As a Black female CEO, Shellye Archambeau is no stranger to adversity. Becoming a leader was her goal since high school, and she achieved it through decades of hard work and skillful decision making. Now she faces her most critical leadership decision. The software company she leads, MetricStream, is losing customers, hemorrhaging cash, and struggling to make payroll. Several board members are pressing to sell the company even at dismally low valuations. She and her board chairman need to decide and act swiftly.
Harvard Business School professor Tsedal Neeley discusses Archambeau’s leadership style and the importance of developing resilience, particularly when managing through a crisis, in her case, “Shellye Archambeau: Becoming a CEO.”
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BRIAN KENNY: The Black Lives Matter movement has shined a light on discrimination in every aspect of American lives, including the C-suite. And here’s what it shows, of the chief executives running America’s top 500 companies, three are Black. That’s right. Three. 37 are women, none of whom are Black. Dive a little deeper in the org chart and you’ll find that just 3.2% of all senior executives in the Fortune 500 are African-American. And it’s been that way basically forever. Over the past two decades, the numbers of Black and female executives in the top ranks of business have remained frustratingly low. With numbers like that it’s hard to imagine that any young Black girl would ever aspire to one day become a CEO, but that’s exactly what the protagonist in today’s case did. Today on Cold Call, we’ll discuss the case entitled, “Shellye Archambeau, Becoming a CEO,” with case author Tsedal Neeley. I’m your host, Brian Kenny, and you’re listening to Cold Call on the HBR Presents Network. Tsedal Neeley studies how leaders can scale their organizations by developing and implementing global and digital strategies. She also leads the leadership and organizational behavior course in the MBA program, which focuses on how to lead effectively. And she is the author of a book coming out early this spring, tell us what the title of that book is, Tsedal.
TSEDAL NEELEY: “Remote Work Revolution: Succeeding from Anywhere”
BRIAN KENNY: Welcome back to the show. You’ve been with us a couple of times. It’s great to have you back on.
TSEDAL NEELEY: Thank you so much, Brian. I love being on your show again. Thank you for having me.
BRIAN KENNY: Let me ask you to start by telling us what your cold call the in the classroom? How would you start this case?
TSEDAL NEELEY: The way this case ends is by our protagonist Shellye Archambeau in this crisis moment where she has to make a decision on whether she saves the company that is hemorrhaging money, that is seeing all of its operations plummet, getting such pressure from the board and pressure from her own organization to either sell, or save. And so we end at that point and the question that we tackle when we open is number one, should she sell or save? And did she even make the right decision to take this job in the first place? So the cold call begins: Was it a mistake for her to take this job? Look at what she’s landed.
BRIAN KENNY: And we’re going to hear a lot more about her. She’s a super interesting protagonist in this case. Let me ask you what prompted you to write the case?
TSEDAL NEELEY: The interesting thing is we started writing the case two years ago. In fact, before we experienced the George Floyd death, Black Lives Matter being so prominent, we started writing the case because I wanted to make sure that our required course for each and every one of our MBA students, had a Black CEO protagonist. And I wanted to make sure that we even had a female, Black female protagonist, who’s at the top of the house, and Shellye Archambeau fit that bill so beautifully. And then the situation that she finds herself in, not once, but twice felt quite relevant. And so that’s the reason why I pursued this case. And on top of that, what a role model she is when it comes to leading in times of crisis, when it comes to resilience, all topics we cover in the case.
BRIAN KENNY: Tell us a little bit about Shellye. What was her childhood like? What was her situation growing up?
