Sallie: My call is for CEOs to break the wheel,
break something, change something. Kathryn: Well, hello everyone, and welcome
to the New Rules of Work where we explore the changing landscape of work and the dynamic
between employers and employees. I have to say I am incredibly excited to welcome
our guest today, Sallie Krawcheck. Now I have known Sallie for many years. I actually looked up to her when I was getting
started in my career. She has been on Fast Company’s a 100 most
creative people in business, Forbes, the world’s 100 most powerful women, Vanity Fair new establishment
list, which is a list that personally I’m excited to hopefully get on some day. And Sallie also has just a tremendous track
record. She led Merrill Lynch, Smith Barney, Citi
private bank as CEO. She was a seed investor in The Muse, which
thank you so much, Sallie, for supporting us in the early days. And today she’s the CEO and co-founder of
Ellevest, a digital first investment platform for women. Sallie, thank you so much for being on the
podcast today. Sallie: Oh, Kathryn. It’s my pleasure. I’ve just been a fan of what you’re doing
and if you and your team for, want to say so long but for awhile. Kathryn: Well I love that and I was, it’s
funny, as I was thinking about who did I want to talk to about the sort of changing nature
of work, which frankly is such a big topic, it covers so many things. You are one of the first people that has come
to mind because I think that first of all you’ve had, you’ve really had multiple incredibly
successful careers. You’ve done really powerful work. And I think with Ellevest in particular around
closing the gender gap and you’ve said I think that your life mission is to help women reach
their financial and professional goals. I thought maybe we would center some of this
episode around that topic. Really breaking the wheel and thinking about
how do we change the current paradigm around the gender gap? Kathryn: And so maybe a good place to start
is, what does it look like today in 2019 to help women reach their financial and professional
goals? How are we as a society doing this? How are you doing this? And for people who are listening who like
to be a positive force for gender equity, what are some of the big trends or big things
people should be aware of? Sallie: Well, it’s a big, big question. And I started with, I’ve actually shifted
my personal and professional goals. Those were big words. I’m just now all about getting more money
in the hands of women. That’s just it. Kathryn: I love it. Sallie: I know. Well look, when women have more money, the
positive ripple effect is so significant. Their families are better off, the economy
grows, the markets are more healthy, society equalizes, nonprofits are better off, men
are better off. It’s good for all genders. And there are a lot of people working on this
topic and talking about this topic, closing the gender pay gaps at work, which has been
too slow, just too slow. Particularly for women of color. I’ve found Kathryn, there are two things there
at work, one of which, and it’s not the next diversity committee or the next mentoring
program. Those are great. Sallie: What gets it done quickly is the senior
leadership deciding to do it and looking at where are the differences and not falling
behind the well, we pay everybody the same, at the same level and just the fact that we
haven’t promoted any women, oh well. But saying no, that’s part of the problem
too. And the other thing that works is when women
and their allies come together and engage with our leadership teams proactively around
this, you can’t do it as one person. All you can do as one person has asked for
a raise and that works for some people and doesn’t work for other people. What can work is getting together with your
diversity group and coming together with the leadership team and saying, “Look, here’s
this research on how quickly paid parental leaves pay for themselves.” You can Google the research on it. Sallie: And so if we put that in place, we
could have fewer mothers and fathers leave after they give birth and then we’ll save
you the money of having to find their replacement and train their replacement. A proactive engagement as opposed to everybody
fighting for themselves. That’s one. And then of course what we’re working on at
Ellevest is even beyond the gender pay gap. Women have not invested as much as men have. Put another way, they’ve left more of their
money in cash and that has caused the women who are listening to this podcast hundreds
of thousands. For some of them, it’ll cost them more than
a million dollars over the course of their lives. I built Ellevest, put together a great team
to build Ellevest to help make investing more approachable and help women get that money. And by the way, that is something they can
do on their own. They can’t control the market, but they can
make the decision to invest on their own. Whereas, getting a raise is amazing and you
