Solve for the Underlying Problems: My Conversation with Sallie Krawcheck

On the final episode of Never Stand Still Season One, I had the honor of sitting down with Sallie Krawcheck, the CEO and co-founder of Ellevest, an innovative digital investment platform for women. Previously as the CEO of Merrill Lynch and Smith Barney, Sallie was once called "the last honest analyst on the Street" by Fortune Magazine and named one of the Top 10 Most Creative People in Business by Fast Company. These days, she is applying her no-nonsense attitude to closing the gender investing gap.

Sallie and I talked about everything from being fired from Wall Street, to her experience moving to the world of startups, and the ripple effects of the gender investing gap. Here are three takeaways from our conversation:

1. Stand against implicit bias. Just five percent of venture capital partners are women and merely two percent of venture funding goes to companies with female founders. Having been a woman operating at the highest levels in the male-dominated world of Wall Street, Sallie discussed how implicit bias has contributed to the gender investing gap. “Despite research that shows women-run businesses have superior returns…you have the biases that are so powerful they overcome the opportunity to follow the research and make more money,” Sallie explained. To tackle this challenge, Sallie and I agreed that we – employers, business leaders and upper management – must not only champion, but demand, diversity at all levels. Diverse teams are proven to be more successful, so it behooves leaders to hire diverse candidates and foster a culture that is dedicated to opportunity, transparency and accountability.
2. Look for the underlying problems. In an industry dominated by men, women simply aren’t investing as much and, thus, are missing out on an average of more than $1 million of returns in their lifetime. Sallie looked around at female-focused investing campaigns from big banks and found nothing but fluff. So, instead of creating a marketing campaign for women, Sallie built Ellevest and set out to change the underlying product in favor of women. “What we found, unlike anybody else, is that women are not motivated by alpha, and beta, and outperforming, and watching CNBC, and winning, and the adrenaline,” Sallie explained. “Women are very much motivated by conceptualizing and having us quantify for them what their goals are: I want to buy a house in four years. I want to go on a trip around the world in two years… Having a highly sophisticated gender aware algorithm, that knows women live longer than men, who knows our salary peaks sooner…Having a gender ware algorithm that calculates how much they need, and puts together an investment portfolio that is targeted to get them.”  As the founder and CEO of Ellevest, it was critical for Sallie to understand her audience and provide a solution that not only appealed to them, but successfully served them. It is imperative for both startups and established organizations to build for the needs of their audiences and adapt as needs may change. As our society shifts, so do the needs and desires of our customers.
3. Own your failures. After being fired on the front page of The Wall Street Journal not once, but twice, Sallie had to learn how to keep moving forward and turn those failures into something positive. She explained, “The way I get through it is that I recognize how enormously fortunate I am – and the individuals who are listening to your podcast are – that we were born in this time… with opportunities that just simply were not available to us decades ago,” Sallie said. “If you told me [as a little girl] I was to get fired [on the Wall Street Journal], I'd be like, ’fantastic! That I would have the opportunity to do something that anybody cared about? Like effing amazing.’ So, I love to say I loved every minute of my job, even when they were firing me.”  At a time where our industries and jobs are rapidly changing, we will all face challenges and failures that knock us down. But when we get hit, we cannot simply stand still. We must own the past and keep moving to the future.

For more on my chat with Sallie, I’ve included our full discussion below.

Thanks to all of you for following along with this first season of Never Stand Still. Leave a comment to let me know what resonated with you and what you’d like me to cover in future seasons.