide her with similar energy, adrenaline, and challenges as a high-profile C-suite job. In 2014, Krawcheck launched Ellevest with the goal of building and managing wealth for women. Last month, the company reached $2 billion in client assets under management.

However, research from Oxford University indicates that the glass cliff phenomenon extends beyond business to other job sectors. This was the case for Yasmene Mumby, the founder of The Ringgold, a Boston-based management and strategy consulting firm. In 2012, she accepted a volunteer position as co-chair of the Baltimore Education Coalition, a partnership of schools and organizations advocating for improvements to Baltimore schools.

Mumby knew the coalition's efforts were being widely covered by the media, and that any failure would be highly publicized, but she felt pressured to say yes when she realized a similar opportunity might never come her way. "When is [sic] a coalition of multisector partners, from schools, community organizations, and policy organizations ever come together to secure up to a billion dollars to rebuild schools across Baltimore City?" she recalls thinking. "So I said yes, fully aware that it was highly visible, highly risky, and woefully under-resourced."

Mumby says that while she was able to succeed in her role, she started to notice a pattern of other women being placed into risky leadership positions. In 2017, she decided to become her own boss and launched The Ringgold. Her consulting firm now serves clients such as the ACLU, the International Rescue Committee, and Bread for the World. Mumby declined to share exact annual revenue for The Ringgold, but says her firm works in the six figures. 

Former Reddit CEO Ellen Pao faced harassment and encountered numerous challenges during her time in the C-suite, which lasted only eight months. Her advocacy for change during that period ultimately led her to found Project Include, a nonprofit focused on promoting diversity in the tech industry.

Ashley Rudolph, founder of New York City-based consulting business Work with Ashley R, chose to channel her 10 years of leadership experience from working in the tech industry into her own venture in 2023. She is now a career coach who helps clients -- predominantly women and young adults -- climb the corporate ladder and achieve their career goals. 

For other women and people of color interested in embarking on their own entrepreneurial ventures, these women founders say it's important to recognize the unique challenges and opportunities that may arise from navigating the glass cliff. 

Rudolph recommends beginning by identifying your "Zone of Genius." Ask yourself, "What are you amazing at, and what makes you stand out from everyone else?" Rudolph says. "That could be a hard skill or soft skill. Once you identify that thing, that may be the thing that you can start a business on."

Once you land on a business idea, Rudolph says it's important to start talking to your network to help sharpen your pitch. It may also help you find key supporters and initial clients. But Mumby adds that aspiring entrepreneurs should be careful about evaluating this support system: "It's not a matter of, 'Oh, they say hi to me, and they're friendly.' No -- how have they demonstrated their support of you? How have they been either a mentor, sponsor, or partner?"

Next, Rudolph says, be deliberate about creating a feasible business plan -- as well as a schedule that mimics the structure you might be missing after leaving your 9-to-5 job. That could mean committing to a daily routine of reaching out to possible connections on LinkedIn, or filming the process of starting your business. 

Krawcheck advises prioritizing team diversity as you build your business -- "if you look for what correlates with strong company performance, it's diverse leadership teams" -- while Pao stresses the importance of building trust with employees. She says unlike her experience at Reddit, where she felt the board did not support her, she no longer has to second-guess whether colleagues have ulterior motives and can trust them to tell the truth.