can’t do that all by yourself. You have to have your boss be okay with it. Kathryn: Yeah. Yeah. And I love this too because I can’t remember
where I was the first time that someone said to me, “Men are asked to invest, women are
asked to donate. To do philanthropy.” And I thought that was so interesting and
I started noticing it in my day to day life. And I do think there’s something that is potentially
unintentional but can have a really big impact. And so, giving women more opportunities, more
confidence, more platforms to invest and to grow their wealth, I think is incredibly powerful. Sallie: It’s huge. And we’re solving a big problem. You and I both know as entrepreneurs, we often,
when both of us were starting our businesses, we got the question of are you a vitamin or
an aspirin? And a vitamin is a business that helps you,
maybe solves a problem you don’t really know you had. You don’t have to worry it. It’s a good to do. It’s not a must do. And aspirin, of course, I got a headache and
I have to solve it and you’re going to reach for that aspirin first. I feel like at Ellevest, with women investing,
we’re actually solving, we’re a horse pill. What do I mean by that? Money is women’s number one source of stress. Women, as you probably know, can lose up to
two weeks a year fretting about it. The act of investing and saving, the taking
of the action is the number one driver of our confidence in our ability to achieve our
future goals. Sallie: And I think that’s in part because
it’s that sense that it’s not how much we’ve yet invested. It’s not how much, how a relationship is with
our spouse or education level, et cetera. It is, are we taking that action? And so we are solving a big problem and I
would take it even one step further. Something that The Muse is working on and
we’re working on is we help these individuals get more money as we help women get more money. We all know we wouldn’t have had be in a Me
Too or Time’s Up moment. But money is a source of power that enables
you to quit the job where you’re being chased around the desk. Kathryn: Absolutely. And yeah, it gives you that freedom. It can give you leverage in negotiations if
you need it. I think that that is so true. And it’s interesting to me when we look at
the broader financial industry, there’s obviously still a ways to go and you’ve been a real,
an advocate for kind of calling for the financial industry to quote unquote break the wheel
in order to address the under representation of women. What does that, for people who may not be
familiar with that phrase, what does that look like to you? And how should companies be thinking about
maybe going beyond the kind of pat basics and really addressing the problem head on. Sallie: Yeah, and of course the phrase comes
from Game of Thrones, which I guess Daenerys was going to break the wheel. She didn’t. Kathryn: Didn’t work out that way, but I was
really rooting for her. Sallie: Exactly for her, the way she was expecting
it to. But she did in fact break the wheel. And that’s sort of the message there is sort
of these half measures just haven’t worked in financial services. Can you believe that for years and years after
the financial crisis of 2007, 2008 that the industry of Wall Street, which we all know
went into the downturn, white, male and middle aged, came out white or male or middle agier. But today… Kathryn: Did you learn nothing? Sallie: I know, you’d think, let’s try something
different. Here’s a good idea. How about we let some other people have a
chance. But today it’s 86% of financial advisors are
male. By the way, average age, around 60. 90% of mutual fund managers are male. 98% of mutual fund assets for the whole industry
are run by males. Okay, you might say, “Those guys are so good
at this.” Except here’s the thing. The research actually tells us women are better
money managers than men. And so it’s an industry that all of us should
care deeply about changing, but in fact has gone in the other direction. In fact, it’s gone in the other direction
even though the numbers tell it should go that way, it’s gone that a way. And it’s, by the way, supposedly the most
return sensitive analytical industry and yet its own, I don’t want to say biases, but the
way they’ve been socialized with money managers and men have just led to it overwhelmingly
going in one direction. Sallie: As I look at this and I say Kathryn,
it’s a frigging financial crisis. Can’t change the direction. For certain companies, I’m not sure the next
day we’re having a diversity cocktail party where we can all share tips and tricks is
going to do it. My call is for CEOs to break the wheel, break
something, change something such as a Mark Benioff did at Salesforce where he just closed
the gender pay gap. As we also are sitting at a PayPal, at a MasterCard
who probably not coincidentally are all investors in Ellevest where the CEO has just said, just