TSEDAL NEELEY: Shellye grew up at a time where there were civil unrests in the 1960s. She grew up at a time when Martin Luther King Jr, was looking to gain rights for people of color. And her family had to contend with a lot of the hate, the racism, the discrimination that was prevalent at that time. And so when she was growing up, she tells the story of her family having moved to a neighborhood where while she would be walking to school she would be teased, she would be harassed all on the way to school related to her Black race. And so she grew up in an era where she experienced a whole lot of hate and racism, but it never defined her. As you look at her story, she’s someone who at some point decided, and influenced by her parents, how do I respond to the world that is before me? So when she was in high school, she had a guidance counselor who planted the seed of leadership in her mind, as she was describing all the various things she can consider as she would explore colleges, etc., Shellye was a high achiever. Her guidance counselor said to her, “Huh. Maybe you want to be a CEO because you like to lead. And you have all these leadership activities at the school,” which she decided at some point was going to be important for her.
BRIAN KENNY: And just pause on that for a second, because I was sort of astounded by that because so often we hear about guidance counselors giving the wrong advice or shooting for the lowest common denominator for their students. And here, I thought, this guidance counselor was somebody who read her correctly and was trying to motivate her.
TSEDAL NEELEY: Wasn’t that amazing? I couldn’t agree with you more. You never hear guidance counselors who are not only helping students to get into just the very best schools that they can get into, but also saying, why don’t you aspire to become a CEO? And Shellye had never heard of the word, but became intrigued and interested and started to research what CEOs do. You were right. She read the situation right. She understood Shellye and Shellye’s talents and skills and put it together in a way that really spoke to Shellye. So, Shellye, since high school decided, okay, when I grow up, I want to become a CEO.
BRIAN KENNY: Amazing. Yeah. Not something that most young people would say, right? People want to become lots of other things, but CEO is probably not top of the list for most people. So, that’s great. And it shows her vision. And so she applied to school, what was the college application process like?
TSEDAL NEELEY: So when she applied to schools she looked at: where can I go without needing advanced upon advanced upon advanced degrees that will equip me to do the CEO position. And so she lands at Wharton where they have an undergraduate business program. She applies there and she sends them a little note that says, “Please accept me because I’m only applying to you.” And it works.
BRIAN KENNY: In a day and age, when students are applying to 10, 15, 20 schools, that’s a pretty amazing thing.
TSEDAL NEELEY: She understood that Wharton would be the institution that would equip her in an undergraduate way. Meaning the four years that you would spend there to send her off to become the CEO that she desired to be. Other schools don’t have undergraduate degrees, top schools, for example, Harvard doesn’t have a business undergraduate degree. So she was looking at the right places.
BRIAN KENNY: She also, at this time started to look at internship opportunities. And you mentioned her parents who, I think, one or both one worked at IBM, is that right?
TSEDAL NEELEY: Yes. So she wanted to do two things, internship opportunities to save money so she can begin her life. So she was concerned about economics, but she also wanted experience. So she lands at IBM where she starts there in the summers. And one of my favorite stories is when she had this reception type role, and her manager at the time suggested that she would contact and hold meetings with other people who are doing similar work so that she can learn about the company, about the role, about the environment. So what does Shellye do? Shellye decides actually, I want to reach out to executives. I can learn about what it means to lead in an organization. So instead of seeking others who were doing the type of work she was doing, she actually reached out to all of the executives, requesting meetings so she can learn more. And most of them granted it.
BRIAN KENNY: Yeah. That’s great. So here she is kind of charting her course to the C-suite. She’s got her sights set on that, and IBM is what, probably one of the largest companies in the world. So she wasn’t shooting low. She was shooting high.
TSEDAL NEELEY: She was, she was. And after her time there as an intern, during her summers, she joined IBM full time.
BRIAN KENNY: What was that like?
TSEDAL NEELEY: That was pretty spectacular. What I like about her time at IBM is that she quickly ascertained that she needs particular skills in order to become a leader in an organization. And those skills included sales. So she went into sales and really learned how the revenue side of an organization worked. She also took a position in their Japan office, which is another thing that you want to do when you’re climbing the ladder of any company is understand how the global dimension and global leadership works. And she did that as well. And so she actually took the types of positions that would give her a well-rounded background. I gave examples of a couple, but she sought to learn and grow and enhance all of her skills throughout her time at IBM.
