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Ex-Banker Heads Up 'Broad' Effort at Boosting Women in Business
Krawcheck, Leader of 85 Broads Network, Says There's 'Enormous Power in Loose Connections'
When Sallie Krawcheck's relationship with her boss, then-Citigroup Inc. Chief Executive Vikram Pandit, soured in2008, she called Zoe Cruz to meet for lunch.
Both had worked for Mr. Pandit and were two of the most powerful women on Wall Street, Ms. Krawcheck overseeing wealth management at Citi, and Ms. Cruz as the former co-president of Morgan Stanley. Until that lunch, they had never met; Ms. Krawcheck realized they should have done so sooner.
"That wasn't the right time to have established that relationship," Ms. Krawcheck recalled at a conference recently. "My generation of women on Wall Street, I think we did a poor job of connecting with each other."
She is determined to teach other women how to do it better. More than five years after losing her perch atop Citi's wealth-management group amid tension with Mr. Pandit, Ms. Krawcheck has become one of the best-connectedwomen in business. She said she turned down offers to return to corporate life and instead leapt into the rising movement for professional women, fueled in part by Sheryl Sandberg's "Lean In," a book viewed as a manifesto forwomen in the workplace.
Last year, Ms. Krawcheck bought women's network 85 Broads for an undisclosed sum. The network was created as a gathering of female veterans of Goldman Sachs and was named for the bank's old address at 85 Broad St. in New York. Its revenue mainly comes from membership dues and corporate sponsorships.
Ms. Krawcheck says she has big ambitions to transform the network of elite female financiers into a force to improve economic opportunities for women and invest in women-owned businesses--even if she isn't exactly sure how she is going to do it.
"We are at the beginning stages of determining what networks can do," the 49-year-old Ms. Krawcheck said in a recent interview, noting that, just a few years ago, social networks Facebook Inc. and LinkedIn Corp. didn't exist. "There's an enormous power in loose connections."
Ms. Krawcheck's self-reinvention has surprised many who expected her to return to finance or secure a regulatory jobin Washington. But as she trawls the women's conference circuit, recounting again and again her departure from Citi and ouster at Bank of America Corp., she says the move makes perfect sense.
"Networking is the No. 1 unwritten rule of success in business," she says as her mantra.
Central to Ms. Krawcheck's plan is expanding 85 Broad's membership from its 32,000 members, though she declined to set a specific target, and recruiting women from fields as varied as technology, health care and law.
"You get a million members and you become a strong voice," said Allyson McDonald, who is 85 Broads' president and a former financial-services and nonprofit executive.
The group wants to help women find sponsors to propel their careers and boost more of them into executive positions and onto corporate boards. It also wants to partner with companies to improve gender diversity within their ranks. From there, the women running 85 Broads hope to start breaking down structural barriers like the gender-pay gap.
As a potential model, Ms. McDonald cited retiree association AARP Inc., one of the most powerful lobbying groups inthe U.S.
"We've largely been playing a game where only a few people can win," said Nilofer Merchant, a Silicon Valley author who has advised Ms. Krawcheck as she revamps the network. "She's trying to think about: How could everyone win?"
Ms. McDonald and Ms. Krawcheck both said the group is working on ways for members to invest in women-ownedbusinesses. They have given few details but predict the investment arm will launch in 2014.
"For me, this is not a nonprofit," said Ms. Krawcheck, a multimillionaire who oversaw $2.3 trillion in client assets atBank of America. "This is a hard-nosed business opportunity."
Ms. Krawcheck's 2008 departure from Citigroup was one of the more public exits of the financial crisis, and, for the first time since her 20s, she found herself on her sofa with nowhere to go.
"I poured myself and my life and my self-worth into my job," Ms. Krawcheck said. When it came to an end, "I ran, I did yoga, I drank a lot of wine, I drank some more wine, and I spent some time processing it through." The next year, she landed at Bank of America, running the wealth-management division.
Shortly after that, the CEO who hired her retired and Brian Moynihan took over. In 2011, he eliminated Ms. Krawcheck's position.
During her Wall Street tenure, Ms. Krawcheck says she sought to outwork her colleagues and acknowledges she was more focused on corporate turnarounds than championing women. But after being ousted twice, she realized hard work could only get her so far, she said.
After leaving Bank of America, the woman who began her career as a research analyst dug back in. She read about how diverse teams improve business outcomes, how networking generates deals, and how women tend to be less willing to raise their hands for risky roles.
Looking back at her own career, she recalls that no female hedge-fund manager ever approached her with an investment opportunity, despite her friendships with some of them.
"Hell if I know [why]," Ms. Krawcheck said. "Shame on me too. You would've thought I would've said to them, 'Maybe we can make something happen.' "
It was her own web of loose connections that led her to meet 85 Broads' founder, Janet Hanson, at a New York bakery last year. There, she floated the idea of buying the network Ms. Hanson founded in the 1990s for female veterans of Goldman Sachs.
"Really, girlfriend?" is how Ms. Hanson roughly recalls her first reaction. The purchase closed shortly after, for an undisclosed amount. (Ms. Hanson says it wasn't enough for her to retire on.)
In 85 Broads, Ms. Krawcheck saw an organization in need of a revamp. She intends to rebrand the group with a new name that has yet to be announced and is preparing to launch a new website aimed at connecting members. The group will also sell corporate sponsorships, priced from $500,000 to $1 million, that include perks such as memberships for all an organization's women and personal appearances from Ms. Krawcheck.
Given the proliferation of company-sponsored women's groups and foundations like Women in the World and LeanIn, it isn't clear the world needs another professional women's network, said Anne-Marie Slaughter, a former State Department official who set off a firestorm in 2012 with an essay titled "Why Women Still Can't Have It All," about the difficulties juggling a high-powered career and a family.
"Women will have succeeded when there's no longer a need for women's groups," she said in an interview.
What's more, gathering women may do little to sway corporate decision makers, who are mostly men, say critics. And professional networks may turn off women who yearn for balance, not a senior title.
"Not everybody wants to be a corporate executive, and that's OK," said Erin Callan, the former chief financial officer for Lehman Brothers Holdings Inc. who left in the summer of 2008, before the bank's collapse.
Ms. Callan, who doesn't know Ms. Krawcheck personally, has spoken out about the personal sacrifices she made to reach the upper echelon and has expressed little interest in doing it again.
To reach a critical mass, Ms. Krawcheck must also attract members beyond the highly educated, media-savvy womenwho populate groups like 85 Broads, Lean In circles and invitation-only web community The Li.st.
"One of the main critiques that gets thrown against a lot of these groups is that they're elitist," said Sarah Jane Glynn, associate director for women's economic policy at the left-leaning Center for American Progress. Groups like 85 Broads have so far done little, she said, to broaden economic opportunities for all women by lobbying for better family-leave policies or access to affordable child care.
Ms. Krawcheck did initially worry she was taking on "a yuppie women's issue," but said she has come to believe that diversity in a company's upper ranks benefits workers at every level.
Revenue is up since Ms. Krawcheck announced she was buying the group, though she declined to disclose financial details, and thousands of new members have since joined, she says.
It appears unlikely 85 Broads will be Ms. Krawcheck's final stop. She still wakes at 3:30 a.m. skimming HarvardBusiness Review articles. She remains on the hunt for outside investment opportunities. Some colleagues speculate she could still end up in Washington one day.
Ms. Krawcheck won't rule it out, saying, "I have never planned the next step."
Credit: Sara Murray