Nothing but a Mission
Mission statements are important. They provide organizations with a foundation and direction. When we stray from our mission, we lose focus, which leads to internal and external confusion. But what happens when all you have is a mission? Believe it or not, there are business and companies who feel so passionately about a mission that they think the mission alone will drive their success. While a mission statement can evoke an emotional connection to a business, without a valuable product or service, the mission is just words on a page.
In 2003, a company was founded with a simple yet powerful mission statement: “to make actionable information accessible to everyone at the time it matters most.” Isn’t this what we all want? Sufficient information to allow us to make the best decisions at the exact moment we need it. This mission statement was accompanied by an even more ambitious vision, to use proprietary technology that could run a variety of blood tests with only a finger pinprick and a small amount of blood. Together, the mission and vision promoted a proactive approach to healthcare. In theory, it was a simple solution with far-reaching social benefits.
As with any early start-up, the founder needed funding. In total, she was able to raise $724 million from venture capitalists and private investors by selling the promise of her mission. At one point, this consumer healthcare technology start-up, which was poised to revolutionize the blood-testing industry, was valued at $10 billion dollars.
As the young CEO’s reputation and status began to skyrocket, as she was invited to speak on panels with influential leaders and accomplished CEOs. She was featured on the covers of Fortune and Forbes magazines. She secured valuable partnerships with Capital Blue Cross, Cleveland Clinic, and Walgreens. Meanwhile, the start-up’s chief scientist expressed concerns that the tests were not ready for public use and that the technology was rife with inaccuracies. External scientists were also raising concerns with the start-up’s technology.
A short while later, the Food and Drug Administration began investigating the start-up in response to complaints of major inaccuracies in the testing conducted on patients. The founder continued to court investors and fake the capabilities of the blood testing machine during in-person demos. Despite some early warning signs and skeptical articles, investors continued to buy into the mission and the possibilities, even though they had never seen audited financial statements or received a full explanation of how the technology worked.
A year later, the start-up was still under scrutiny by the Food and Drug Administration while the Centers for Medicare and Medicaid and the Securities and Exchange Commission initiated their own investigations. As a result of their findings, the founder was banned from the lab-testing industry for two years and ultimately shut down lab operations and the wellness centers that had been established through its Walgreens partnership.
Two years later, the founder was charged with fraud. She agreed to give up financial and voting control of the start-up, pay a $500,000 fine, and return 18.9 million shares of stock. She was told that she would not be allowed to serve as a director or officer of a publicly traded company for ten years. However, since the start-up remained a private company, she continued as its Chief Executive Officer and reached out to investors again, requesting more funding.
Finally, on the same day that the Department of Justice announced that a federal grand jury had charged her with nine counts of wire fraud and two counts of conspiracy to commit wire fraud, she stepped down as the Chief Executive Officer for the start-up.
This is the story of Theranos—a company started by a 19-year-old Stanford University drop-out who hated needles and had an ambitious mission, but really only had a mission. Despite her limited life experience and academic background, she was able to convince investors and her Board of Directors, who were not neophytes, to give millions to support her mission. They are all people you have heard of—prominent government officials, media moguls, and reputable venture-capitalists. So how was she able to trick intelligent and discerning people into investing in a product that didn’t actually work?
The answer is three-fold.
1) Exploiting the power of hope. This start-up’s mission gave people hope. It made them believe that an industry which had remained unchanged for years could be done differently. Investors could imagine the immense good that could come of this scientific breakthrough. Diseases could be detected and prevented, chronic illnesses could be treated earlier, the world could be better. They wanted to believe it so much that they didn’t stop to wonder whether they should.
2) Elaborating a story. In the male-dominated business world of start-ups, the young founder felt the need to make personal adjustments so she would be taken seriously. She identified a short list of people who she looked up to and integrated their approaches with this new company. The first was Thomas Edison, the first celebrity businessman. He knew how to tell a good story. He was known as a man who could create anything in his own laboratory. He had his name on over 2,000 patents, but, often, he overpromised and underdelivered. He would fake demonstrations to keep the public and press interested. He would offer stock in his company in hopes that people remain invested. In the background, he would continue scrambling to get his inventions to work. He was considered the first to practice the art of “fake it until you make it.” The founder perfected this practice of storytelling, solidified her celebrity-status, and promoted the “fake it until you make it” philosophy.
3) Emphasizing an image. The CEO’s second hero was Steve Jobs. She adopted his approach to leadership and secrecy, which some have lauded, and others have criticized. She started dressing in black turtlenecks, decorated her office with his aesthetic tastes, and never took vacations. She expected her employees to work every bit as hard as she did. She hired the same marketing firm that Apple used to solidify her public image and brand to the world. She wanted to be taken seriously in a competitive environment by becoming someone else.
An organization’s mission is critically important. But when that mission is not supported by actionable goals or the desire to listen and respond meaningfully to actual data, it obscures what can realistically be achieved. If an inspirational mission does not allow for reasonable deviations because it has been committed to a singular interpretation, the result is an ineffective business that is unable to deliver on its promises. Theranos received exponential funding, press, and widespread support for its possibilities, but instead of fulfilling its powerful mission, it left people disappointed, disillusioned, and physically and emotionally damaged. Now, Theranos’s legacy is a cautionary tale, one we should remember when we re-evaluate our respective missions.
“We are not accountable to numbers. We are accountable to people.” ~ Simon Sinek
