Theranos. A strange world where burglars win…

From 4.5 Billion to nothing …

Forbes admitted: we were wrong: “Our estimate of Holmes’ wealth was based entirely on her 50% stake in Theranos…

Is Elizabeth Holmes a hero or a thief?

Last year, Elizabeth Holmes topped the FORBES list of America’s Richest Self-Made Women with a net worth of $4.5 billion. Today,  FORBES is lowering their estimate of her net worth  to nothing. Theranos had no comment.

 Forbes admitted: we were wrong. Any apologise, no sorry, just: “Our estimate of Holmes’ wealth was based entirely on her 50% stake in Theranos…” then  Theranos shares are not traded on any stock market (now); private investors purchased stakes in 2014 at a price that implied a $9 billion valuation for the company…” then “FORBES spoke to a dozen venture capitalists, analysts and industry experts and concluded that a more realistic value for Theranos is $800 million, rather than $9 billion” then  …It also represents a generous multiple of the company’s sales, which FORBES learned about from a person familiar with Theranos’ finances”.

 Here are three reasons FORBES lowered our estimated value of the blood testing company:

Too much is unknown. Everything but the $9 billion valuation is secret. Theranos said it would replace traditional blood tests, in which a needle is used to extract blood into a vial, with machines that could do dozens of tests on a drop of blood taken from a finger. But it has presented no data proving its systems work.

Theranos has not delivered. Holmes has been promising to publish data for six months, but hadn’t submitted a single paper as of April. She initially presented the Food and Drug Administration’s approval of a single test for herpes virus as proof that her technology worked…

Theranos’ target market may not exist. Theranos, which charges less per test, would need to dramatically improve margins on its tests, as well as get many more people to take its blood tests. 

What world we are living in, where a 19 years old girl can fund a corporation, get millions from professional investors and before turn 32, get valued billions without a proper control on what she is really doing?

We can’t say here if she is guilty of fraud or what really happened there, we can only see how the world of finance has skyrocketed Holmes as an entrepreneurial hero without control. Now that controls are in place it seems that it was a fake. Yes, a whole fake, not only something missing or some mistakes, the technology that would have overcome the classical blood test method it seems that simply hasn’t been developed yet, probably is not possible and if also it could be, the business model won’t work. Does it look like another “Enron”? Is she another Jeffrey Skilling? Clearly it seems that America is the country of freedom that really allows pirates entrepreneurs gathering billions from private citizen like Michael Douglas as Gordon Gekko in Wall Street (1987) or Leonardo di Caprio as Jordan Belfort in The Wolf of Wall Street (2014).

Maybe people need to believe in someone good and successful to which rely and simply invest their money with no hassle. Elizabeth Holmes was perfect: a young pretty girl from a wealth family, no degree but a bright idea (no matter if that idea can really work), strong and brave and a very good communicator. 

The American Dream: be smart, get success and become rich. Meanwhile this dream glimmers for people, is not clear how it attracts also professional investors! How can it be that professional investors put their money into an enterprise without having enough control? $724 millions is not a tiny amount, and that investment has boosted the company to rise $9 billions of “value” on the stock market, gathering money form non aware citizens that rely on the finance world, the same financial world that has already created the “.com” bubble once at the end of 20th century and then the “real estate” bubble up to the 2008. That “financial industry” that now owns Preferred Shares of Theranos Inc.: if something is wrong venture capitalists won’t lose their money.

There are millions of young people out there that are attracted by the dream of developing their own business, many of them are honest and good guys and girls that simply rely on the opportunity to create their future. For the most of them it is pretty hard to find the money to support their ideas. What really helps, in getting investment into someone’s business today, is the ability to communicate and be persuasive more than anything else. The more you are able to persuade people, the more investors you will convince, the more money you will get. And persuasion, as Robert Cialdini taught us, is not based on real facts, the art of persuasion relies on the communicative ability not on the real elements that make you right. 

Venture capitalists seem have the Saint Graal of the knowledge about business, they seem judge properly ideas and business ventures in order to be safe about their investments. Now, if the charge to Elisabeth will be confirmed, the situation seems slightly dark: the venture capitalists didn’t know about the fraud? If so, the only reason could be that they are incompetents and the system doesn’t work - but we were already aware of it having watched those movies -. On the other hand if the venture capitalists were well aware about the big fraud, it means that they have got the advantage of keeping safe their investment and those money boosted Theranos’ shares value up to $9 billions.

Among all those millions of young who are building their future by developing honest businesses, there are some of them which are only focused on make money, no matter how. And, it seems, there is a system that make profits on them. No matter what they do. Is this the American Dream? Just make money not matter how?