what worked before, the fact that we’ve been doing it for 10 years doesn’t mean that in
year, 10 years plus two months is going to start to work. Let’s just do something different. Kathryn: Yeah. And I think that that’s what it’s going to
require to make these big changes. I remember when I was starting The Muse, there
were a lot of very well intentioned people that were willing to give me advice and were
willing to give me connections. But to some extent I was like, look, to get
this business off the ground I need investors, I need money. Sallie: And money. And money. Kathryn: Exactly. Sometimes people just have to give someone
the promotion, give someone the chance, look at your gender or your racial and ethnic disparities
and say, “We are just not going to allow this to happen anymore.” Sallie: I know. I know. I have a similar story. We had a company that was looking at a fund
that was looking at investing in Ellevest as part of a bigger company. And they said, “Well we might put in 2 million.” And I said, “You’re so big and we need capital
to grow, 10 would be better.” And they came back and said, “Well actually
we’d like to host a dinner for you.” Kathryn: I could host my own dinner, thank
you. Sallie: And of course, every way I’ve been
socialized, I would, I didn’t say, “How dare you. How patronizing. You got to be kidding me?” Of course I was, “Oh, thank you for that offer. That’s amazing.” Kathryn: My version of that was in the early
days of The Muse, there was one, one female focused investment fund in New York City. There was only one. And I cannot tell you the number of patronizing
conversations I had where someone, they might’ve well addressed me as little lady, although
no one actually did. But they would say, “You know, this seems
like a nice project but I don’t think it’s a fit for our fund. But have you talked to,” and it was after
the 17th time, again, I was just like, it would be great. I do think though with the breaking the wheel
reference, I was quite bummed that Daenerys ended up not to give any spoilers, but I was
really rooting for the strong female leader. Kathryn: I guess I want to go back a little
bit because you spent the first part of your career working your way up the ranks on Wall
Street and you had leadership position after leadership position. You were really one of the most well known
and well respected women on Wall Street for a long time. And so I’m sure you must’ve encountered some
elements of company culture that maybe were positive, some elements that were more challenging. And so when you founded Ellevest and you started
building your team, you had your own company to try and influence and create from scratch. What were some of the things that you set
out to do differently in terms of culture, in terms of the workplace and the work environment? How did you think about that? Sallie: Well, Kathryn, I’m a research analyst
by training. When I was in my formative career years, the
job that I loved was research analyst, use case equity research analyst. And so what I learned from that is look at
the facts, look at the research, look at the statistics, and go where they tell you to
go. That while I might think that my intuition
is stronger than someone else’s intuition, great. But if I have facts that tell me differently,
go with the facts every single time. And what the research tells me is to build
great companies is to build diverse and inclusive companies. And that not only can help on the investing
side where that research is telling us that diversity of input, of background, et cetera
can lead to better investing results and better results for our users and clients. But this is also the case when it comes to
building the company itself. And that missed opportunities aren’t missed
as much when you have a diversity of thoughts, background, perspective, gender, orientation,
et cetera, et cetera around the table. Sallie: And in fact, I would say it’s probably
no surprise that the investing industry, the industry of Wall Street being so overwhelmingly
male has done such a much better job for men as clients than for women. And it’s probably not a surprise that Ellevest
is the first one to really crack the code. At Ellevest, we’ve got today representing
who our users are and we, by the way, we also men are very, very, very welcome. Our male allies to invest with us and people
of all genders here. But we are majority female representing our
user base. We are, our engineering team is more than
half female, which is absolutely unheard of for an engineering team of any size. Kathryn: That’s phenomenal. Sallie: We are, I will get the numbers off
by a little bit but we’re depends on who the day and the hour, but we’re about 45 to 48%
people of color. We over index to the non-binary individuals. And so Kathryn, when you come here and walk
through here, this looks like no FinTech or wealth management or asset or financial services