BRIAN KENNY: And never shying away from challenges being in Japan as a Black woman must have been difficult. I think for women in business, in Japan, period, it’s a difficult place to excel.
TSEDAL NEELEY: That’s right. And interestingly enough, one of the things that you hear Shellye say a whole lot, and we document in the case as well is she looks at situations and then she says, “Okay, what can I do to improve my odds in this scenario?” So she went in with the type of attitude that allowed her to increase aspects of her background and experience, meaning her being an outsider, her being able to learn and contribute very quickly. She really dialed those things up as opposed to previous leaders in the Japanese office who wanted to come in and bring in their IBM identity and impose it in that market, as opposed to learning what the local market needed, and being able to serve the local market from a very fresh perspective. And she did very well while she was there.
BRIAN KENNY: Yeah, but I don’t want to forget about one important fact because while she was at IBM, she also met her life partner, Scotty, can you just talk a little bit about that and the importance of them in the case?
TSEDAL NEELEY: Yes, yes, it’s a very interesting love story. So she meets Scotty, Clarence “Scotty” Scott, when she was a sophomore in college and Scotty is older. He’s about 18 years older than her. And when they would be in various events at IBM, IBM at that time, would have socials, et cetera. Scotty really would gravitate towards Shellye and started to pursue her. And she often talks about how initially she was like, “Man, that man’s a bit too old for me.” And not only that, Scotty was a former NFL player. He had this air of confidence. He had all of these incredibly important roles in the company. So Scotty was a generation beyond where she was, but he was not to be deterred. He was very interested in Shellye. And so eventually she talks about how she says, “Hm, let me just get this out of my system. I’ll go out with him. I’ll figure out what’s wrong with him, and then I’ll be done.” Because she was attracted to him. And so one date led to another date, led to another date, led to another date. And they got very serious quickly. And she talks about how one day they were both sitting in Scotty’s car after a date and Scotty was getting increasingly serious with her. And she says to him, “You know I’d like to have kids, right?” And Scotty says, “Yeah, right. I know that.” And she says to him, “My mom stayed home when I was growing up. And I liked that because I was the oldest. So I’d come home and get snacks. And mom would be there with me. I can tell her about my day and you and I might be professional and career oriented, but I think that’s a tradeoff we should have. I want someone to be home with the kids.” And Scotty says, “That would be nice.” You know, he’s kind of going along with this, he’s loving this conversation. Then she says, “Good, but I don’t want for it to be me.”
BRIAN KENNY: I saw that coming.
TSEDAL NEELEY: Uh oh.
BRIAN KENNY: I don’t know if Scotty saw it coming but I did.
TSEDAL NEELEY: You did? Maybe, maybe you’re more prescient than Scotty because Scotty for moment had to think. But you know what? It was really interesting. Scotty, who’d had a pretty rich and full career by the time they got to this point in their relationship, he says, “Okay. I like to work, but I’ve worked my whole life. I’ve had three different careers and I’ve been working since I was 10 years old. I could probably do that.” It took a while for them to get to this point, they had kids, the kids were five and six years old when Scotty actually took over as the stay-at-home dad. But it was something that they talked about early. One of the reasons I loved this case too, in addition to some of the parts that we discussed, is the counter normative aspect of it. That in fact, it wasn’t a heterosexual couple with the male going to work, the female, taking a subordinate role, even if she was a professional, because of family, it was a counter normative scenario that would tell anyone who uses this case, that families and family structures don’t always have to look as you would expect, things are and can be different. This was one more thing that this case could provide.
BRIAN KENNY: Yeah. A really, really important point. So, let’s talk a little bit about where her career starts to take a turn now, because now we start to get into the more of the business oriented aspects of the case. She decides to leave IBM and what happens then?
