[SystemSafety] Theranos and the Last Honest Man

[Klaus Sievers]

Hi,

thank you very much for the story.

Didn´t know it - and it kind of sets the moral compass straight.

All the best for 2023,

Klaus

(5) Klaus Sievers | LinkedIn
<https://www.linkedin.com/in/klaus-sievers-a0b35759/>

Am 28.12.2022 um 04:34 schrieb Les Chambers:
> Hi all
> I have found the last honest man on the planet Earth.
> Tyler Schultz, the biologist and truth teller who brought down Theranos,
> reducing a multibillion dollar company to zero and sending it’s founder and
> CEO Elizabeth Holmes to jail for 11.25 years.
> Tyler‘s story is of interest to this list as it gives a unique insight into
> the mind of the whistleblower as he navigates the rocky road of doing the
> right thing.
> Ryan Holiday interviews Tyler on his podcast, The Daily Stoic, Episode:
> “Theranos Whistleblower Tyler Shultz on Doing the Right Thing and Overcoming
> Fear.”
> It’s a rattling good tale, highly recommended.
> My summary and take-aways follow:
>
> The Situation
> Elizabeth Holmes claimed that her company had invented a portable blood
> analyser that could perform 300 different blood tests using a tiny speck of
> blood from a finger pinprick. These claims were false, leading to charges that
> Holmes defrauded investors who lost hundreds of
> millions of dollars on a false promise.
> As is common in this class of scenario the fraud was common knowledge inside
> the company. Some Theranos scientists took the easy path and politely
> resigned. Others clothed themselves in St Augustine’s duty of virtue - “Oh
> Lord make me virtuous, but not yet” - and looked the other way. Still more
> made noises and we’re promptly fired. Tyler Schultz, armed with an
> industrial strength moral compass, took them head on. Tyler’s personal
> situation was made even more interesting by …
>
> The Complication
> Tyler Schultz was the paternal grandson of Theranos boardmember George
> Schultz.
> Remember George?
> PhD in industrial economics (MIT)
> Member of Dwight D Eisenhower‘s council of economic advisors
> Dean of University of Chicago Graduate School of Business
> Richard Nixon’s United States Secretary of Labour
> Richard Nixon‘s United States Secretary of the Treasury
> CEO of Bechtel Corporation
> Ronald Reagan‘s United States Secretary of State
> Informal policy advisor to George W Bush
> Safe to say George knew a lot of people. He actively promoted the company
> attracting many big names to the Theranos board. It ultimately included:
> 	•	Henry Kissinger (former United States Secretary of State);
> 	•	Jim Mattis (retired Marine Corps four-star general);
> 	•	Richard Kovacevich (former CEO of Wells Fargo);
> 	•	William Perry (former United States Secretary of Defense); and
> 	•	William Foege (former director of the Centers for Disease
> Control and Prevention).
> All men north of 80 years old who knew nothing of modern biological
> technology.
>
> Tyler’s Problem
> A weaponised nondisclosure agreement. The tool used to threaten noisy truth
> telling employees with prolonged legal action that would mean financial
> oblivion for the righteous and the good.
> The threat of career oblivion. The classic, “you’ll never work again as a
> scientist if you do this.”
> The situation turned nasty. Holmes hired private detectives to follow him.
> Theranos lawyers threatened him. There were attempts to destroy his life. He
> had a falling out with his grandfather.
>
> Tyler’s Solution
> He tried to prove he was wrong to himself … and failed. The claims were
> blatantly and transparently false. This process of internal reflection gave
> him a very strong conviction that he was right. He tried to work internally
> within the company including briefing his own grandfather who refused to
> listen. He tried anonymous tips to New York State regulators using spoofed
> email accounts and burner phones but ultimately realised he would have to go
> public and risk his name to affect real change.
>
> Tyler’s Enablers
> He had less to lose than most.
> He was 23 with the idealism of youth, no children and no mortgage.
> As an American citizen he had no visa problems. Other non-US citizens at the
> company had work visas conditional on them working for Theranos.
> He had no share options.
> He had no compelling desire for a career in science. His love of music meant
> he could just as easily pursue a career as a musician.
> He admits to being arrogant and opinionated.
> He was brought up to do the right thing by his parents.
> His parents had the wherewithal to pay his legal bills. They had to sell their
> house. They discovered they had created a monster. The boy they had raised to
> do the right thing proceeded to take them at their word. To their eternal
> credit they backed him.
>
> The Board’s Problem
> How was Elizabeth Holmes able to snow her own board? These men were hardened
> players with long and successful careers in business, the military, politics
> and the diplomatic service?
> Answer
> Greed. George Schultz’s shareholding in Theranos amounted to hundreds of