company you’ve ever been in. It is the most diverse and I think we’re actually
becoming the place where if you look at a Goldman Sachs, or you look at say a SoFi on
the FinTech side and you say that doesn’t represent me, that you say I’ve got to go
to Ellevest. That is a place where I feel like I can bring
my full self. Sallie: And in fact, one of my wonderful moments
here as a woman who had not come out at her prior job and was here for a little bit and
then she looked at me said, “Yep, I can come out, here we go.” And it was just such a wonderful moment that
someone really felt like whereas they had been in the industry for a while and couldn’t
bring their whole self to work, that they could do it at Ellevest. And so I don’t think our early success and
momentum and growth is any coincidence because it comes from that place of diversity, which
means we’re bringing in the best thoughts and ideas. Kathryn: Absolutely. And to have that sort of environment, I think
you hit the nail on the head, which is that it compounds. And that works in both directions. If you are, if you put diversity and inclusion
on the back burner and you wait a long time to address it, the problem often gets worse. But whereas when you put it front and center
and you start making progress, if that progress is genuine, if the people who are in your
company are really advocates for what you’re doing and it’s a genuine movement, you can
often start to see that pay dividends in a really powerful way. Sallie: There’s no doubt about it, but it
has to be a conscious decision. And even here we have points when we veer
off. And for us it tends to, the early days it
tended to be all right, here’s another white woman, let’s hire her. And yet another white woman. And I said, “Oh my gosh, we’re going to be
a company of cheerful white women.” And so frankly, and by the way Kathryn, when
I talk to folks who, the managers who were hiring, who didn’t have a ton of experience,
hadn’t been doing it for decades because it was a young group, they would say, “Wow,”
and you’re going to hear all the catch phrases, we don’t want to lower our standards. Oh, I interviewed X number of people. It’s all the headhunters are showing us, I
would love to. The next one, et cetera. And it just, you would fall into the, well
this is, I’ve interviewed X number of people so this is the entire candidate pool. Sallie: I tell you what solved that Kathryn,
is I said, “Okay, we’re not going to hire for this position. Until we find somebody who doesn’t reflect
all of us, who are already here, then we won’t hire because I don’t need one more person
just like me.” And you’d be surprised by how quickly all
of a sudden, they went, “Oh, okay, well actually, here we have an individual with a different
kind of background.” Kathryn: Yeah. It’s really, it’s committing, it’s not taking
the easy way out and it’s saying this matters so much that, and people do this and in other
forms of business all the time, you’re not just like, oh, we missed our important sales
goal or we didn’t fix the product. At some points it’s just like you got to get
it done. And I think that that’s a really powerful
approach. Kathryn: I’ve got just a couple more questions
before we wrap it up. One is, one of the things that we have not
even touched on is in addition to everything else that you do, you’re also the chair of
The Network, which is a global professional women’s network with 135,000 members. Tell me a little bit about the work Ellevate
does, what does it mean to you? And what’s the impact that the organization
is having or looking to have? Sallie: Yeah, so I really appreciate you asking
about that. Ellevate Network is really built with the
recognition that networking has been called the number one unwritten rule of success in
business. That the guys, I don’t know if this is still
true for young people who are coming in the workforce, but up until not that long ago,
somehow the guys just understood how to network earlier. I don’t know if they were all on the football
team together, the basketball team together or whatever it was. But they recognized that the part of work,
work just isn’t school. That yeah, you should get an A on your assignment,
but that that’s not the end of it. It’s not you turn it in and then hey, I got
an A. Next time to take a test. That in some ways is the beginning of it. Sallie: That you do great work and then you’re
out and about, not in a schmoozy weird, pleasy way, but in a learning way, in a sharing way. And that who you know is what you’re now and
that by having a glass of wine with someone and talking about industry trends as they
see it from a different perspective, you’ve just added to your knowledge. And by the way, at the same time that you’re
on their mind and you’re sharing with them and they feel like you’re super smart. And then when the board position comes up,
