Naked Medicine

Let's Face It: Medicine is Business

Theranos’ Elizabeth Holmes is Not a Liar

(Via Quora’s Is Elizabeth Holmes a liar?)

The Theranos story has gone from bad to worse, first from the Wall Street Journal “expose” that Holmes during a live blogging event equated to “tabloid” journalism, then from a series of very public disengagements with partner corporations, and now — complying with a Herculean FDA request. This is causing some in the public to ask whether Holmes is a mastermind in a fairytale of scientific triumph.

No. Holmes is not a liar.

Holmes made bad business decisions and painted herself into a corner.

Holmes is in the class of executives that are technologist founders, which combines subject matter STEM expertise with the vision and strategy typical of C-level executives. The challenge with this class of executives is that they often do not excel in all aspects required in each role. There are incredible business chiefs that cannot do the job of their company’s top subject matter experts (SME). There are genius technologists who can rapidly run businesses of any size to the ground. It is rare to combine both SME and business acumen at the highest levels in one person.

In the case of Theranos, she was extremely effective in the beginning, when she needed to create excitement and inspire others to support her vision. She fulfilled an important role for a chief executive. She brought the technology into development, which fulfilled an important role for a technical subject matter expert, although I am less “sold” on how cutting edge her technology is given the lack of data, thus I hold her less credible on the SME role compared with the CEO role.

Companies must exist beyond initial honeymoons, and especially must weather and survive crises that are part of business cycle/life. Add to this, the “healthcare business”, where we now involve the quality and quantity of people’s lives, and we can see the level of shit-storms that can happen. In the healthcare business, I have come to believe that the question is never about “if” a shit-storm will happen to a life science company, but “when” and “how bad” a shit-storm will happen.

This is where Holmes began making a series of bad calls that snowballed into bad decisions, which became bad publicity that she made worse by more bad decisions. Now we’re at the point where we may want to believe but we harbor more doubt because of Holmes’ cumulative actions resulting from the original points of doubt.

But has Holmes fared worse in her CEO actions than other CEOs who have been embroiled in scandals? Has she behaved in a way that shows greater opacity or concealment than other CEOs under fire from public scrutiny?

I don’t think so. Holmes is acting exactly as other CEOs had to act in this situation: as directed by company lawyers, to ensure her actions are in the best interest of Theranos at this point. Even if she was the one who caused great harm the credibility and public image of the venture that has become her entire identity.

Updated: January 30, 2016 — 10:39 am

Leave a Reply

Your email address will not be published. Required fields are marked *

Naked Medicine © 2016 Frontier Theme