Dawn Lepore: Start Up Strategist
A Dow Jones research report released late last year revealed that venture-backed companies with women in senior positions are more likely to make it than those with men occupying executive positions. Dawn Lepore’s career definitely supports that conclusion—she’s a specialist in pushing growth at startups. Her most recent corner suite was in San Francisco, where she served as interim CEO of online loan broker Prosper.com.
Lepore, who recently joined the AOL board (“I think highly of the job Tim Armstrong is doing”), is also the former CEO of Drugstore.com, which she joined in 2004 and led until its $409 million sale to Walgreens in 2011. The online pharmacy was a tempting target because it had $456 million in sales in 2010.
Prosper.com grew fast under Lepore’s leadership. The 7-year-old company eliminates the middleman by hooking up willing lenders with business startups in need of capital, and it has made more than 60,000 loans totaling $400 million since its launch in 2006. Prosper Marketplace was fourth on The Wall Street Journal’s 2012 list of top-10 venture-backed companies.
“My short-term mission at Prosper was to improve the execution of the company, bring in new marketing and technology officers and organize the latest round of funding,” Lepore said. “The company needed a five-day-a-week CEO, which it now has—I was working part of the time from my home in Seattle.”
Today, Lepore is putting together a portfolio of board and advisory positions, but she’s still interested in a CEO job if it’s the right fit. “The whole area of peer-to-peer lending is very interesting to me. I’m fascinated by innovation in financial services, and there’s a wealth of information available that companies can use to give consumers advice or help them to find the best price. There is opportunity there for some creative enterprise software.”
Lepore came up in an era when female executives were a rarity, and their potential for success in top management positions largely untested. Lepore is emphatic on that score. “I don’t know how many female CEOs and chief information officers there are today, but I’ve often been in boardrooms where there were 15 men in blue suits and me. We know now that women can be—and are—very successful as business leaders.”
Betty Spence, Ph.D., president of the National Association of Female Executives, seconds that. “When women take the helm of companies, they do succeed,” Spence says. “Women are now nearly half the workforce and half of management, but a tiny proportion of senior management. And there are still very few women heading Fortune 500 companies, 4 percent, if it’s even that. So women like Lepore—and Sheryl Sandberg at Facebook, Ursula Burns at Xerox, Ginni Rometty at IBM—they’re in the spotlight, which is a tough place to be. These women are role models until something goes wrong, then they’re pariahs.”
“A Sucker for a Challenge”
That phalanx of blue suits was a daunting obstacle, but Lepore was ready for it. “I do think you need a lot of resilience and commitment, and I’ve always been a sucker for a challenge. There must be something innate to my personality—if you tell me I can’t do something, I want to prove I can.” And Lepore has proved that—in 1999, she appeared for the first time on Fortune’s list of the 50 most powerful women in American business.
“A bit of luck” landed Lepore on her career path after she graduated from Massachusetts’ Smith College with a music degree. “I read a Cincinnati Bell ad looking for people with a math background, and that was one of my favorite subjects so I took an aptitude test and did well on it.”
Through that early job, Lepore learned computer programming, and a career was born. “I found I really loved using technology to solve business problems, and I was good at thinking strategically and communicating solutions to other people.” In 1983 Lepore was hired at Charles Schwab as manager of the company’s information center, and “I thought I was going to be fired on my first day.”
The resident computer expert, angry that a woman was awarded the position he wanted, handed her a screwdriver and went home for the weekend—leaving Lepore to prepare computers for the staff. “Personal computers were just coming onto the market, and it was early enough that they still had to be assembled—the memory chips came in separate containers. I had no idea what to do…. Luckily, my husband is technical, so the two of us went in over the weekend and put 30 computers together.”
Lepore didn’t get fired: Instead, despite lacking a master’s degree in business or computer science, in 1993 she was promoted to become Schwab’s chief information officer. And that led to another life lesson. “It was an era of huge changes in technology. I felt I had to prove to everybody that I was up to the job. I felt I couldn’t show any weakness, but I was also not showing my personality, being a team player, or letting people connect with me on an emotional level. And I got called an ‘ice queen,’ which was so embarrassing.”
Lepore’s boss gave her the right feedback. “He said, ‘Listen, you’re terrific, I believe in you, but you have to get better as a leader. You have to let them see you’re human.’ I got the message. You want your direct reports to have personal loyalty to you. And that doesn’t mean coddling them—it means letting them know you expect a lot but in exchange, you’re going to help them grow, engage and meet their personal career goals.”