> millions of dollars. Even at the age of 96 he wanted to go out as a
> billionaire. Evidence of the corrupting influence of money.
> Ego. George Schultz was certain in his own judgement, he had been right so
> many times before he used that as sole evidence that he was right this time.
> Even when faced with scientific evidence from a Stanford educated scientist
> who happened to be his beloved grandson.
> Love.  According to Tyler the entire board (all men of average age in the 80s)
> was in love with Elizabeth Holmes. The black turtleneck wearing Bamby. They
> vied for her attention. Henry Kissinger wrote her limericks  lovingly offering
> that Steve Jobs was an earlier version of her.
> Ignorance. Beware of boards of directors stacked with “names” who are not
> qualified to perform due diligence on the company they are allegedly employed
> to guide.
> Story. A global factor in all this was Elizabeth Holmes casting as hero in  a
> story everyone wanted to believe. Here is a genius 20 something, a Steve Jobs
> reincarnate on the path to a new Apple. Everyone knew what the hero wanted and
> they wanted her to have it.
>
> Lessons I Learned
> Make sure you are right. Telling the truth will attract attacks from all
> directions so you’d better have verifiable facts at hand. In extremis Tyler
> had a strategy to challenge his accusers to bring their machine into court and
> do 300 blood tests on the judge. If it ever did come to that the test would
> certainly have failed but even with this kind of certainty the case
> dragged on for months and cost a fortune.
> Don’t be intimidated. Powerful people can be incredibly intimidating. Imagine
> standing up to George Schultz.  Yet he was a human being capable of concealing
> massive character flaws. If you cut them they’ll bleed. Truth telling is a
> socially levelling activity. Who cares if you’re interlocutor has advised
> presidents , if he’s lying he’s lying. We are all naked in the face of
> the truth.
> Name the pathology. Name the personality flaw that is feeding the pathological
> behaviour. I once told a project manager, who had just attempted to crash a
> software project, that his strategy was so bad the malfeasance had been
> documented as bad practice in several books. It shook him up.
>
> Stoic Virtues
> Why then are the Stoics interested in Tyler Shultz?
> It’s because, at high personal cost, he actually practised the stoic virtues
> of courage, justice, temperance and wisdom.
>
> Engineering Virtues
> Why then should people on this list be interested in Tyler Schultz.
> Because if you pursue a career in functional safety for long enough and work
> for enough companies, at some point, there is a high probability that you will
> find yourself in a similar position.
> I have.
> My first reaction was shock. How could the  senior management, who I
> previously respected, lie so easily? This is where stoic philosophy,
> originating  circa 300 BCE with the Phoenician merchant Zeno, can be a
> practical assistance to engineers right here right now.
> In his book, The Daily Stoic, Ryan Holliday gives the example of the Zen
> master who has a favourite cup. He had always viewed it as his broken cup
> because he knew that at some point he would inevitably break it. So when the
> day came there was no shock, just a passing thought, as he viewed it in pieces
> on the floor, “but of course”.
> In the same vein one day, sitting in an engineering meeting viewing your
> “broken” senior management commiting blatant malfeasance, your thought should
> be “well here it is“. Followed by an execution of the strategy you have worked
> out well before hand.
> Daily journaling, a strong stoic discipline, can help you with this. Refer the
> meditations of Marcus Aurelius (the last of the five good Roman Emperors 160
> to 180 AD). Marcus journaled for his own purposes, to reflect on his day and
> meditate on his path to being a better person.
>
> Which brings me to my final point. The more I read of the ancient
> philosophers, especially the stoics, the more certain I am that philosophy
> should be at the heart of the engineering curriculum. Let us not continue to
> graduate technical monsters with no moral compass and no idea how to live a
> good life as an engineer.
>
> Cheers
> Les
>
> Epilogue - What Happened to Tyler Schultz?
> After being fired from Theranos Tyler worked at Stanford's Center for Magnetic
> Nanotechnology.
> In 2017 he founded his own biotech company, Flux Biosciences which, according
> to LinkedIn, “utilises magnetic sensing to bring the power of medical grade
> diagnostics into patients’ homes.”
> The word is he reconciled with his grandfather prior to his death in 2021.
> --
>
> Les Chambers
>
> les at chambers.com.au
> _______________________________________________
> The System Safety Mailing List
> systemsafety at TechFak.Uni-Bielefeld.DE
> Manage your subscription:https://lists.techfak.uni-bielefeld.de/mailman/listinfo/systemsafety
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://lists.techfak.uni-bielefeld.de/pipermail/systemsafety/attachments/20221228/d68a356b/attachment.html>