On May 30, 2023, former Theranos CEO Elizabeth Holmes started her 11-year prison sentence. A fantastic fall from grace, Holmes went from being a media darling set to disrupt the diagnostic industry, promising incredible technology that would “facilitate the early detection and prevention of disease and empower people everywhere to live their best possible lives” to being convicted of fraud and conspiracy for misleading investors.
The machine that promised to run hundreds of tests on a few drops of blood never worked. They faked demonstrations to investors, and, when running tests for real patients, the labs reported dangerously inaccurate results.
So, do we really mean that everyone can be another Holmes? No, of course not. Well, maybe a bit.
We don’t think that everyone is in danger of waking up and saying, “Yes! Today is the day I will commit fraud and endanger people’s health!” But the business world is full of temptations to act against our values. Temptations that, in varying degrees of scale, might just make us a little bit of an Elizabeth Holmes.
For example, look at much of the prevailing business advice. “Be bold.” “Set Big, Hairy, Audacious Goals (BHAGs).” “Promote a solutions-focused culture.” This “reach for the stars” mentality might help you snag a punchy tagline that gets stakeholders’ attention. But is it also pushing you to promise more than you can deliver?
In life sciences especially, there are two inherent aspects that incentivize us to make bold proclamations and ignore what’s not working:
- We’re developing solutions that, if successful, can mean genuinely life-changing (and sometimes life-saving) outcomes for patients
- These solutions have a long lead time between idea and revenue, where our success is contingent on – and sometimes defined by investor funding.
With an industry largely populated by people who are interested in making things better, this good intent, this desire to aid, can end up adding further incentives to behave unethically. After all, if you truly believe that your vision is critical for people’s health and well-being, the line between right and wrong might get a little fuzzy.
Based on the Holmes story, we did a bit of what we like to call temptation spotting – identifying hotspots where a leader is at higher risk of getting sucked into unethical behavior. Here’s what we came up with:
- The period between a breakthrough idea and a marketed product – there is increased pressure to keep investors’ and employees’ levels of interest and excitement up during what can be a long, drawn-out process
- During investor updates – it’s natural to want to frame the story so that the wins and opportunities are highlighted, and problems are shoved to the back, but it can start to skirt the line between positive messaging and actual deceit
- After receiving unclear results from testing – when things are ambiguous, it’s tempting to look for reasons to either remove or include certain data points during analysis so that the desired result is seen
- When a lot of money has already been invested in a solution – the desire to cling to an idea seems to be directly proportional to how much capital and resourcing have been dedicated to its success
A visionary solution that doesn’t flex in the face of new information might miss out on opportunities to adjust the plan to meet the mission more effectively. Remember the ubiquitousness of Holmes’ nanotainer – the tiny container of blood that featured heavily in every profile of the company? The microfluidics never worked, but there were likely other ways to achieve the company’s vision of making “actionable information accessible to everyone at the time it matters.” The single-minded pursuit of that one solution meant the company doubled down in the face of challenges (and crossed many ethical lines to do so) when they could have looked for other innovative solutions.
An idea that fails is threatening when it’s the only one you have. When you view failure as a danger to your or your company’s identity, you lock yourself in and take another step toward unethical behavior. Instead, let failure and challenges be your opportunity to learn, pivot, and improve.
What to do
Systemic challenges like investor pressure aren’t going away any time soon. Instead, leaders have to recognize their responsibility and take steps to prevent the erosion of integrity.
The question then is: how do we balance the possibilities of the future with the realities of the present, in a way that supports everyone? How do we act with integrity and authenticity in a world that pressures us to push the boundaries?
These are great questions, with complicated, nuanced, and often very personal answers. Here are some One TEAM suggestions to help:
- Be intentional about culture. We recommend this HBR article that explores some of the ways leaders might unknowingly encourage unethical behavior when trying to create a high-performance culture, and how to avoid unintentional incentives.
- Financial targets are not the only company goals. Leaders need to make expectations around values explicit so teams don’t only view financial targets as real and behavior as theoretical.
- Use a scientific approach outside of the lab. In life sciences, we know the value and importance of having a hypothesis and testing it, so treating your business like a hypothesis ensures you adjust it when you get new evidence.
- Don’t do it alone. The CEO role can feel overwhelming at times, but remember that you likely have a team in place that believes in the vision and is ready to help.
If you could benefit from more support, One TEAM can supply it. We’ve helped other clients cross the spectrum between idea and market – while their people thrived – and we can help you too. Book an introductory call.