Theranos Leadership behavior

Business Leaders understand that in order to create and run a long-standing organization
with yearly growth, they must make good ethical decisions and build a company culture
around those decisions. However, sometimes like the case with Elizabeth Holmes and her
company Theranos, poor ethical decision making can be the downfall of an organization,
regardless of the good intentions to be a conscious leader. Elizabeth Holmes undoubtedly
had the ability to influence her employees and investors to buy into her vision through the
multiple tactics she employed such as inspirational appeal, exchange, coalition tactics, and
pressure. She influenced stakeholders to join and to buy in through her inspirational appeal by
building enthusiasm by appeal to their emotions and values.

Elizabeth Holmes' leadership style was effective in getting others to buy into her vision for
improving the healthcare field. When she started Theranos she gave all stakeholders a clear
vision and inspired others to buy into that vision, however her decision to not act ethically
ultimately led to the downfall of her Theranos. She embodied some but not all the tenets of
Conscious Capitalism into her company culture, since mutually reinforcing this led to her
company’s downfall. She was able to create more engagement for all stakeholders by inspiring
stakeholders and creating higher purpose. She was able to make stakeholders feel inspired and
feel like she brought out the best in them. At the inception of Theranos it would seem she
embraced stakeholder orientation, but she was never able to create real value for all stakeholders
involved because her technology was not complete, and the value was fabricated. Since she
never had real value in Theranos, she could not harmonize the higher purpose of the business and
fabricated value to the interest of all stakeholders. She could not purposefully cultivate and
sustain a conscious culture due to this; she lacked the trust, authenticity, transparency, and
integrity to connect the other tenets of Conscious Capitalism. This ultimately led to the downfall
of Theranos and Elizabeth Holmes.

Theranos' idea could have lasted over a longer period and would probably still be around if the
leadership had fully embraced Conscious Capitalism from the beginning. If I was in the same
position as Elizabeth Holmes when I started the company I would seek investors to create
technology. Fully developing the technology first enables me a leader to be upfront and
transparent with all the stakeholders involved. Ultimately, it would take a longer time to seek
investment because the technology isn’t fully developed but it does allow me to create different
values for investors with the truth. This avoids the need to use coercive power bases and
pressuring tactics to intimidate employees to hide secrets. This would not create the same value
for all stakeholders in the short term, but over the long term it would still give the company
higher purpose and create real value for all stakeholders.