Probably the bad and the good are hard to share properly: no system is perfect and there are around the world even worst systems in managing economies and citizen freedom, but we could learn by the failure of the american system and create a better environment in which freedom doesn’t go without control. Like an old Italian motto says: “Trust with no control is faith, and I don’t believe either in God.” Maybe Americans are too religious… 

Unfortunately America is going to vote for president nowadays and Donald Trump seems having possibilities to win, and this month United Kingdom is going to vote for leaving Europe: the Brexit. If those two results will be achieved probably we will see a dark time furthermore. Rumours say that Donald Trump is a shark in making money - do you believed he was a priest?- What values he will bring into politics and social issues it’s something that nobody knows, but some can already figured it out.

And what will be about the UK economy if this country won’t belong to Europe anymore? Who will buy property in London to sustain building industry and property value that made British so rich? How the financial market will work outside Europe?

Then yes, we should be able to invest supporting new ideas and rewarding innovators for their contribution to improve our lives, but our societies can’t allow any shortcut to become rich. More, be rich wouldn’t be the target of the life, have a life rich of love, emotions and happiness can be the life’s goal. That’s the change we have to nurture into people minds.

Drive!

By driving you may reach your destination. But, how you proceed makes the difference!

When you drive a car or you lead an organisation you have to take hundreds of choices. The quality of each choice creates the quality of the journey and, at last, the quality of the lead.

I was travelling with a friend some days ago, he has driven thousands of miles in his life; he has had many experiences travelling for his job and, like many people, he is convinced of his driving ability. But, not  positioning his hands correctly on the steering-wheel to turn it caused him a bad feeling on car governor and he braked suddenly while turn so that the car behind us honked his horn loudly. It showed clearly he is not a good driver after all...

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Get the whole article here: Drive!

 

Trust

We know what we trust and we trust in what we know.

Could we turn into confidence about how life will be? 

It’s quite easy to trust in what we have learnt: how did Tiger Woods become confident in ball flight if not through learning it step by step? How do we become worthy in best practices if not by placing focus on learning? Learning means understanding how things work, practice, repeat, make experience.

But life is always a premiere rarely you can say: “Sorry, repeat please, the next one will come better….”.  Oh yes, we learn how to manage our life, and step by step we learn how to run decision making even if we could never keep all variables under control...

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Have the rules been made to be broken?

Did you ever break a rule?
I do that (quite often) and for what I know, lots of successful people also do that.  Are we all bad people?

Being able to avoid troubles and reach the goal is an essential skill of the life know-how: the ability to visualise possible scenarios and make the right moves, one after another. In a business environment we can’t control all variables, and above that there are several rules to attend to. How can we be effective in achieving goals in a highly competitive, troubled environment?

Continue reading "Have the rules been made to be broken?"

The Future

 (with Kiran Kandade)

I was talking with a colleague who mentioned about a possible upcoming change initiative for a small town and we were exchanging ideas. The background of the town is not unlike that which many other towns and communities all over the world are facing. Weak economy, conflicts between various factions, and limited (if any) discussions on the visions and possibilities for the future. As jobs keep vanishing, the younger people are fleeing, leaving behind an ageing population facing extreme economic inequality. On the positive side, there is a lot of natural beauty in the form of a lake and a river that runs through the town, a rich heritage and history as well as a sense of belonging and community among those still there. The project will support people’s mind change by giving them tools for shifting their beliefs. And one analogy has popped up in our minds:

Kiran, I’d like to remind you a short story...

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Why analysis is not enough

Why Analysis Is Not Enough And Passion Is So Important 

A Story From Henry Mintzberg by  Karl Moore (Mc Gill University)

In the Analytic module of our International Masters  In Practicing Management and our Advanced Leadership Program for executives, my colleague Henry Mintzberg likes to use this story to show how analysis can get in the way of really understanding an organization and its purpose.

