Robert Hargrove's Blog on Your First 100Days

From the Glass Ceiling to a Glass Cliff

I read an interesting 100-Day story the other day in Fortune Magazine called, “The Fall of a Wall Street Highflier” by Patricia Sellers (see link below) that I would like to retell here... 

When Erin Callan talked, people listened. On the March 2008 weekend after Bear Stearns collapsed and markets were reeling, many people thought Lehman Brothers would be the next to go down. Erin Callan, a super achiever, who at the age of 41 rocketed to CFO of Lehman, was about to have her mettle tested.

Throughout the weekend and into Monday, Lehman’s top execs, including Callan, had hit the mattresses in NYC calling investors to quiet their concerns that the company was about to go up in smoke. Despite their efforts, the stock fell 19% that day.

By Tuesday, the burden of the situation was shifted by the CEO directly to Erin. She had been the CFO for less than a 100 days and she was told she had to explain Lehman’s quarterly results in a way that would save the company. She would be asked to sit in a conference room by herself with a speaker phone and prove to freaked out investors that Lehman was not going belly up.

CEO Dick Fuld patted Erin on the back and wished her good luck. She realized at that moment that the pressure was on. By the time the call was over (less than one hour), the stock had jumped more than 15%. The CEO called ERin and said that her only mistake was hanging up the phone, because as long as she was talking, the stock kept rising. She got high fives from all the bond traders.

For that moment, Erin Callan was the most powerful woman on Wall Street, a finance chief who was bright, glamorous, and conveyed sex appeal.  “Moment” is a good term because from that point on CEO Fuld made Callan the face of the firm. Her appointment to the CFO job had made her a heavy duty breaker of the glass ceiling. 

Yet unwittingly, like many female execs, she was being pushed out onto a glass cliff where she would get herself in trouble by doing her best to explain why the stock had been previously overvalued, even though this happened before she took the job. She started to be attacked by others at Lehman as a media hound and with the stock imploding and the prospect of a Federal investigation, Fuld told Callan she was out.

Michelle Ryan, a Professor at the University of Exeter in England, argues that women who have broken the glass ceiling and rise too fast have to be careful to not wind up on the same kind of cliff as Callan. She argues that many companies in pursuit of diversity goals promote women too fast into tough jobs where they are doomed to fail. When they stumble quite visibly, it is in effect validating people’s misguided belief that women aren’t really up to the job.

If you find yourself in a similar situation where you are asked to take a stand for a big change or take risks that will push you out onto a glass cliff, don’t let your ego’s lust for power and glory determine your fate. Make sure you have the support you need from the CEO or board to see the change through and make sure you don’t do anything imprudent.

Read the Fortune story at... http://money.cnn.com/2010/03/08/news/companies/erin_callan_lehman.fortune/