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The Woman Who Made It on Wall Street

Lessons from Sallie Krawcheck's rise.

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Women are the foot soldiers of the business world, but they are rarely the generals. So it's worth asking why no female has been as successful in scaling Wall Street as Sallie Krawcheck, Bank of America’s (BAC) wealth management chief. While other women struggle to avoid the "glass cliff," she barely walks into a bank before she is groomed as a future CEO.

Krawcheck is best known for the kind of media adoration you can't buy—for instance, that famous cover story from Fortune magazine, “In Search of the Last Honest Analyst.” But her rise began well before—and was speedy. In six years Krawcheck went from junior banker at Donaldson Lufkin & Jenrette to chief executive of research firm Alliance Bernstein. She clocked just two years at Citigroup (C) before becoming CFO in 2004. Nine months after a falling-out with Citigroup CEO Vikram Pandit in 2008, she was back in the game with a better deal: Bank of America wooed Krawcheck, just 45, to run its mammoth brokerage. And within six weeks on the job, she was named as a possible successor for its departing CEO. But as successful as she has been in winning over the media, interviews with former colleagues show Krawcheck has been just as effective in winning over her colleagues, too. Her rise has not been flawless and is still not assured after her troubled turn as Citi CFO. But it is very real.

Even so, Krawcheck's career is an anomaly at a time when women's progress in the workplace seems bleak. Women are breadwinners for 40 percent of American families, according to Maria Shriver, but they're not bringing home very much bread. In a year in which the president signed a fair-pay act to equalize the sexes' salaries, the handful of female CEOs earn a pittance compared with their male counterparts. The financial crisis has not changed attitudes; we may know that women are more risk-averse, but both sexes would still prefer to entrust their money to men. Female executives have rarely lasted long in prominent positions and often lose their reputations when they leave: Think of Carly Fiorina at Hewlett-Packard (HP), Erin Callan at Lehman Bros., or Zoe Cruz at Morgan Stanley. Those who soldier on pay the social price for their rarity and often struggle to plug into men's networks.

The secrets of Krawcheck's success, however, hinge on her social skills. Primarily, Krawcheck knows how to avoid making enemies, which makes her painless to promote. Second, she has built a reputation as Mrs. Clean, which is a hot commodity on a tarnished Wall Street. Third, Krawcheck borrows management tricks from both genders. While her colleagues note that she has trademark "female" traits—a warm interest in others' feelings, an obsession with preparation, an aversion to financial risk—she mixes them with frank talk and open ambition. A former Smith Barney colleague attributes her success to her ability to read people—and a room. "Sallie understands people, which is something, regardless of gender, that you don't often see in current executives."

Krawcheck's ability to avoid making enemies grows out of her relentlessness in courting friends. She has started all of her jobs with a charm offensive on co-workers and clients. After only a few weeks at Smith Barney, she flew down to Jackson, Miss., to hug little old ladies and shake hands with Smith Barney advisers who were struggling to disown Citigroup's controversial ties to WorldCom—particularly because WorldCom's president was a Jackson hometown boy. Krawcheck did it again this summer by wooing the toughest group at Merrill Lynch: the firm's 16,000 financial advisers who often opposed the executives. Before she had a desk at the BofA building, Krawcheck lunched with a former Merrill CEO to get the dirt on the business. On the CEO's advice, she made a prompt introductory phone call to Travis Musgrave, who was the top representative of the firm's "Thundering Herd." She accepted his invitation to spend a September evening in Orlando with the 13-member advisory board of the brokerage and 700 of the firm's top-performing brokers, according to a person familiar with the matter. Krawcheck stayed four days, waylaying brokers in elevators and hallways to quiz them about the business. And she won them over, according to a senior financial adviser. Krawcheck sought and gained the endorsement of a group that could have destroyed her Bank of America career before it started.

Krawcheck is also burnished by her reputation as Mrs. Clean. She built her name at AllianceBernstein, a research firm that owed nothing to Wall Street investment banks. Krawcheck was quick to show her skepticism as an analyst who pushed Wall Street CEOs for information: In 2002 she told Fortune, "If I went into a meeting with a company and it turned out they were telling the truth, I was pleasantly surprised." The Fortune cover made her the face of Wall Street's last remaining shred of credibility. Sandy Weill, the chairman of Citigroup, hired Krawcheck and her spotless reputation to rehabilitate Smith Barney in the middle of the WorldCom, Enron, and "boom-boom room" scandals. Last year, Krawcheck was willing to throw her career away for a principle: She believed Citigroup should pay restitution to some clients who lost money on the bank's auction-rate securities and hedge-fund investments. It was a point of tension with her boss, Pandit, but it was a good way to go. It didn't block her way to Bank of America, which needed credibility with clients.

Krawcheck's reputation for honesty comes from her penchant for startlingly frank observations. At the Forbes Executive Forum a few years ago, Krawcheck told the crowd about her first husband's affair, conducted because of her extended work hours and his career jealousy. On Wall Street—as in Washington—the truth still has the ability to surprise. As an analyst, she used to tell an aggressive joke: "How do you know when management is lying? Their lips are moving." When asked why more women didn't rise in finance, Krawcheck didn't blame the boys' club: "There is something about women getting tired. They get to be 30 and they get tired." Even so, Krawcheck rarely talks about her gender, which would build barriers with male colleagues—but often discusses the challenge of raising a family, which men can theoretically relate to. She is something of a maverick among female executives, because she is all too willing to portray her struggles as shared, while many female executives want to project Superwoman. This makes Krawcheck easier to relate to, because her co-workers see what she's up against.

But Krawcheck's aura of amiability did not protect her from the biggest challenge—and possible hurdle—in her career: her less-than stellar turn as Citigroup's CFO from 2004 to 2006. She received low marks from analysts and fund managers who wanted a clearer picture of the company's financial position, and who criticized her for the bank's high expenses and its outsized risk-taking. However, she rebounded from the job, while other Citi CFOs have since faded into relative obscurity. So her social skills and past success at least bought her the benefit of the doubt from her bosses: Citi CEO Charles Prince gave her a juicy assignment at Smith Barney even after the lackluster tour of duty. Several people familiar with Krawcheck's tenure as Citi CFO say Prince didn't take it too hard on Krawcheck because he may have recognized that no one could untangle the twisted financial roadmap. While this kind of thinking protected her internally, the message never reached the outside.


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