Company in Crisis

Marissa Mayer Stares Down ‘Glass Cliff’ at Yahoo

Yahoo’s new CEO is widely admired. But why is it that women tend to get tapped for top jobs only when the company is in crisis? By Nancy Hass

Ramin Talaie / Corbis

When it was announced Monday that Marissa Mayer, Google’s wonky-yet-glamorous top female executive, would take over as CEO of Yahoo, there was much rejoicing throughout the land. At least throughout the land of those who see Mayer’s new gig as a step toward gender equity.

But others wonder if, instead, Mayer, 37, who was famously “employee number 20” at Google, is headed toward a savage plunge off the “glass cliff.” That’s the term coined in 2008 by two British researchers at England’s University of Exeter for the tendency of troubled organizations to choose female leaders in times of acute crisis. While only four percent of the CEOs of Fortune 500 companies are women, a disproportionate number seem to have in recent years been brought to lead deeply roiled organizations. The classic examples are Sunoco, which hired Lynn Elsenhans in 2008 after profits plunged (she left last year after shutting down the multinational’s refining business and slashing several thousand jobs), and Hewlett—Packard, which hired eBay veteran Meg Whitman after a long downturn that included the fall of another female CEO, Carly Fiorina, and a sexual scandal involving her male replacement. Michelle K. Ryan and S. Alexander Haslam, the British researchers, surveyed the 100 top public companies, and discovered that after a period of consistently bad financial performance, companies were more likely to appoint women than men to their board of directors. When women are recruited at times of crisis, the deck is stacked against them, says Haslam, and often the companies continue to slide. “The data are pretty incontrovertible. These are often impossible situations where it’s hard to imagine anyone can succeed.”

While Mayer, with her gleaming smile, hardcore tech background and stellar track record in 13 years at Google is largely considered one of the brightest lights in Silicon Valley of either gender, Yahoo, founded in 1994, is to put it kindly, flickering.

Google and Facebook have rapidly overtaken the once-mighty digital portal, and things have been particularly dreary since 2008 when Jerry Yang, the company founder rebuffed as too low a $44 billion acquisition bid from Microsoft (three years later, its market capitalization was half that). At that point, Carol Bartz, the former CEO of Autodesk, took over as CEO—another example of a beleaguered company recruiting a woman as savior. But the board fired her in September of 2011 when results didn’t improve. The clumsily handled dismissal (she was fired over the phone) led to her hurling invective at her bosses in a way rarely heard in the C-suite. There have been two short-lived CEOs in the year since her firing; one, Scott Thompson, who laid off 12,000 workers, left earlier this year after he was accused of embellishing his resume.

Why do foundering companies tend to bring in women when the going gets rough — and why do women accept such treacherous assignments? The reasons are complex, experts say.

According to the clinical psychologists

Susanne Bruckmüller and Nyla Branscombe, in times of crisis, people choose women leaders because they believe that such stereotypically male characteristics as intransigence and competitiveness won’t help in a turnaround. In Bruckmüller and Branscombe’s 2010 study, 119 men and women were more likely to select a fictitious female candidate to take over a made-up company if it was describe as being in crisis, and its previous three leaders had all been men. For those told that the previous managers had all been female, the glass cliff disappeared; they were just as likely to select a fictitious male candidate to take over the troubled firm as they were to choose a woman. “It’s more that there’s a rejection of stereotypical male characteristics than there is an embrace of stereotypical female characteristics,” says Bruckmuller.

Boards of troubled companies may also wind up with a female CEO because women, even profoundly gifted ones, may settle for the job, says Haslan. Men may refuse the challenge of trying to right a ship on the verge of capsize, preferring to wait for an easier test. “It’s possible that boards figure in that they can scoop up a supremely talented woman more easily than a man of that stature,” he says. “If they had to chose a man, they might have to lower their expectations because the opportunity, frankly, wasn’t very attractive.” Men, he says, are “much more likely to get the cushy jobs.”

For Mayer’s part, she has been said only that she is confident she can make Yahoo’s services “even more innovative and inspiring in the future.” Few people in Silicon Valley or on Wall Street dispute Mayer’s savvy—in managing people or marshaling ideas. “It’s pretty hard to overstate her impact,” Google’s executive chairman, Eric Schmidt, told Glamour magazine in 2009. She might have waited for a CEO spot in a less troubled company than Yahoo, but that could have taken years or never happened at all. Some Silicon Valley observers have speculated that it made sense for her to take the job because she may have topped out at Google. “The CEO job at Yahoo may not be a great job or a doable job, but it’s the C-suite,” said a female CEO at another Fortune 500 company.

As for how Mayer’s career might be affected if she is unable to produce the results Yahoo’s board expects, as were the other four CEOs who preceded her, Haslam said there is no research yet on how such high-profile failures affect the trajectory of female executives. Bartz is still unemployed, but she is more than 25 years older than Mayer. Sunoco’s Elsenhans, 55, hasn’t found a job since she was let go in February. “There’s not a big enough sample yet to know if these CEOs are now thought of as damaged goods any more than their male counterparts are,” says Haslam.

Mayer may herself wave away the idea of sexism in corporate America or give much credence to the concept of a glass cliff; she has always sidestepped such questions in interviews. But Haslam notes that downplaying such things is de rigueur for female CEOs entering crisis situations. The hundreds of interviews he’s conducted for his research tell him that much. “Pre-job, everyone says, ‘No, there’s no such thing.’ But post-job, they all say ‘Yes, of course I was set up to fail.’”