Things got better, and Lepore thrived at Schwab. In 1995, she helped pioneer the firm’s web-based stock trading, which grew to 25,000 online accounts in just a few weeks. Terry Pearce, a former executive vice president of Schwab and co-author with the company’s former CEO, Dave Pottruck, of the book Clicks and Mortar
, said Lepore was a forceful presence at the company. “Dawn has a good, strong masculine streak in her that doesn’t suffer fools lightly, but she is also very thoughtful,” Pearce said. “I think her training in music, her broad interests, also helped her. She was very well-respected.”
Lepore was to spend more than 20 years at Schwab, and while there she went through one of the biggest workplace challenges for female executives: having a baby while juggling a full schedule. That can certainly put a female CEO in the spotlight, as happened when Marissa Mayer gave birth last year, soon after becoming CEO at Yahoo. Lepore, 44 years old when she gave birth to her son, Andrew, says that “becoming a parent is a very humbling experience. It gives you a sense of humanity, you learn from it, and you can bring that learning into the workplace with you. I’m a better leader because I became a parent.”
Lepore left Schwab for the leadership role at Drugstore.com in 2004. She endured some bumps in the road during her seven-year tenure at the web-based pharmaceutical company. Drugstore.com built an online store for Medco Health Solutions and based its projections on revenue from its partner. But Medco stumbled badly, and by Lepore’s reckoning, Drugstore.com lost 70 percent of its market cap in a single day. That experience was also a lesson—in the importance of having a good relationship with the company board.
The sale of Drugstore.com to Walgreens left Lepore in a good position, with $9.1 million in stock and options on top of the $6.2 million salary and other benefits she accrued between 2004 and 2009, according to The Seattle Times. She was a board member of The New York Times and eBay. Lepore could have retired, but she loved being a CEO: “It’s what I do for a living.”
“I had to decide what to do next,” Lepore says now. “For the first time in 30 years, I didn’t have a big operational job. I’d gone right from Schwab to Drugstore.com, reinventing myself along the way. The good news is that it gave me time to look around, and I saw that so much was happening.” Lepore says she loved her time at Schwab, but leaving there opened new doors.
It’s important to know when to move on, she says. “When it’s time to leave a company, I think you know it. If you stop learning and aren’t excited about what you’re doing, if you feel you know what the people around you are going to say, or they know what you’re going to say, then it’s time to leave. You have to ask yourself, ‘Am I still growing?’ ”
It’s equally important to know when someone who reports to you should be let go. Lepore doesn’t make that decision lightly; she’s learned that “loyalty is very important. It’s hard for me to give up on somebody just because they may be going through a bit of a flat spot. But finally you realize it’s time to let someone go. If you’re working around them, if you’re double-checking everything they’ve done, it’s time.”
Challenges at Prosper.com
Lepore’s transition to Prosper found her doing a lot of hands-on work. “The company is a startup, and I was doing a lot of marketing to build traffic to our sites. When I arrived, I could see what needed to be done to improve operations—there was pattern recognition that I brought from Drugstore and Schwab.”
According to Prosper, the company has seen 100 percent year-over-year growth in dollars since 2010, and has seen average returns of 10 percent over the past three years. It’s not profitable yet, but Lepore did her best to get it there.
When working as a CEO, Lepore spends most days in operational meetings. “I make sure everybody’s engaged—that they understand what our goals are. I’m meeting with and measuring people, making sure they’re in the right jobs—meeting with the board, meeting outside investors, bringing people together. The idea is not to personally have all the answers, but to bring people together and make sure they’re on track.”
Employee engagement is important to her. “People need to have context for what’s happening around them…. The workforce has to be getting feedback so people know how the business is doing and where they themselves are going. The more we engage with employees, the more they understand what we’re trying to achieve.”
Some leaders are shooting stars, radiating a lot of light in one highly visible position, but then burning out. Carly Fiorina’s tenure at Hewlett-Packard comes to mind. Lepore has survived in a series of demanding positions because she’s evolved as necessary to keep herself relevant in rapidly changing times.
“It’s still not a level playing field,” Lepore says. “There still aren’t many women on boards or in CEO positions. It’s harder for women to get the big jobs. You have to prove yourself, and I think I’ve done that.”