The One Value That Theranos Got Wrong
The industry was left to take notes on what not to do.
I first saw Elizabeth Holmes, CEO of Theranos, speak at a Wired Health conference in 2013.
She was the highlight of the event, an underdog with a game-changing technology that could improve millions of lives and disrupt the entire blood testing industry. David taking on Goliath.
In 2015, The Wall Street Journal uncovered the truth, Theranos became the Enron of healthcare, and the industry was left to take notes on what not to do.
Some learnings are obvious: don’t falsify results, don’t put patients’ lives at risk, and practice internal self-regulation with high ethical standards.
These are all hopefully obvious, and easy to implement, but the deeper issue requires more work.
The opposite of fraud is not authenticity.
In other words, just taking steps towards not becoming the next Theranos does not make us authentic.
Authenticity is much, much more—it’s a process that requires ongoing commitment, reflection, and re-alignment. It requires being honest about who you are. It requires staying true to your mission and vision.
Authenticity also requires communicating openly and being transparent with clients, investors, patients, and partners—which includes sharing what problems exist today and what challenges lay ahead.
As a founder, I’ve noticed many companies mimicking the famous “fake it ‘till you make it” Silicon Valley ideology.
This does not work in healthcare. With real lives on the line, the stakes are too high.
Authenticity can’t be a best practice, it needs to be the standard.
Authenticity isn’t easy. When starting a new company and building from the ground up, you and your entire team have a strong desire to make the world a better place; you’re aiming high. You are bringing to the world a shiny, perfect solution to a challenging problem.
You need people to believe in you, invest in you, trust in you.
Yet, once vision meets reality, everything may no longer be so pristine.
In healthcare, improving patient outcomes is the most valued objective and one of the core pillars upon which the best companies are built. So admitting to facing obstacles in achieving such an objective can be terrifying because it could threaten your progress, and put you, your vision and your entire company at risk.
When that happens, as it inevitably does, that’s where authenticity really matters.
Principles to prioritize authenticity.
With everything going on, authenticity can easily get out of focus. Thus, we’ve embedded two authenticity-inspired core principles into everything we do:
- Data Transparency: We share raw data. As a result, clients and partners can conduct their own internal analyses and deep dives. But even more fundamentally, everyone can then see exactly what we are seeing.
- Sharing Challenges: We share the issues we are facing, too, where vision doesn’t meet the reality. We point out the problems, what we are concerned about, and what we’re doing about it. They thus see where we are focused.
This sounds simple, yet it’s not always simple to do. But it’s worth it.
The 6 benefits of authenticity Theranos missed.
Being authentic makes us a better company.
Systematically implementing these principles has required proper infrastructure and a deep commitment across all teams and team members. And, at times, this has also required tough conversations when a lot is on the line.
But in the end, the following benefits have made the effort more than worthwhile:
1. Putting our problems in context. Clients, investors, and partners each have a different perspective. This variation has helped us better reframe certain ‘big’ (from our perspective) problems to simple problems that are expected, common, and very surmountable. And sometimes that re-framing has even helped us realize that the original problem was actually not worth solving in the first place.
2. Building a better product and processes. External transparency means our internal processes get more sunlight. We have thus learned to identify potential problems (and client questions) ahead of time. Our internal dashboards are designed now to paint a more dire picture to help us catch and address issues sooner.
3. Seeing past blindspots. By sharing raw data, we get more eyes helping us see what we may not have noticed ourselves. At the same time, this has allowed us to realize the sometimes invisible, downstream value of our work. For example, as we shared the challenges we had in helping one patient address a medication cost issue, we unknowingly helped our client identify and improve their entire internal system (and department) workflow.
4. Go further, faster. “If you want to go fast, go alone. If you want to go far, go together.” We can often do both since many of these problems are not new; they’ve come up before. And so when our clients share what they’ve tried before to address those problems, what worked, and what didn’t, this helps us short circuit many weeks and months of potential false starts.
5. We have more people cheering for us. Only if a challenge is shared can overcoming that challenge be appreciated. If a client or partner doesn’t know there was a challenge in the first place, they can’t appreciate the solution we were able to find and implement. Authenticity brings everyone together in the downs and ups.
6. Building a reputation worth having. It’s valuable to be known as a company that confronts challenges head-on and proactively collaborates with clients and partners to solve those problems. You’re then not just a vendor, but a valued expert and even a trusted advisor!
In the end, we’re in healthcare because we are all trying hard to help make the world a better, healthier place.
And so while stories like Theranos are painful to hear, they do force us to pause, reflect, and realize that while authenticity might be a slower, more painful process, it’s the more meaningful pathway to creating a lasting impact.