When fraud is disguised with a strong purpose

Elizabeth Holmes, founder and former CEO of Theranos, has been sentenced to more than 11 years in prison over her role in the blood testing firm that collapsed after its technology was revealed to be largely fraudulent.

A Stanford University drop-out, Elizabeth Holmes had founded a company valued at $10bn for supposedly bringing about a revolution in diagnosing disease. Theranos claimed that with a few drops of blood, its ‘Edison’ test machine could rapidly and accurately perform blood tests that required very small amounts of blood detecting conditions such as cancer and diabetes without the hassle of needles.

According to Forbes magazine, she was "the world's youngest self-made female billionaire" while other business magazines had put Holmes on their covers as the “next Steve Jobs". However, the technological breakthrough that Holmes promoted to investors and the world, was never demonstrated, and their assertions amounted to total deceit.

So, why does it matter to us? It matters because Theranos deceived investors, politicians, business partners, the media, and most important the public pretending to be a purpose-driven company.

The goal of Theranos was to revolutionize health care offering technology that would save lives! It was a people-centric purpose with implementation all over the world that would change everything we knew about detecting diseases at a low cost with safety. Nothing can be more purposeful than this. Unfortunately, it was a great purpose, built on shaky foundations, lies, deceit, threats, and unprecedented misconduct.

Holmes was a great role model in the business community because of her alleged strong belief in a great purpose. Her tweet with this message ‘‘I believe that you can build a business that does well by doing good” is still on Twitter as a vestige of Theranos's "glorious days" to remind us how a powerful purpose can win the hearts and minds of people. Theranos had worked a lot on the promotion of a purpose-driven culture and vision of the organization to all stakeholders. As we can see in their communication back then, one of the key messages in the company’s narrative was about doing good by saving lives, “Theranos is working to facilitate the early detection and prevention of disease, and empower people everywhere to live their best possible lives.”

Holmes founded Theranos in 2003 at the age of 19 and her mission to save people’s lives through technology was very inspiring. Who doesn’t like a young game changer with an idealistic stance and a purpose that offers hope to many people? Despite any potentially initial good intentions, Theranos's strong purpose was used by Holmes as a magic wand to enchant investors and other stakeholders.

Theranos was operating on a foundation of lies that were disguised with a strong and powerful purpose. The Theranos case has given us many lessons about the responsible use of purpose but I would like to highlight the following ones:

• A good purpose becomes a threat when used recklessly or without solid foundations
• Don’t use purpose as a PR trick or a clickbait
• The purpose is all about taking responsibility
• Purpose does good and drives performance when supported by actions
• Being transparent and honest is the foundation of purpose

If you have a story, a best practice, a lesson learned, or even a failure we can learn from about purpose, please do share it in the comments below or send me a message and we will find the best possible way to share it with the community.

The opinions expressed in this article are those of the author, and they do not reflect in any way those of his various affiliations.