Episode 100: Owning It - an Interview with Sallie Krawcheck
/Show transcript:
Welcome to The Broad Experience, the show about women, the workplace, and success. I’m Ashley Milne-Tyte.
This time…you’re a powerful woman in a profession dominated by men. How do you react when a male subordinate challenges you in front of a group?
“I could have dressed him down. What would have happened then? He would have been embarrassed, which probably would have been good. But so would everybody else have been. And you know who would have gotten the blame for it, right, because he was their bud. So it would have been me.”
Coming up, an interview with Sallie Krawcheck. For years she was one the few famous females on Wall Street.
Before we get into the show I want to mark this occasion. Because this is the hundredth episode of The Broad Experience. I started producing the show in the spring of 2012. If you are one of the early listeners, thanks so much for staying with me and the show all this time. It’s only five years ago but things were quite different then. Women and the workplace felt like a niche topic – even though it shouldn’t have been. Now, it’s an international conversation. Things I used to talk about in early shows like unconscious bias…these days it feels like everyone’s talking about that. In fact there are so many blogs and podcasts and conferences on women and work now that I have wondered lately…where do I fit into this? Is there still a place for this show in the sea of content that’s out there now?
On the whole I think there is still room for The Broad Experience. There’s a lot of black and white out there but I’m more interested in the gray. I try to keep these discussions thoughtful and nuanced. I’ll never please everyone. You won’t like all the guests you hear on this show – maybe you won’t always like what I say either. But that’s part of the point. I don’t want to have people with identical views on every episode. I want to make my listeners think, to make myself think, and consider things from different points of view.
Anyway, thanks for listening and supporting this independently produced show for all this time.
For a decade or so Sallie Krawcheck was one of very few women with a top job on Wall Street. She earned millions of dollars, had a huge office, and the use of private jet. I knew her name from when I was a daily business reporter. I remember the news of her firing from Citibank spreading all over the business pages back in 2008.
I ended up meeting her a couple of years ago because I’m a member of Ellevate, the women’s networking group she chairs. After leaving Wall Street for good a few years ago Sallie became an entrepreneur; she bought Ellevate, worked hard to build it and more recently she founded an investing platform for women called Ellevest – if you’re a US listener you’ll have heard me reading an ad for Ellevest on the show recently.
Sallie is also the author of a new book called Own It – the Power of Women at Work.
AM-T: “You say not that long ago, you were one of those people who didn’t really think about gender, ‘we’re all people, we’re all different’ – and now you’re writing a book about women owning their power at work. Tell me a little bit about your past.”
“Yeah. So if you’d asked me if I were a feminist I would have said yes. I wouldn’t have said it with a capital F, I would have said it with a little F. If you’d looked at my leadership teams when I was running Smith Barney and Merrill they were diverse. So I was out there maybe not talking the talk but I was walking the walk. It was really in my thinking post the financial crisis when I began to as a former exec in these businesses and former research analyst began to think about the causes of the crisis. Everybody was talking about greedy evil geniuses who perfectly foresaw the downturn and that is not at all what I saw. What I saw was well meaning individuals who missed it. What I also saw were well meaning individuals who all looked alike, had sort of the same backgrounds, who’d all been in the same training programs, were all friends, some vacationed together, who missed it. And as I began to think through I thought, that is groupthink. And how do you break groupthink – oh, diversity. Diversity of thought, perspective, background, orientation, education, skin color, nationality and one that has become my favorite, gender, and that is when I became truly passionate about the issue of the advancement of women in business.”
AM-T: “And you started doing your research because that’s your forte…”
“Right, I researched and researched and researched and actually spent time down in Washington DC saying guys, we talk about how for these banks quality of management is so important, but we’re just winging it. You know, ‘oh I think he’s smart, I think this person has a lot of experience.’ The only research I’ve seen that says anything about the quality of management is the research on diversity, and in particular gender diversity. And that it’s not by a little…that companies that have people of difference in their leadership teams have higher returns on capital by a lot. Lower risk, greater innovation, greater employee engagement, greater customer engagement…the power of diversity is such that diverse teams outperform smarter teams. But somehow we just don’t seem to acknowledge it. And worse, even with this research, with all the discussion and debate and advice for women and do this and do this book and this book and this book, the march to gender diversity has stalled and on Wall Street it’s gone backwards!”
