In a 2008 New York Times article on the firing of Sallie Krawcheck, then chair and CEO of Citi Global Wealth Management, the reporter wrote that “it’s tempting to attribute Ms. Krawcheck’s downfall to the ruthless vagaries of the glass ceiling. As it turns out, however, her departure from Citigroup was largely the result of an old-fashioned corporate bar brawl at a bank already notorious for dysfunctional management.”
In her new book, Own It: The Power of Women at Work, Krawcheck writes that she believed that line of thinking at the time. But now she feels differently. Yes, she was fired for being a woman, or at least behaving like one. As head of Citi’s wealth management units, including Smith Barney, Krawcheck wanted Citi to reimburse Smith Barney clients for at least part of their devastating losses on an investment that was wrongly pitched as low risk. Krawcheck thought the bank should take responsibility for not having had a handle on the risk of the investments. But Citigroup’s then–chief executive, Vikram Pandit, repeatedly said no when presented with Krawcheck’s take on the situation. Once the board asked to be briefed on the proposal and voted to partly reimburse clients, Krawcheck was fired within months.
“I don’t mean I was fired because I had different body parts,” she writes. “I was fired for calling out the risk, prioritizing the long term, and for putting client relationships ahead of the short-term bottom line.”
Krawcheck also argues that women should use their natural strengths (earlier in her career, she would have winced at the idea that women are different from men, she says) to gain power in a business world that increasingly needs these skills, including better decision making when it comes to complex problems and more equanimity in dealing with risks. If existing companies can’t do the trick for women, she contends, they need to start their own businesses.
One thread running through Own It is research showing that companies with greater diversity perform much better than those that pull employees and senior managers from the same homogeneous pool. Sadly, Krawcheck, who started her career as a research analyst and later held top jobs on Wall Street, including CEO of Sanford C. Bernstein & Co. and Merrill Lynch Wealth Management, says much of this information is still being ignored.
Senior Writer Julie Segal recently chatted with Krawcheck, 52, now CEO and co-founder of Ellevest, an investment platform for women, and chair of Ellevate Network.
Institutional Investor: The book is quite candid about your own failings and how you have been treated by men during your career. Did you struggle with being so honest?
Krawcheck: No. My career, whether I wanted it to be or not, has been very public. As a research analyst, you’re immediately failing in public. If you’re right 54 percent of the time, you’re doing well. That means you’re wrong 46 percent of the time. Hey, I was fired [from Citi] on the front page of the newspaper! Because we women take failure so hard and feel the need to apologize and smooth it over, I wanted to be candid about where I had failed. But really, with my career having been in the public eye, being even more candid in the book — who cares?
You write that during your years on Wall Street, you always believed in equality for women but brushed off the label of feminist. What do you say to people who say you’re late to the issue?
If we can’t continue to learn, what’s the point? I’m a very different person today than I was when I walked in the door of Bernstein, Smith Barney, or Merrill. I’ve gotten the opportunity to spend some time with Gloria Steinem, and she says women are the only group that become more radical as they age. In my 20s, and in women’s 20s, you look around and say, “There are so many women here, and we’re so welcome,” and you think feminism is your mother’s issue. But as Gloria said, “Of course men want women around in their 20s; they’re at their sexual peak.” In your 30s you have the two kids and a marriage to work on, and perhaps a sick parent, and it gets harder to move from associate to VP and from VP to director.
This age is when a lot of women drop out, you note in the book.
Yes, because your 30s are a blur. You’re also being told to act unnaturally, told to be confident, make a strong case, ask for the raise. And you’re doing that, but you’re getting backlash, because society doesn’t like women who are too masculine. But then you get to your mid- to late 40s, maybe early 50s, when the kids are older, and you look around and say, “Where are all the women? Wait a minute—the fight wasn’t over.”
I might not have labeled myself a feminist, but I was actually doing the work. I was speaking at every women’s conference that ever asked me; I was head of Citi’s women’s group; my management team was gender-diverse and diverse in all sorts of other ways. Did I do it with a big blazing “F” on my forehead? No. If anybody wants to ding me for not being a feminist earlier, go have a drink.
You’ve gone so far as to attribute the 2008–’09 financial crisis to a lack of diversity. Tell me about that.
Conventional wisdom, at least outside of Wall Street, was that evil geniuses took the country for a ride. What I saw was groupthink. And to break groupthink, you need diversity of thought, which comes from diversity of background, perspective, education, orientation, skin color, gender, et cetera. The one I’m most drawn to, for obvious reasons, is gender.
You and I both know in our heart that if those trading floors had been gender-diverse, we wouldn’t have had the crisis we had. Then during the crisis, boards and regulators said, “I’d love to put a woman in the job, but we’re in the middle of a crisis. We don’t have that luxury.” Of course it wasn’t a formal decision to bar women. It was “We’d love to have women, but not for this role. Now I need someone who has been in the trenches with me.” Women lost out to men in the crisis, and now the industry is less diverse than it was ten years ago.
