Musk’s Pick For Twitter CEO And The Glass Cliff Debate

Elon Musk announced that Linda Yaccarino, NBCUniversal's advertising chief, will be the new CEO of Twitter (now called X Corp.). According to a Tweet from Musk, Yaccarino will focus primarily on business operations, while Musk will continue to head product design and new technology.

As Twitter's CEO, Yaccarino is entering a risky role with a decent likelihood of failure. She will take the reins at a company that Musk has said lost more than half its value since he made the $44 billion purchase last November. Regarding profitability, Musk says the company is breaking even now, though its finances are not publicly available. Prior to Musk's takeover, the company struggled to earn a profit.

Since Twitter's future is uncertain and Yaccarino is a woman, she may be considered a glass cliff hire. The term “glass cliff” describes a phenomenon where women and minorities are more likely than men to be appointed to leadership positions in times of crisis. In addition to Yaccarino, Ellen Pao’s appointment at Reddit, Mary Barra at GM, Carly Fiorina at HP and Marissa Mayer at Yahoo are often cited examples of women promoted to top management at distressed companies. Despite these prominent examples, recent research has shown that white men are just as likely as women and minorities to be promoted to the helm of struggling companies. In other words, there may not be a glass cliff phenomenon in company management.

Nonetheless, several studies have found support for the glass cliff idea. One such study analyzed CEO appointments at Fortune 500 companies over 15 years and found that women and people of color were more likely to be named CEO when the organization was struggling. More evidence comes from college basketball in the United States. Minority coaches were more likely than white men to be promoted to the helm of losing teams.

Despite this evidence supporting the glass cliff, other studies found no evidence of the phenomenon. Some researchers have even called it "the glass cliff myth." For example, one study of 233 large firms in Germany and the UK over ten years found no evidence of a glass cliff phenomenon in either country.

To reconcile the disparate results from different studies on the glass cliff, researchers performed a statistical analysis of all the research on this topic, examining 74 independent studies. Their findings, published in 2020 in Psychological Bulletin, found no evidence to support a glass cliff phenomenon when it comes to company management or sports. In other words, women and minorities were not more likely than white men to be promoted when these organizations were in crisis.

The researchers found some evidence of the glass cliff in the political domain and stronger effects in education and non-profits. In these areas, women and minorities were more likely than white men to be hired by struggling organizations or governments. In addition, the researchers found evidence of the glass cliff phenomenon in experimental studies where participants were asked hypothetically about a man's or woman's suitability to lead a struggling company. The researchers concluded, "We find support for the glass cliff, but the effect is small and not ubiquitous. Instead, it is restricted to some domains and may depend on a range of factors."

Despite the ongoing debate on the existence of the glass cliff phenomenon, the fact remains that Yaccarino has taken on a challenging leadership role at a company that has seen significant financial losses. Her position at Twitter is precarious, and she has taken a risk to lead the organization. That would be true of anyone at the company's helm, regardless of gender.