they’re probably thinking of you or the young person looking for a job. They’re probably referring or the journalist
who’s looking to do a profile or et cetera, et cetera, et cetera. It’s playing in traffic. And what our research showed is that men were
doing this early in their 20s women actually and it’s a little bit dated Kathryn, but not
so much that well I think networking’s sort of cheating. Sallie: And that I want to get the job because
I got it on my own. And you’re unfortunately or fortunately or
whatever who you know matters. A warm introduction is worth so much more
than, a cold email. And so Ellevate is there, it brings women
together, puts on a whole bunch of series of events. In fact, I was at one last night that was
on what’s going in the economy and market. A lot of fun education and at the same time
a glass of wine. And these women are just doing business together. They just are. And advising each other. I think my very first event at Ellevate just
warmed my heart. A woman had just lost her job and she came
and she said, “I wasn’t going to come. I’m so down. But you have the alcohol so here we go.” And the two women who she was talking to,
both of them were giving her job, here’s a warm introduction to so and so. Hey, we’re looking for somebody on my team
who can. And you just saw that magic happen fast. Sallie: I’ll add one thing. The research says that men whose friends are
successful are more likely to be successful. Women whose friends are successful historically
had not been more successful. And it really comes down to that networking
where the guys have given each other opportunities, talked each other up, put each other on their
boards and we women have not. Have not. And so, making sure we’re being inclusive,
we’re hiring the right people, but networking with each other so that we can never ever
lower our standards. And at the same time we think of each other
for positions, help bring other women along. Kathryn: I think that’s, you’ve really, what
I love is that you’ve hit the nail on the head with two different parts of this problem. I think one is not having the forums, the
connections, the ability to meet the people that can help you get to where you want to
go. And then the other is the almost the social
permission to ask. Because I do think that one of the other big
differences is as you’ve sort of hinted at is, a lot of women are not necessarily socialized
that it’s okay to ask your friends and your connections for advice, a referral, a this,
a that. Kathryn: And I think it really has opened
up so many opportunities for me personally when I became more comfortable letting my
network know what I needed. And I think one of the things that’s so powerful
about the Ellevate Network is that by its mission statement and by joining, it’s clear
that people are there, women are there to help each other. And so it also almost gives a permission and
an encouragement to the asking, to the helping, to the receiving that I think can help also
get people that access to what they need to the needle for their career. Sallie: That’s right. And part of the message around Ellevate is
don’t join if you’re not willing to help. If you’re just coming in and you’re just thinking
about yourself, please don’t. Please don’t. But come in with sort of an open heart and
mind and absolutely you will get that help and it’ll come back to you in spades. Might not in the first month, might not even
in the first year. But, and that’s what I find Kathryn with my
network is if you give, you will receive. And by the way, that’s on average and that
means that there’s some people who achieve, my gosh, I just have done so much for them. People you invite every year to your holiday
party and you never get invited back. And finally do you ever do anything in your
home? Are you ever going to invite me? And that’s okay because it averages out. Because there’s also the person whose 4th
of July you go to. Have them back either. It doesn’t have to average out with every
person but it more than averages out across the network. Kathryn: Absolutely. My last question is very quick because I know
we’re almost out of time, but is there one piece of advice that you might leave us with
either for people working in larger companies who are trying to have an impact, folks that
are in startups or subsidiaries or divisions where there’s rapid growth, you don’t have
to cover the whole field, but one kind of thing that you might leave people with who
are really interested in learning from you and from all of the experience of your career. Sallie: You’re very kind to ask that. I would say that the major lesson of my career
is that if you choose to really go for it, which I did, success and failure are two different
sides of the same coin. What do I mean by that? I had the opportunity and privilege of running
Merrill Lynch, running Smith Barney back when I was at Smith Barney, Citi president, I was
chief financial officer of Citi. I’ve also been publicly fired twice front
