The State of the Glass Ceiling

The State of the Glass Ceiling

The State of the Glass Ceiling

Moneybox
Commentary about business and finance.
July 27 1999 4:49 PM

The State of the Glass Ceiling

Last week's hiring of Carly Fiorina as CEO of Hewlett-Packard is one of the few unequivocally good things to happen anywhere in the world--okay, how about "in the upper reaches of corporate America"--in recent months. For H-P, Fiorina's arrival will bring some much-needed new blood into a somewhat tired and overly bureaucratic organization, as well as a welcome emphasis on Internet commerce. For Fiorina, who had had a stellar career at Lucent, the hiring means that she'll get a shot at running a major corporation years before she could have expected to get the top job at her old company. And for the rest of us, at least the rest of us who worry about who's running American business, it's excellent finally to have a woman CEO of a Dow corporation.

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Unfortunately, though not surprisingly, Fiorina has taken pains to downplay the last fact. It's understandable that she doesn't want it to look as if she was hired because she was a woman (although the fact that she'd be worried about anyone thinking that in a world in which only three of the Fortune 500 corporations are run by women is somewhat astonishing). So we'll stipulate that she was not hired because she was a woman. She was hired because she's a managerial whiz who helped transform Lucent from a staid spin-off of AT&T into a prototypical bleeding-edge company. But that doesn't mean that the fact that she is a woman is therefore irrelevant.

The irony is that when Fiorina says things like "there really is not a glass ceiling anymore," she's simultaneously making too much and too little of her own accomplishment. She's making too much of it because of her implicit argument that her ascension has smashed the ceiling. But the reality is that most doors into the executive suite are still not open to women, and those that are have been opened only through struggle. Something like 95 percent of all top executive positions are still held by men. There are lots of reasons for that, of course, and most of them have to do with broader social realities and not with corporate prejudice. But the old-boys' network is not a myth, and it still takes a conscious effort on the part of boards of directors and hiring committees to promote women. (It may be telling, in fact, that New Economy companies have done a much better job in this regard.) It's hardly a coincidence that Hewlett-Packard, which has a number of women executives in positions of real authority, was the first Dow company ever to hire a female CEO. Under outgoing head Lew Platt, H-P has emphasized diversity. Which, again, doesn't mean that Fiorina wasn't the right choice. It just means that there's an institutional environment that allowed that choice to be made.

On the other hand, Fiorina is making too little of her accomplishment because she's downplaying just how talented she had to be to rise as fast as she has and to overcome all the lingering prejudices against women executives, especially in the old-line technology industry. (Needless to say, any time a CEO downplays her own talent, it's nice, but still ...) It's like Jackie Robinson. The first black major-leaguer had to be exceptional, because a merely good player wouldn't have been able to convince people of what they didn't want to be convinced of, namely, that black players could play. In some ways, in fact, you could say that major league baseball wasn't really integrated until the Boston Red Sox--the last team to integrate--signed Pumpsie Green, a mediocre-hitting utility infielder. When companies start being run by the female equivalents of Pumpsie--as most companies currently are by the male equivalents--then we'll know that the glass ceiling is really gone.

Of course, in theory the market should already have taken care of this. Discrimination is economically irrational, which means that companies which discriminate against women should feel the pain in reduced competitiveness. But we know that companies do discriminate even when it costs them. As my friend Rachel Devlin, a historian at Tulane University, points out, after World War II most industrial companies fired the women workers in their plants, even though they would work for less than men, in order to restore the status quo that had prevailed before the war.

In any case, when it comes to the CEO market in particular, it's difficult to decide what constitutes "rationality" because the selection process is so personalized and because the criteria for what constitutes a great CEO are so ill-defined. As the sky-high pay for today's CEOs compared with their counterparts of twenty years ago demonstrates, the insular nature of boards of directors means that purely economic considerations do not always prevail. And in that sense, worrying too much about why Fiorina was hired is fruitless. What's important is that she was hired and that if she's successful she'll make it easier for those after her. Even, or rather especially, those who are more Pumpsie Green than Jackie Robinson.