AM-T: “Some people will know you and your work but others will not. You’ve famously talked about being fired publicly twice. Tell people about those two really big jobs that you had.”
“So my background – I was there. I was the CEO of Smith Barney for a while, I was the chief financial officer of Citi and I was the CEO for Merrill Lynch, so I was in those board rooms. I was fired on the front page of the Wall Street Journal twice, which I’m sure is the world record for any woman and really up there with the guys, too. Some people do it once but to do it twice is a super-special event. And I talk – for years if you’d said to me, were you fired from Citi because you were a woman I would have said, absolutely not, that’s an outrageous thing to say, get over yourself. However, as time has passed I’ve begun to think I was. Not because I had different body parts.
Here’s what happened: In the crisis it turned out we at Smith Barney had sold our clients investments that we truly madly deeply believed were low risk. It turned out they were high risk. They should have gone down 8c on the dollar, they went down 100 c on the dollar. The big print said low risk, the small print in the document said you could lose anything. I went to my very brand new boss and said this is unconventional but I think we should partially reimburse clients, because we’re wrong, cos these are our clients, we did wrong by them, and because of the long term health of the business this is better than being sued. And it’s the ethical thing to do. He disagreed, we went back and forth and back and forth, it went to the board, and board sided with me and of course then I knew it was done. You go up against your CEO with the board, you no longer have a job. And sure enough, a few months later I found out I’d been fired on CNBC, which is always a [laughs] one of those mornings, hey honey, what did you do this morning, well I went to get some coffee, some Cheerios, then I found out I’d been fired on CNBC. Weird! And what, that doesn’t sound like a woman thing! Except the research shows we women tend to be more relationship focused than men, we know this, more long term focused than men we semi know this, more risk aware, not risk averse, risk aware, we want to know more about it, understand it. And the other thing the research shows is we women tend to make decisions based on more factors…that is as the situation becomes more complex we can keep up, and gentlemen tend to narrow their focus…and all those things went into my decision to go up against the CEO. So I say yes, I was fired because of my more womanly characteristics.”
She ended up moving on to another top job – this time at Merrill Lynch, which had been bought by Bank of America. She was named head of global wealth management. The CEO who hired her said he’d be staying on for two years…but in the end he retired two months later, and in came a new regime. And even though the business did well under her leadership…she never loved the job the way she had her previous role. And she lacked real supporters at a senior level. After two years, she was let go. Again.
“And the lesson of that was the importance for us women of sponsors. When I called the board later and said, tell me what I could have done better. The answer was you had no one in that room arguing for you. You were by yourself.”
AM-T: “Yeah I thought that was so interesting…that picture of yourself on the coach feeling sorry for yourself, but having that sensible instinct to actually say thank you very much, what happened, and everyone who responded to you told you that same thing.”
“And a lot of them didn’t respond to me. But this is an issue right, that we women tend to get less feedback at work than men do. And we are not as individuals, we don’t come out of the womb understanding how to lead, how to run a business. So my advice is feedback…but to try to learn about yourself every step of the way. Learn what works, learn what doesn’t is important so I called the board even though I was in a tremendous amount of emotional pain and I was embarrassed and I was humiliated, I thought I can’t wait a month to do this…because then they’ll give me their pat answer, you know, time has passed. I want this to be fresh and I want to surprise them into telling me the truth.”
AM-T: “Can you just tell that story…when you were first working, you came in and on your desk every day you found an interesting little…”
“Ah, yes. Salomon Brothers. So this was 1987. I am fresh out of college. I think I had hay coming out of my teeth because I had come from North and South Carolina. And I came to Wall Street not because I had this burning desire to work on Wall Street but because I was a journalism major and wanted to know more to become a business journalist, and knew it was sort of rough and tumble but it was Michael Lewis’s – for those of your listeners who read Liar’s Poker - Salomon was as tough as they came. So about my second day of work I smelled cigar smoke, and a gentleman – well a man, came up behind me and said, ‘what kind of –fing discount maternity wear is that?’ And I thought, who is that profane individual? And it was the height of Charleston fashion, and of course it was my boss’s boss’s boss. So that was the environment. A couple of days later I saw a guy fall to the floor out of the corner of my eye. He’d had a heart attack, in his 30s, 40s. They carted him away, they brought him back and a couple of weeks later they fired him! OK, so all this is happening and in the meantime to the story you’re talking about, I’m having Xeroxed copies on my desk of male nether regions. And you’re thinking huh, this is an interesting artistic photocopy of something squishy and hairy…and…” [laughs…]
AM-T: “You don’t talk about a lot of things like this in the book, you tell some stories and you sort of laugh them off, and you don’t talk about sexual harassment, either, but you must have had to deal with this. I mean you call Wall St the biggest boys’ club”.