TSEDAL NEELEY: She decides to leave IBM. And she now is contemplating a job offer that came to her through Vinod Khosla, who at the time, wanted her to take a CEO position for a company called Zaplet. The problem is this was during the dot com bust, where there were hundreds of CEOs out in the world, looking for CEO positions, the company Zaplet at the time was not doing well. And the prospect of it was unclear. And you just had the economy in a free fall. So, this job offer couldn’t have come at a worst possible time. Something that she had spent her whole life preparing for, but it was risky. And at the same time she had mentors and friends like Ben Horowitz, who said to her, “I don’t think you should take the CEO position, wait for another one.” So Vinod Khosla, this is why this case is interesting, another Silicon Valley expert, pioneer says, “Here’s a job offer.” Ben Horowitz, another Silicon Valley pioneer, expert says, “Don’t do it!”
BRIAN KENNY: So there’s some real inner conflict there that she’s got to work through. Why not just stay at IBM and ride it out. Seems like she was doing really well there.
TSEDAL NEELEY: That is what one would expect. But as you will see in the case, she felt like she had hit her limit at IBM and staying at IBM was not going to grant her the opportunity that she wanted to be the head of a company, to lead a company, to lead an organization. So she felt like she needed to leave IBM and Silicon Valley was the right place to go. She knew and understood technology, even though she herself was not an engineer, but she had a sense that technology was an important sector and she wanted to lead in that environment. So she moved to Silicon Valley along with her family in order to pursue potential CEO positions. And this was it in her mind, it wasn’t the best position, but as she contemplated her situation, as a Black female executive, she thought that she didn’t have a lot of great opportunities, that she should take this job and do the best possible turnaround job with Zaplet. So she went for it.
BRIAN KENNY: How does she approach this? Because, as you said, this is a technology market that is facing huge gyrations and the risks are pretty high.
TSEDAL NEELEY: Very high. And her approach was, “I don’t have a lot of options. I’m going to take this position.” And you see in the case where I detail the extent to which she had experts look at their technology and learned that they had top of the line technology, but she also realized that she needed to create a market given the dot com scenario that everyone was facing around risk management, compliance and risk, and was very creative to determine that if they took the Zaplet technology as a foundation and created a whole new market that could help companies who were trying to manage risk, that perhaps that they would have offerings that would allow them to create a market and sell to companies.
BRIAN KENNY: The irony wasn’t lost on me that she was taking this huge risk herself and the business that she ends up leading is all about risk management.
TSEDAL NEELEY: Isn’t that interesting? Took a big risk, created a risk management or a whole new category that investors and analysts hadn’t considered before and before long, and it took several years to get there, before long she managed to turn the company around. Investors, analysts had bought into the idea of risk management and declared that her company, at that point, called Metronics because they merged with another company in order to fortify their offerings around risk management. They were declared as the market leader, and then lightning strikes again.
BRIAN KENNY: Yeah. What happens?
TSEDAL NEELEY: What happens is the 2008 financial crisis hits. Metronics is losing customers. They’re struggling to make payroll. Several board members are threatening to quit. Others are pressing for her to sell the company, even at dismally low valuations. And she is back where she started. Things were terrible once again, this is what happens, lightning strikes twice.
BRIAN KENNY: I’m curious now she’s in the CEO role. She’s where she’s always wanted to be. I mean, how does she take to it? What is she like, as a leader, particularly where you’re facing a crisis situation like this?
TSEDAL NEELEY: The interesting thing about her, and as you think about the scenario that I just described is that she, as a CEO, her leadership philosophy is to ensure that her team is taken care of. She takes care of her team and she understands that she from the top has to set the tone for whatever happens. And this is part of what we talk about in the case. And we explore. And as a leader, she embodies everything that one would need in terms of resilience and leading crises. And she does it expertly. And interestingly enough, one of the lessons that we teach through this case is actually a framework on resilience. There’s actually an HBR article that is related to the resilience framework that we use. And my colleague, Joshua Margolis and his collaborator have generated this framework. And this framework looks at how, in fact, people look at situations and you can see that her whole life was about preparing and being resilient. And so we actually spend a lot of time looking at, can you control the situation? If so, how do you react? What do you bring to the situation that can improve it? How do you think about timing? You need to start now as opposed to being paralyzed, and elements like those. And so if you think about her leadership approach and leadership philosophy, it’s really about ensuring that she responds in the right way at the right time, this adaptive leadership. She is someone who ensures that her team is equipped and empowered in order to do the work themselves to the point where she can be dispensable. That’s also part of her leadership approach. And you see all of it in her work, and mentoring others is a big part of what she does.
