What you need to know about a glass cliff and why it could put Twitter’s new CEO in danger
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Loading... - Ottum Tore
- 17 May 2023
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In less than two months after Elon Musk acquired Twitter for a staggering $44 billion, he boldly stated that the incoming CEO of the company must have a high tolerance for pain. Furthermore, he declared his intention to step down as soon as he found a replacement "foolish enough" to desire the position.
On Friday, Musk revealed that Linda Yaccarino, a respected advertising executive from NBCUniversal, would be taking on the role. However, the duration of her tenure might hinge on her ability to endure the challenges ahead.
Musk's mention of the pronoun "she" when announcing the new CEO sparked immediate backlash from some of his more extreme Twitter followers, highlighting the rarity of female chief executives in the business world, particularly in the tech industry.
Yaccarino's appointment also reignited discussions about the "glass cliff" phenomenon, a theory proposing that women, along with underrepresented minorities, are often hired for leadership positions during times of crisis, setting them up for failure. This term was coined by Michelle Ryan and Alex Haslam, professors at the University of Exeter, in 2005. Since then, there have been numerous notable examples, including Marissa Mayer at Yahoo and Theresa May in the U.K.
Could Yaccarino be headed towards a similar situation?
"While Yaccarino boasts impeccable credentials and a history of remarkable success, she has predominantly operated in environments where her achievements were attainable," explained Jo-Ellen Pozner, a business professor at Santa Clara University specializing in corporate governance. "I mean no disrespect towards her or wish to undermine her abilities. However, I believe this situation presents an insurmountable challenge for almost anyone."
Yaccarino's success will partly depend on Elon Musk's willingness to relinquish control over Twitter's day-to-day operations. Musk stated that he would continue serving as Twitter's executive chairman, directly overseeing Yaccarino, in addition to his role as chief technology officer. He clarified that Yaccarino would primarily focus on business operations.
Upon the confirmation of Yaccarino's appointment, experts in the advertising industry lauded the decision, recognizing her as the right choice, if not the only one, to guide Twitter towards stability and profitability. Yaccarino had been responsible for NBCUniversal's market strategy and advertising revenue, which amounted to nearly $10 billion across its broadcast, cable, and digital assets. In comparison, Twitter reported a final quarterly revenue of just $1.17 billion when it was a public company in July.
"She possesses the exact qualities Twitter needs to rebuild trust with advertisers, attract major advertisers, and revitalize its advertising business," noted Jasmine Enberg, an analyst at Insider Intelligence who closely follows Twitter. "However, there are still numerous challenges ahead, and Yaccarino will have her hands full from day one."
During Musk's tenure as CEO, Twitter has been plagued by chaos. On his first day, he dismissed the company's top executives, followed by approximately 80% of the staff. Consequently, Twitter has experienced a shortage of engineers to ensure the smooth functioning of the platform and a lack of content moderators to combat hate speech, animal cruelty, and graphic violence.
Musk has also implemented changes to the platform's verification system and reduced safeguards against the dissemination of misinformation. Analysts attribute these alterations, coupled with Musk's own tendencies to spread misinformation and engage with conspiracy theorists and far-right figures, as factors that have deterred advertisers from the platform.
"Elon Musk has repeatedly attributed Twitter's problems to advertisers withdrawing from the platform. However, these problems stem from internal issues within Twitter. He has created a state of chaos, dismantled internal controls, eliminated critical functions such as content moderation, and made the user experience highly unpredictable. He has allowed dangerous voices to thrive," Pozner commented. "Given these circumstances, no one, regardless of gender or background, will be able to rectify this situation."
The glass cliff theory applies not only to business but also to politics. According to a 2011 report by Harvard Business Review, this phenomenon "does not seem to apply to organizations with a history of female leaders."
Twitter, like many tech companies, lacks a substantial history of female leadership. Its founders and all five of its previous CEOs, including Musk, have been men. While female CEOs remain rare across various industries, their presence in the tech sector is particularly scarce. Among the 340 CEOs surveyed in recent S&P 500 companies, only 18 were women, a slight increase from 16 in 2020. Prominent female tech CEOs include Safra Catz of Oracle and Lisa Su of AMD, a chipmaker.
Yaccarino appears ready to go head-to-head with Musk, although the outcome remains uncertain. During a recent on-stage interview, she confronted Musk about his late-night tweeting habits and asked if he could commit to refraining from tweeting after 3 a.m. Acknowledging that he had gotten himself into trouble on a few occasions due to such tweets, Musk responded noncommittally, saying, "I will aspire to tweet less at 3 a.m."
Yaccarino also inquired whether Musk would be open to allowing advertisers to influence the platform's vision in areas such as product development, ad safety, and content moderation to generate greater excitement for investing in Twitter.
Musk promptly dismissed the notion, asserting, "While it is acceptable to have preferences about where your advertisements appear on Twitter, it is not acceptable to dictate Twitter's actions. If that means losing advertising dollars, so be it. The preservation of freedom of speech is paramount."
Rebuilding trust with advertisers will necessitate stabilizing Twitter and ensuring that crucial product decisions are made thoughtfully and deliberately, rather than in the impulsive manner for which Musk is often known. Industry insiders regard Yaccarino as highly competent, with a proven track record and an impressive resume.
Nonetheless, for her to succeed on the business front, she will require Musk's support when it comes to product-related matters.
"The extent to which he will hand over full control to Yaccarino is a subject of debate. Twitter's future success largely hinges on his decisions in that regard," Enberg concluded.
