When Visionary Leadership Crosses The Line
Earlier this month, a California jury found Elizabeth Holmes guilty of 4 out of 11 counts of fraud and conspiracy to defraud investors.
And I can't shut up about it.
For the past 3+ years, I've taken in everything I can related to the case:
Journalist John Carreyrou's book and podcast of the same name, Bad Blood
The Drop Out podcast
The HBO Documentary, The Inventor: Out for Blood in Silicon Valley
and countless articles from media outlets following her trial.
Elizabeth Holmes was the founder and CEO of a healthcare/tech company called Theranos, which revolutionized bloodwork by replacing the intravenous blood draw with a simple finger prick—with just a few drops of blood, they could run the same tests that formerly required vials upon vials.
Or could they? It turns out that while she painted an elaborate picture for the potential of this technology, that's all it was—potential—even when Theranos rolled it out with real patients in Walgreens pharmacies. The technology simply didn't work. It returned faulty results that affected real people's lives.
Several employees within the company raised concerns about the integrity of the technology, but they were silenced and sometimes intimidated into staying in line. Meanwhile, Holmes pressed on with her vision, creating new partnerships and securing more investor funding based on false claims. When the truth finally came to light, these investors lost everything.
I was glued to the trial, googling "Elizabeth Holmes" several times a day while the jury deliberated. When the verdict finally came, it was all I could talk about.
On a FaceTime call with my Dad that night, he asked me point blank: "What is it that makes you care so much about this?"
It's a fair question. I don't think I've ever before been so wrapped up in a story that has absolutely nothing to do with me. So what is it about Elizabeth Holmes that has me transfixed?
She led me down a rabbit hole of similar visionary leaders who painted an exciting picture of making a meaningful difference in the world and inspired employees, investors, and customers to be a part of it—like Adam Neumann of WeWork and the more nefarious Keith Reniere of NXIVM.
I remember watching Elizabeth Holmes as she was interviewed by Oprah in 2015 or 2016. This was before Theranos' fraud was exposed by the Wall Street Journal—it was in the days when she was on the cover of several notable news publications, touted as the youngest female self-made billionaire and a genius inventor about to change the world.
And there she was, a young female leader of my same age with an innovative idea that would have a transformative impact. I was inspired!
As she fell from grace and more and more layers of the disfunction, deception, and damage of Theranos were exposed, I asked myself a lot of questions about Holmes' leadership and where it went wrong.
I think there is an important lesson to be learned about visionary leadership here.
Visionary leaders invite us into a picture of possibility—what the future could be if we work together to make it real. Visionary leadership is literally about something that doesn't yet exist. It's essential to any cause worth fighting for—a sense of what we're moving towards that is inspirational and motivating.
So where is the line between welcoming others into a vision for the future and outright fraud?
Earlier this week, I posted about Dr. Martin Luther King Jr. as an example of visionary leadership.
I shared a simple but powerful model called Creative Tension, which was formed by Peter Senge, a professor of organizational learning at MIT's Sloan School of Management:
Picture a rubber band stretched between your two hands: on one side is the vision of what could be, and on the other side is the current reality.
Effective leaders stretch us between both.
Dr. Martin Luther King Jr. was a leader with a dream; he invited us all into an vision of what our country and communities could be like if we embraced equity and freedom—but he also made inequity and injustice visible, helping us see the truth about our current reality.
Making the gap between the two visible—both by stretching our vision of what could be and by taking an honest look at the current reality—generates creative energy for enacting change.
In contrast, Elizabeth Holmes' leadership focused solely on the vision of what could be. She ignored the true reality of what was happening inside the company, thus breaking trust with and causing harm to employees, customers, and investors alike.
Leaders without a vision are so mired in the current challenges that they fail to give us the hope of a common goal to work towards. They leave us frustrated and uninspired.
Here's the thing: I don't think that Elizabeth Holmes was out to trick people and steal their money.
A technology company is, after all, all about creating something that wasn't there before.
I think that she believed in her vision deeply. With every naysayer, she told herself that if they could just break through, the technology would catch up with the vision.
What she didn’t do was balance her vision of what could be with an honest look at the current reality.
It’s a cautionary tale for any leader.
If your organization aspires to make the world equitable, yet your employees feel the weight of inequity within your own culture and internal processes, it would serve you well to take an honest look at addressing those internal structures. You can't lead a team into the future without stretching the rubber band—only then will you inspire the energy to create meaningful change.
Holmes faces a sentence of up to 20 years. Her fate will be decided in September.
Look: there's so much more I could talk about here:
--> The question of whether countless white men have pulled the same kind of deceit in the tech industry, but she's being held to a higher standard as a woman.
--> The question of growth and scale. For both Holmes and Adam Neumann of WeWork, there was enormous pressure (internal & external) to grow as quickly and exponentially as possible. When this kind of rapid growth happens, it's almost impossible to scale a company in a thoughtful and humane way.
For now, let’s just say that I'm happy to talk about it with any other Theranos geeks out there—and very much looking forward to seeing Amanda Seyfried play Holmes in Hulu's original series, The Dropout (premieres March 3) and Jennifer Lawrence take the lead in the feature film, Bad Blood directed by Adam McKay.
In the meantime, I'm always open to recommendations of other stories of visionary unicorn leaders to follow.