BRIAN KENNY: One of the things that struck me was how others described her as somebody who really listens well, that was said more than once about her. And, at least in my experience, finding somebody who’s willing to really listen and think hard about what they’re hearing is pretty important as a leadership skill.
TSEDAL NEELEY: It really is. And you’re right, her listening skills and her ability to not only listen, but interpret the information in a way that allows her to come up with new solutions and to find new approaches to solve problems only can happen because she listens keenly and interprets information in kind of a very perceptive way. But you know something? One thing she does talk about all the time is that she does surround herself with people who help her think through not only a given scenario that she’s dealing with, but she has regular conversations and meetings with others who do similar work as she does. So, she’s someone who has mentors, coaches, advisors, peer advisors that surround her to help her make the types of decisions that she makes. So building a network is also a big part of her leadership approach.
BRIAN KENNY: What you just described to me is also an important scene late in the case where she’s meeting with her team, they’re talking about the situation that they find themselves in. And can you describe a little bit of that?
TSEDAL NEELEY: They’re talking about the situation that they find themselves in, which is: we need to save this company or sell this company. We need to do something fast. They were at a point in 2008 where they were struggling to make payroll and their board was split. Many of them wanted them to sell the company to salvage a little bit of shareholders’ investments, while the customers were fleeing, it was a terrible time. By the way, remember she’s the breadwinner in her family. And she even had to approach her husband Scotty at this time to say, “Can we go without my salary, even for a little bit, because I need to figure out what to do here.” That’s how dire the situation was.
BRIAN KENNY: …super stressful.
TSEDAL NEELEY: It’s super stressful. Imagine every single day, every moment you’re worried about making payroll and keeping the lights on; that’s how bad it is. And that’s where the A case ends and the B case tells us what she did, how she did it and the outcomes.
BRIAN KENNY: And we’re not going to reveal that, this is like a cliff hanger.
TSEDAL NEELEY: This is totally like a cliffhanger. I think this is what makes this case particularly powerful. We’ve already used this case multiple times. And the feedback for it has actually exceeded my expectations. As you said, in your opening comments earlier, you can go in so many directions. You can talk about the situation in many ways.
BRIAN KENNY: What’s the one thing, if we’ve got aspiring CEOs in our audience who are listening, especially if they’re Black, what’s one thing you’d want them to remember about this case?
TSEDAL NEELEY: Thank you for asking that. I appreciate that question because I think it’s a very important question. I would want them to understand that resilience is a very important skill to develop. It’s a mindset, and there are ways to learn how to increase your resilience. As Shellye puts it, the title of her book, “Unapologetically Ambitious,” it’s important to be impervious to all the forces that will give you a different message about being ambitious, being someone who’s interested in the top job, and you need a plan, and resilience to get there. And I would want, particularly for Black professionals and executives, to set their eyes for the top job, learn from Shellye, learn from this case, develop their resilience and their plan and go for it.
BRIAN KENNY: I love it. Great lesson to take away. Tsedal, thank you so much for coming on to discuss the case. Really enjoyed it.
TSEDAL NEELEY: Thank you for having me.
BRIAN KENNY: If you enjoy Cold Call, you should check out our other podcasts from Harvard Business School, including After Hours, Skydeck, and Managing the Future of Work. Find them on Apple Podcasts or wherever you listen. Thanks again for joining us. I’m your host Brian Kenny, and you’ve been listening to Cold Call, an official podcast of Harvard Business School brought to you by the HBR Presents Network.