Is Mary Barra Standing on a “Glass Cliff”?
April 30, 2014 I the New Yorker
Not long after General Motors appointed Mary T. Barra as its C.E.O., in January, it began recalling millions of cars in response to allegations that it didn’t properly correct ignition problems linked to thirteen deaths. Now comes the reckoning, in which a parade of investigators—from the Justice Department, the House of Representatives, the Senate, and others—try to figure out when executives and board members at G.M. learned about the problem. For most people, the answers matter because they would help us figure out whom to hold accountable. Because Barra is G.M.’s first female C.E.O, though, the answers are also of more than passing interest to a specialized group—those hoping to draw attention to a concept called the “glass cliff.”
The term, coined in a 2005 paper by the University of Exeter psychologists Michelle Ryan and Alex Haslam, now of the University of Queensland, describes a phenomenon in which companies promote women in times of crisis. This can happen for various reasons; men in power may scatter when times are bad, making it likelier that women will take over leadership spots, for example. The promotions, however, can problematically lead women to take the fall for their companies’ problems, and then be forced to step down after crises are resolved. “Maybe Barra’s plight simply follows a script that has played out for many other women,” Bryce Covert wrote last month, at Slate. But Barra’s performance so far suggests that she could prove to be an exception. Time, last week, selected her as one of the hundred most influential people of 2014, with Lee Iacocca, the former president of Ford and C.E.O. of Chrysler, writing, “If she remains as forthcoming as I’ve seen her on television with Congress, she will enjoy a long tenure at the helm.”
In their 2005 paper, Ryan and Haslam looked at nineteen companies listed on the London Stock Exchange that appointed female board members in 2003. They found that those companies had experienced, on average, a twenty-per-cent decline in performance in the six months preceding the appointments. A sample group of similar companies on the exchange that did not appoint a woman to their boards showed no significant performance decline during the same period. For anecdotal evidence that a glass cliff exists, some scholars point to prominent business-school case studies such as the tenure of Hewlett-Packard’s Carly Fiorina, who took over while the tech bubble was bursting and was ousted before she could reverse H.P.’s declines.
Still, the glass-cliff concept has had trouble catching on. Some critics argue that women may be elevated during crisis for perfectly good reasons—for instance, because they tend to have skills that are suited to crisis management. Others say there isn’t enough evidence to show that women are likelier than men to be promoted amid difficult circumstances so that they will be set up to fail. (Although there isn’t a huge amount of research on the topic, some other studies have shown a bias among boards, and among participants in experimental studies, to choose female leaders when times are bad.)
In December, G.M.’s previous C.E.O., Daniel F. Akerson, announced unexpectedly that he would retire early to care for his wife, Karin, while she was in the advanced stages of cancer, and that the board had appointed Barra—as he put it, a “car gal”—as his successor. Barra was a thirty-three-year veteran of the company and the daughter of a Pontiac die maker. Her appointment was a surprise—she hadn’t been considered a front-runner—but a welcome one, for both advocates of gender equality and employees of G.M., where she is well respected. Barra had experience with nearly every department of the company: she joined G.M. as an eighteen-year-old student at an academy then known as the General Motors Institute, and has held roles in manufacturing, human resources, and executive leadership. In her previous role, she proved that she could cut costs and streamline production, reducing the number of platforms used to build different models. While the company was relatively quiet about the reasons for Barra’s appointment, Akerson cited her “talent” as a key factor in her promotion, and the company described her in a press release as “a leader in the company’s ongoing turnaround, revitalizing GM’s product development process resulting in the launch of critically acclaimed new products while delivering record product quality ratings and higher customer satisfaction.” Plus, Barra had been at G.M. for longer than each of the three men who had also been considered seriously for the chief-executive post.
Barra began in her new position on January 15th. Four weeks later, G.M. announced a recall related to the design of the ignition switch; additional recalls followed. Barra will be the public face of G.M. as it responds to the multitude of government inquiries and runs its own internal investigation. Haslam, in an e-mail, said that Barra’s promotion shows “multiple glass cliff-like dimensions.” Barra has testified that she first became aware of a problem with the Chevrolet Cobalt, one of the recalled models, in late December, after the board had chosen her as C.E.O. but before she began the role. “One reason why women get given precarious leadership positions is that they do not have access to the high-quality information and support that might warn them off,” Haslam said.
Barra has been on the job for only three months, and has been mired in recalls for two of them, but early signs indicate that she is widely regarded as a strong leader who is adept at navigating difficult circumstances; this could separate her from many of the so-called victims of the glass cliff. She has already begun programs to encourage employees to speak up when they see problems. “It’s actually a much better opportunity to take over a company that’s a mess than to be a caretaker in a company that’s performing well,” Thomas Kolditz, a professor of leadership and management at the Yale School of Management and director of the school’s leadership-development program, told me. “The management challenges are greater, but so are the opportunities for power and influence.”
If Barra is successful in leading G.M. toward a culture of accountability and restoring its reputation, her tenure could evoke that of Xerox’s Anne Mulcahy. Mulcahy’s path, however, was slightly different. Before she became C.E.O., she was tapped in 2000 to become president, spearheading the turnaround of the company, which had suffered a series of organizational missteps. While she held that position, the company laid off eighty-six hundred people, and pursued other cost-cutting actions. When Mulcahy became C.E.O., in August, 2001, she announced that Xerox would return to profitability within months. Mulcahy went on to serve as C.E.O. for eight years; she left in high regard.