“Well it is the biggest boys’ club. So I did an interview a week ago and the person called me back afterwards and was a little accusing, an edge of why didn’t you go to HR? and what about the other women? And I said, I was 22 years old. I had no idea there was such a thing as HR. like I had no conception that was even an option…that was the culture and I had rent to pay. I came from, at the time my family was solidly middle class. They could not afford to pay my year-long New York City lease. I had to keep that job. So you just…”
AM-T: “The same reason women today don’t…”
“Absolutely, I had to crumple it up, throw it away. And essentially look guys, y’all are not gonna run me out of here, you’re just not. And eventually found my way out of investment banking and into research and to a company, Sanford Bernstein, and a company with a different culture and different values where I felt like I could be myself. But it took a lot of years to figure that out.”
AM-T: “And did you parry it largely with a sense of humor?”
“Well, yes because I had to, and I’ll tell you, a friend of mine, one of the investors in Ellevest said something really interesting to me. She tells young women, if you look for gender discrimination you will find it. You will find it everywhere. And you can choose to look and look and have it drag you down, or you can choose to pick your battles on it. And there are battles you need to pick. If someone is making overt sexual comments or overtures to you, today happily we have anonymous report lines and people do know what HR is and the environment is different. What I have found though is there is a lot of – among men and women – there are a lot of inherent gender biases and expectations that some of us, many of us don’t even know we have. And if you attack every one of those with anger and energy you’re gonna wear yourself out. So I practice what I call MRI – most respectful interpretation, and I bring humor to it.
One little example. When I was brought in to run Merrill there was a more mature gentleman in a big branch meeting – 150 people – and he essentially challenged me, well what makes you think you can run Merrill Lynch? And sort of arms folded, sitting back, challenging, not obnoxious but challenging. And I could have dressed him down. What would have happened then? He would have been embarrassed, which probably would have been good. But so would everybody else have been. And you know who would have gotten the blame for it, right, because he was their bud. It would have been me. I was the brittle bitch who had embarrassed their friend. Instead what I did, and this isn’t very funny but it’s just a slight…oh, oh my gosh, I thought I was here to do a presentation about the future of the company, but looks like it’s an interview right? He said, well yes it is… I said OK great, so let me see how I do. So I ended up parrying back and forth with him, going through my background, and at the end of it I said do you think, do you give me your OK to run the company? And he said yes, and off we went. Now none of it’s particularly hilarious, but I let him off the hook…and I did it in a way that took the temperature in the room down and I was respectful of him. MRI – it’s not oh, he’s an old gender biased fart, let me do that again, dude, and I’m angry at him, instead it was the way I’m gonna think about it is this man cares for this company and he sees me coming in quite a bit younger, looking quite a bit different than anyone else has ever looked here, so let me answer his question and let’s do it in a way that engages us both.”
I told Sallie I’d done a show on flexibility recently, and we started talking about how that’s still lacking at so many companies – even companies that give lip service to the idea. Sallie knows this first hand.
“Sometimes you need to leave a culture. You know I think we as women tend to think if we, you know, asked to be transferred away from a boss or away from a department or quit and go to another company that that's a failure. But some companies really are not conducive to I would not say being a woman, to being a person. So the anecdote I told, the story, I had a scare. I had a real health scare and went to my boss, the CEO, and said to him I'm afraid I'm going to have to step out today for a bit in order to have a brain scan.
And his response was, well, get back as soon as it's over. Not, hope you're OK, or ‘Oh my gosh! Take all the time you need. Is there anything we can do? I don't want to pry…’ – nothing. Get back as soon as you can. And lest you think I said hey, I have to step out. I said I have to go have a f--ing brain scan, right? That was not the kind of company in which I wanted to work quite honestly or I think people should want to work.”
AM-T “Did you leave that company?”