“A young, enthusiastic MBA was finally given the opportunity to apply his learning. He was asked to carry out a survey of a group with which he was not normally familiar and submit recommendations as to how its efficiency could be increased. He selected as his target a symphony orchestra. Having read up on the tools of the trade, he attended his first concert and submitted the following analysis:

  1. For considerable periods, the four oboe players had nothing to do. The number of oboes should therefore be reduced, and the work spread more evenly over the whole concert program, thus eliminating the peaks and valleys of activity.
  1. All twenty violins were playing identical notes. This would seem to be an unnecessary duplication, so the staff of this section should be cut drastically.
  1. Obsolescence of equipment is another matter warranting further investigation. The program noted that the leading violinist’s instrument was several hundred years old. Now, if normal depreciation schedules had been applied, the value of this instrument would have been reduced to zero and the purchase of more modern equipment recommended long ago.
  1. Much effort was absorbed in the playing of demisemiquavers, which seems to be an unnecessary refinement. It is recommended that all notes be rounded up to the nearest semiquaver. If this were done, it would be possible to use trainees and lower-grade operatives more extensively.
  1. In many cases, the operators were using one hand to hold their instruments. The introduction of a fixture would free that hand for other work. Also, it was noted that excessive effort being used by the players of wind instruments whereas, one compressor could supply enough air for all the instruments – and under more accurately controlled conditions.
  1. Finally, there seemed to be too much repetition of some of the musical passages. Therefore, scores should be pruned to a considerable extent. No useful purpose is served by repeating on the horns something which has already been handled by the strings. It is estimated that, if all redundant passages were eliminated, the whole concert time of two hours could be reduced to twenty minutes and there would be no need for an intermission.”

(Published more or less as above in the mid 1950s in an American professor’s bulletin, a Canadian military journal, and Harper’s Magazine, based on an anonymous memorandum circulating in London and probably published originally in Her Majesty’s Treasury of the Courts). Thanks to Phil LeNir of Coachingourselves for reminding me that my colleague Henry Mintzberg often uses this in executive classes.

Karl Moore

I Asked Prof. Karl Moore to allow me to publish that amazing story on my website, I think there are great means in that short story, first is a mean which involve Leadership, then there is one which involve the System Thinking, finally there is the main one about the disconnection between the output evaluation and an Economics approach in which both, Henry Mintzberg and Karl Moore set correctly their focus. 

Do someone think that’s only a joke?  

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Arguing with a colleague

Positive approaches couldn’t be the same, but positive confrontation opens more opportunities to create new meaning, for both counterpart.

Kiran Kandade is an International Organisation Development Consultant based in Singapore. Her approach is deeply based on the improvement of Appreciative Inquiry to create organisational changes. Kiran is an appreciated colleague and a good friend. Recently we “argued” about life lessons: do they come to us just by successes or even by failures?

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Liquid Modernity?

Zygmunt Bauman's theory applied to organisational thinking.

Competition through innovation is realised by a sudden impact followed by an immediate obsolescence. Innovation as a continuous driver for improvement, implies a fast changing organisation not only in terms of products and services but also regard to ideas and culture. New ideas serve to overtake old, obsolete knowledge. We are always looking for new better knowledge so we can throw away the old one...

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Focused Leader

Concentration, please!

The ability to concentrate, to focus one’s attention, has always been considered a key competence for executives. But what concentration are we talking about? How do we tell if something is worthy to make us focus or concentrate on it?

The Focused Leader, as the Harvard Business Review publishes this month, in an article by Daniel Goleman, raises the ideas of focusing and executives’ behaviors related to the concentration on their tasks...

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About Bossy …

Leader’s behaviours which affect effectiveness.

How do we manage our own personal skills to become more effective in the crucial theme in this era, the Leadership?

Here not casual tips, not true for free, just some idea which come from experience and study, because to talk about leadership require we have acted good bossy.

The content's items:

Personal Integrity and Credibility
Adapt you style at the New Economy environment.
Be able to give “Improving Feedback” to all around you
Focus your organisation outward
Criticise with care
Set a To-Do List that works
What people want from you!
Build better environment asking questions
Managing team conflicts
Exceed Clients’ Expectations
Creative leader is who:
Create your market on the rock
Improve Your Team’s Performance 
Asking better questions!
Focus on your core business
Important Vs Urgent 
Recover From Your Mistakes 

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How to dismantle the sales machine

Is your sales management still leading by structured procedure? Does it work or are you experiencing business nightmares?

Most of us have set sales as a structured process in order to be more efficient, particularly when managing a wide number of sales reps or to get under control and make  predictable the most unpredictable stage of the business. All of us have set KPI criteria and metrics to foresee ahead and make our forecasts more reliable.

As Zygmunt Bauman has correctly pointed out, we are living in a “Liquid Modernity” and it affects many of our habits. We need to shift many process and structured procedures to create a new approach in a changed era.

Brent Adamson, Matthew Dixon and Nicholas Toman figured out very well on Harvard Business Review (Nov. 2013) the real meaning of overpassing the sales process to embrace flexibility, judgment and focusing on results which are the main skills who works todays in sales...

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