page of the Wall Street Journal stuff. Those are not actually in opposition. Those are two sides of that same coin. That because I was out there working at such
a high level and taking the risk that was needed in order to take, to have the opportunity
to do the big jobs and to take them, I put myself out there so that when my boss says,
I was out there, I was running fast, the businesses were taking risks, and then when new bosses
came in they were like, “Wow, no, no, thank you.” Sallie: Always I’d love to say, the only thing
that was different about when I was at the top of the industry and when I was getting
fired was my boss. And then the fact that I was delivering about
the same results, working hard, shaking things up, try to put the client first. And there were bosses who promoted me because
of it and said, “That’s different,” as doing a boss who didn’t want me around because I
was doing things different. And so I think in popular culture, maybe there’s
a moment of struggle. Oh my start up. Oh, we had a minute in between buying a foosball
machine and the big office with the brick wall. Kathryn: But the narrative is going to the
right. Sallie: Right. But for 30 seconds it was like, ah, Marc Andreessen
didn’t invest in us. Oh no, now, oh my gosh, that’s okay. Now we’re Uber. It just didn’t happen that way. It doesn’t happen that way. And I don’t have to tell you, you’ve had ups
and downs as well and particularly as women, whereas women would just take them so much
harder which is because we were pushed to get the A’s, because we performed well in
school, those kind of failures, we’re not ready for them. And we’re embarrassed by them. And that’s what the research says. And so I just, I think it’s, if you choose
to have a big career, work hard, take the risk, go for it and recognize that it’s not,
if you fail along the way, it’s when you fail. And people are just often not willing to accept
that risk of certain failure at points along the way in order to have the success. Kathryn: Yeah. And I think also part of your story is the
fact that, you leaned in to who you were and sometimes that puts you on top and sometimes
it doesn’t jive with someone else’s sense of what they want, but rather than contorting
yourself to be different, it’s sometimes you just got to accept that this is not working
and move on. And I’ve struggled with that in the past,
but I think that’s incredibly powerful advice. Sallie: Oh my gosh, so important. Final thought, I think that’s really Kathryn,
the thing we don’t talk about. That sometimes it’s not your fault. Sometimes you’re actually just working for
the wrong person who is never kind of promote a person like you. That the last 12 people they promoted are
nothing like you. And by the way, they’re probably, they could
be a really, really nice person who has a daughter at home and who went to an unconscious
bias training class and all that stuff. And I don’t think quickly enough we say, “You
know what? It’s not me. It’s him or her.” And recognize that the only option then, because
he or she has been in a job for 15 years, probably go anywhere either. Sometimes we just have to leave. Thank goodness we have a Muse to help us do,
leave when we have to. But I think we tend to stay in jobs too long
and blame ourself. Kathryn: Yeah, I think so many of us are socialized
to take the blame, to take the responsibility, to say it’s probably just me. I should work harder. I should be better. I should be perfect. And sure. Yeah, make yourself better. But I do think that’s a really important point. Sometimes it’s a letting go and moving on
and finding a place where your style, your gifts, your strengths are really appreciated. Sallie: Yeah that’s right. Kathryn: Amazing. Well Sallie, this was incredible. I feel like we could have talked for another
hour, so maybe we’ll have to have you back on at some point for round two. But thank you so, so much for chatting with
me today. Sallie: Thank you for having me Kathryn, take
care. Kathryn: Take care. And by the way, for those of you who are listening,
if you want to learn more, you can follow Sallie on Twitter at Sallie Krawcheck @ S-A-L-L-I-E-K-R-A-W-C-H-E-C-K. You can also check out Ellevest on The Muse,
so go to, search for Ellevest. You can learn more about what it’s like to
work there and apply to their roles. Bye bye. Kathryn: The Muse is the best place to research
companies and careers. More than 75 million people each year trust
The Muse to help them win it work, from finding a job, to building the skills to help them
grow and advance. Organizations use our platform to attract
and hire talent by providing an authentic look at company culture, workplace, and values
through the stories of their employees. Speaker 3: You’ve been listening to the New
Rules of Work. To learn more about this episode and to research
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