“Well, I got re-orged out”. [Laughs] Actually I say that because the issue that I really had, and I've thought about this a lot, that company's culture did not fit me. Bernstein's culture fit me, Citi’s culture fit me. It was a company that where there were meetings before meetings to figure out what was going to be said at the meeting. And that's not a culture in which I felt completely comfortable. My challenge was I had 40,000 people working in my department and so I just could never imagine calling my dad and saying you know, I'm just I'm just not comfortable every day. But what I will tell you is it is this is a reason that we women drop out, when we have cultures that don't have any give to them that don't accept us as people. I'll go further: when so much of the advice from so many experts out there and from our bosses and from H.R. professionals when we do our performance reviews, is essentially to act like a man -- be more confident. Raise your hand for the job you're not ready for, take on whatever those things are. Those ways that push us to be something we’re not, always what I hear from women again and again is just, I'm tired of being told, contorting myself to act like something I don't feel like.
And look, the reason companies do it is because for one they don't fully recognize the power of diversity is…dramatic pause…diversity! Not bringing in a bunch of people of difference and telling them to act like middle aged white guys. And the other thing is it's just an easier way to manage. I've managed a lot of people, it's way easier to manage everybody the same than to say you know what, Ashley is an introvert. And so I'm going to have to pull stuff out of her as opposed to, you know, just come on. You need to be much more forthcoming. You do the work, not me. But when we allow people to be themselves we get much more out of them.”
AM-T: “I mean you had you had two really big health scares with each of your kids after – you had you were not in one of these jobs, but I have to wonder, if that had happened when you were on the job at that company, what would have happened?”
“You know it's hard to…and both of my kids, I had such easy kids for so many years and then all of a sudden they both - my son got very sick for a while and my daughter was in a car accident it was out of school for a while. And happily somebody was looking down on me. I wasn't working at the time so I gave my full attention, and you know it's funny for a bit of time I sort of said geez if this had happened when I worked at X, any of these companies, I would have had to quit my job. The truth is I wouldn't have. I would have done a really bad job for my kids and I would have really done a bad job for the company and it would have been bad. So somehow in our, and in particular with companies like that in our culture the fact that we are humans and have lives outside of work rather than being viewed as normal or even positive it somehow makes us less ambitious. I assure you when I was in the hospital room with my son and I wasn't not ambitious. I was taking care of a kid who was in grave danger. Right. It didn't mean I didn't want to be CEO or CFO or C anything O. It just meant I'm a human being and I for some reason we hurt women – mostly women still for just simply being humans.”
AM-T: “Regarding…having…you lay out in the book that we should be talking, we should be having these conversations. We should be you know if someone makes an inappropriate comment there's a way to draw them aside. But surely it's much easier for women who do have some seniority to do those things, because the problem is the rank and file…it's tough.”
“Well, so I talk about the courageous conversation, and the courageous conversation is the one that I'm having with the book, is one where you will say, Hey Joe, you interrupted Susie 12 times in that meeting. These don't again – we can do them with humor and most respectful interpretation. But part of that most respectful interpretation is teaching people, sharing information with them. ‘I'm not sure that you did this but we'd get a lot more out of Susie if we didn't interrupt her.’ And of course, of course any number of conversations are easier to have when you're more senior but I had some at a junior level, you know, and which ones can you have and which ones are you comfortable having? And all of them not in a blame-based way, ‘You're such a jerk, you're doing this,’ but ‘hey, not sure if you're aware,’ right? Hey, I was reading something the other day I think you might find useful, or, it can be a courageous conversation even by going to H.R: ‘Coach me through this please. I'm challenged by this. Help me work through this.’ It is their job after all.
So I think for all of us rather than just letting it go by, what do we see and how can we make our workplaces better? Because it's good for them to have these conversations. And by the way we have to start them. I love all this bringing men in. I love it. I really, really, really hope it happens. I can tell you on Wall Street I interrupted more men talking about more things than anybody on the planet. As I say in the book, never once did I walk into a room and say oh my gosh sorry guys, and they’re like oh no, hey Sallie, come on in. The ten of us are just sitting here shooting the breeze about the power of gender diversity in driving business results. Never – it never happened. It was me who had to bring it up because it's a topic that's near and dear to my heart. And so if we wait, if we continue waiting, we're going to see what we've seen so far which is gender diversity in business has stalled.”
