-Welcome to the show. -Thank you. Great to be here.
Uh, it is good to have you here, especially in this time.
It feels like, uh, businesses are in the news
for how they're handling, uh, moving into a space
where women are included.
The gender pay gap is a large conversation that we're having.
As a whole, it feels like the world is moving
in the right direction.
As somebody who's been a CEO, though,
-do you agree with that? -No.
As someone who's a person, I don't...
-And a woman. It's not happening. -Right.
The, uh, the gender pay gap,
which is decades away from closing for white women,
100 plus years away from closing for black women,
200 plus years away from closing for Latina women.
-Wow. -Right?
The number of female CEOs in the Fortune 500
has declined by 25%.
We're not making any progress.
We're not moving forward. And this is despite the fact
that there's reams of research out there, Trevor,
that says that, you know, as a capitalist society,
-we look for better returns, -Yes.
and that greater diversity at the top of these companies
can lead to better returns, higher profitability,
greater innovation, etcetera.
And we are going sideways at best
and in many cases, backwards.
So, you-you were a CEO of Smith Barney,
uh, Merrill Lyn... Merrill Lynch Wealth Management.
Um, when you were in those positions,
what did you notice from the top?
Is there something that happens, maybe, when you're a CEO
where you're like, "Oh, I can't help the ladies"?
Or, like, what...
Is-is there a roadblock that is an institutional thing?
-What is it? -Well, you know.
The pipeline.
We've got our diversity committee,
-and we've got our mentoring program and... -Right. Right.
You know, but we need to let our managers manage.
And, so, I think CEOs really do believe
in the power of diversity,
but middle management is where diversity goes to die.
-Oh. -Because when it comes time to promoting the next person
and you say, "Well, I think I read some research one time
"about diversity, drives better results.
"But that young man,
"that young man who reminds me so darn much of myself
"when I was younger...
I just feel like he's gonna do a better job."
That's a powerful way to put it,
because you read so many times
about how, uh, people hire
-the people who remind them most of themselves. -Right.
And so you have a vicious cycle of these men who are white
hiring white men who remind them of themselves.
And sometimes it's-it's an implicit bias,
but you've come out and said
that you don't believe that bias training helps.
You don't believe that these, like, diversity programs help.
-And, in fact... -Why don't we just say
everything we're doing doesn't help.
-Wow. That's... -Right? If we're not moving forward,
-what we're doing isn't working. -What do you think would help?
I think CEOs deciding that it will be done
and having it be done
and overruling their managers who aren't getting it done
-and really paying them for it. -Right.
That's what works. Marc Benioff at Salesforce
saying, "I'm... You know, forget about the reasons
"that we're paying this person le...
"you know, this woman less than this per...
"this white guy, this person of color.
"We're just closing these gender pay gaps
and just doing it" is what makes the difference.
Let me ask you this then.
The argument that you hear a lot of CEOs say
or-or middle managers or anything,
they always come back with the same thing.
They go, "Well, Sallie, I want to--
"I want to-- I want to give these people promotions,
"but, I mean, I-I don't just want to give the job to someone
-'cause she's a woman. You know? I-I..." -"I mean, we can't lower
"our standards, Trevor. We don't want to lower our standards,
-"do we? No! -"The standards. The standards."
Let's grab a beer!"
(cheering and applause)
We should run a company. This is nice.
This is fun.
-But, yeah, like... -"Beer's good!"
-But-but how do you answer... -Yes. Well, hold on.
Let's g-- let's go back to the research.
You and I have talked about this before.
The research shows that we're not lowering our standards
in business in order to promote women and people of color.
We actually hold them to a higher standard.
White men are promoted based on potential.
"I think that young man is going places.
Let's give him a chance."
Whereas women and people of color
are promoted based on what they've achieved.
-So when you hear, -Wow.
you know, gentlemen, when you hear your spouse,
your friends, your et cetera come home and say,
"Gosh, I have to work twice as hard
to make it, you know, as far,"
there really is some truth to this.
And, again, I think it's because of these implicit--
I don't know if we want to use the word "bias"
but-but this comfort level we have
-with bringing along people like ourselves. -Right.
So, you took a step back
-and away from the world that you were in. -Yeah.
You started this company called Ellevest,
which is specifically geared at helping women
-to get investment money -Right.
to start companies, which, again, is another problem...
It's actually to help women invest.
-To help them invest. -To help women invest. So, you...
-Why-why is that necessary? -Well, right,
why would we have to do that? It's money, right?
So we've talked a bit about the gender pay gap.
-Right. -But let's back up. There are all kinds
of gender money gaps, and one is the gender investing gap.
Women don't invest as much as men do.
Women keep the majority of their money in cash.
Men invest more of it. So women haven't earned those returns.
And, you know, for your-- some of your viewers,
it could be tens of thousands, hundreds of thousands,
millions of dollars over the course of their lives.
When I worked on Wall Street,
when I worked in the investing industry, it was,
"Well, you know, women, you need to change.
"You need-- you need to be less risk averse.
You need to, you know, have more financial education."
I stepped back and said, "Wait a second.
"In an industry in which 90% of fund managers are men,
"86% of financial advisors are men,
"maybe it's the industry that needs to change.
"Maybe an industry that's so male built an investing...
(stammers) "investing means that is all about winning
-and outperforming and alpha and beating the market." -Right.
And, Trevor, the symbol of the investing industry
is a bull.
-Right. -It's a phallic symbol.
(chuckling)
-I've seen the balls. -Right?
-Never thought of it that way. -I'm sorry,
it's an anatomically correct phallic symbol.
-Why? -Not a single woman I know says,
"You know, that bull just speaks to me.
I love that bull."
No. What she sees is an industry that doesn't represent her,
and that is telling... has told her how to change.
And, so, I thought, well, why don't we start a company,
Ellevest, that actually changes...
that quits trying to change her
but changes the underlying product to the way
-that she wants to invest? -Right. When you...
When you look at the men that work in the industry,
-you know, there are many good men... Yeah.
...who then don't seem to do the good thing.
There are many men who will say,
"Oh, I want this change to happen.
I-I need it to happen."
If they come up to you and they say to you,
"Sallie, I-I would love for a woman to have this position.
I just don't know where to find one,"
-where do they begin looking? -Well, that's
because their network tends to be individuals
-who are like themselves. -Right.
And so, they need to break out of their networks.
One thing we hear at Ellevest all the time, right?
Because we're a financial technology company. We're tech.
We use technology to drive a better client experience.
We hear all the time, you can't find any women engineers.
Just can't find 'em, right? They're impossible to find.
Our engineering team is 50% women.
Our company is 40% people of color.
We're more than half women.
It's because we have to...
because we started at the beginning
by bringing in a diverse workforce,
who, if they've having a good experience,
-reach out to their networks... -Right.
...and say, "You should be here."
But if you're just hanging out with your network
of people just like you
who you love to golf with, right, then, no.
"I... You know, I don't know anybody.
Oh, there must not be anybody out there." Right?
-No, you just don't know 'em. -There's also
a fascinating trend that I've read about
where sometimes women who are in positions of power seem
-to be the ones who block other women from progressing. -Oh.
-Now we're going deep. -(laughter)
Absolutely. She's got a name.
She's a queen bee.
And I'll tell you exactly why she does it.
Because the world, the business world she's grown up in--
she looks up, and she says, "Oh, I see the leadership table."
And there's one women there, or there are two women there.
There's one person of color there.
"I got it.
"So in order to get to that seat,
"I'm not competing with all of you guys.
-I'm competing with her." -Wow.
"And her and her."
And so, she's just being economically smart historically,
because if she wants that seat,
she knows who she needs to knock out to get it.
How do you change that thinking?
Well, again, you know, it has to come from the top, or,
increasingly, it comes from the bottom.
And what we're starting to see is...
So we women got separated, right?
We used to... Remember we used to, in college,
all the women-- we'd travel in packs, right?
-Yeah, I remember. -We don't go anywhere
-if we don't go in a pack. -Oh, I remember.
Right? So much fun.
So we get to the workforce, and they completely separate us.
-We're competing against each other. -Right.
What these millennial women are doing is
they're coming together, right?
And they are effecting change.
They're believing in each other.
-That's amazing. -They are within companies like Nike,
doing surveys about the tox...
what was a toxic culture there, and then changing it.
We're seeing them come...
When Susan Fowler called out the CEO of Uber,
they're believing her, they're coming around her.
So they're changing the paradigm.
So we women... we women are 51% of the workforce,
we direct 85% of consumer spending,
um, we control seven trillion dollars of investible assets,
but somehow, we got convinced that we needed the men
to empower us.
-Damn. -Damn!
-You got deep. You got deep. -I got deep. I got deep.
-Thank you so much for coming to the show. -Thank you.
Sallie Krawcheck, everybody.