AM-T: “And I think race adds an extra layer as well, for women of color, especially if most people around you are white and your bosses are white, that's an extra layer of difficulty as well.”
“Oh my gosh, well in every way, right. Because we talk about the 78 cents on the dollar, but it's much more and much more for women of color for women with disabilities as well. So they're approaching these issues, you know, they have a harder climb than Caucasian women do.”
One way Sallie is hoping to level the playing field for all women is by encouraging them to invest some of their hard-earned money. She recently founded Ellevest, that investment platform for women I mentioned earlier.
AM-T: “I know when you were doing your research you had some outraged feedback along the lines of ‘how dare you, you know, pinkify investing?’ How do you get around that, because this is something that happens when anything is done for women.”
“I know it, I know it. And I for years, I have to tell you, people would say, ‘you should start investing business for women.’ I would say, ‘you should jump off a cliff,’ because we don't need anything special or a dumbed down, or remedial financial education. And then the research and analyst in me recognized that we have a gap, a money gap we never talk about. I talk about it all the time now, the gender investing gap. Men invest to a greater degree than women do. It cost your listeners hundreds of thousands, some of them millions of dollars over the course of their lives. We will not be equal with men until we are financially equal with men and the investing industry has really kept us away from it. Not on purpose but an industry with 86 percent males who are on average in their 60s. An industry that traffics in war and sports analogies - beat the market, outperform, pick a winner. An industry in which the TV shows are built off of sports broadcast. An industry whose symbol is the bull, which is a phallic symbol, is an industry built for men, and indeed does a better job for men than for women. And so when I began to recognize this…and by the way their answer is women work harder, or you're flawed in some way, you're risk-averse so you don't invest because you have a uterus, obviously, or you need more hand-holding, or you need more financial education. That one kills me because men need more financial education too, but they invest anyway.
And so we spent hundreds of hours with women to build an investing platform that doesn't market to them, though we do market to them, but works to solve the underlying issues that keep them from investing. And so a couple of things we did that no one else does: We take into account we live longer. Super important! We take into account, bummer, our salaries peak sooner. We have career breaks that we take. So that changes the entire complexion of how we need to save, slash invest.”
But at first, women were quick to criticize…
“What we saw at the beginning is we’d put a pop up, a Facebook ad. “How dare you. My lady brain isn't smart enough, you know, for the guy brains. I hate you.’ And then women would sort of circle through the site and say wait a minute, wait a minute, this is different in a good way. It isn't sexist, it’s sexist that we haven't had something like this in the past. What is notable and sad is that not one single solitary person, not one, has seen that it's for women and said it must be smarter when in fact in my view it is.”
Full disclosure – I was intrigued by this idea so I opened a small account at Ellevest myself at the end of last year.
Sallie is on a book promotion blitz right now and she needed to get to her next interview, but I wanted to make sure I covered one last thing.
AM-T: “Can I ask you one more question, do you have time for one more? OK. I was reading the book last night and I thought, I’m gonna ask Sallie why she doesn’t talk more about her family and how she did it all…and then I get to the end of the book where you say, I’m not gonna dwell on that. But you do talk a little bit about that. but of course everyone wants to know how a woman like you managed you know, your family life. Does your husband work in finance as well?”
“Two kids, two step kids, two cats, and one husband who worked in finance. And look, part of it is we were fortunate because we both were compensated well. We were able to put in place an infrastructure and support structure that sadly many women in this country can't afford to do. So for me to you know for me to say, ‘oh, it was so tough.’ I mean we had it lucky. The other thing I'd say is that I took a different approach, which is the whole work life balance, how do I do it, oh my gosh. I am a mediocre mother on my best day. I make such an unbelievable pie. I do a great luncheon spread. I'm 15 minutes late for every school play that has ever has been. And guess what? It never killed my children. And my approach to it rather than, I'm sorry, I'm guilt ridden, I hate myself was, ‘Hey guys, I'm doing the best I can.’ What I wanted them to see instead of me having this perfect work life balance, what we talked about my household is what impact was I making in the world out there.”
And she says even though her first office as an entrepreneur was the opposite of the corner office luxury she was used to – small, cramped, with mice – her daughter was impressed. Because she could tell her mum was really excited about what she was doing.
That’s the Broad Experience for this time.
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I’m Ashley Milne-Tyte. Thanks for listening.