Not too long ago, I read two books back to back that I think display some fantastic lessons in leadership, Bad Blood by John Carreyrou and Shoe Dog by Phil Knight. Both detail the rise of major companies, Theranos and Nike respectively, and also detail the hurdles and challenges each had to face. However, the leader of each company took very different approaches to problem-solving and ultimately is, what I think, the reason one no longer exists and the other continues to thrive.
In case you need some new reads, try out each of these books. Both are amazing, well written, insightful and quick and easy to read.
Theranos is a company that was founded by Stanford dropout Elizabeth Holmes. She had this grand idea to perform blood tests on a single drop of blood, thus sparing patients from needle sticks. For sick patients needing multiple blood draws, this kind of technology would be a Godsend.
She had numerous family and social contacts that she used to get the word out and raise funding to get her project off the ground. With big names like Henry Kissinger and George Schultz on her board of directors, Elizabeth couldn’t be stopped. Her company was being hailed as a Silicon Valley “unicorn” in that her company was soon valued at over 1 billion dollars…as a startup.
In addition, she formulated partnerships with Walgreens and claimed to have a relationship with the US government for use of her technology for soldiers oversees.
Fast foward to 2018, Theranos is bankrupt.
Phil Knight had a “crazy idea” in his early 20’s to import Japanese made shoes to the United States. As an avid runner, he saw that their products were superior to what was being manufactured and sold by other shoe companies stateside. His memoir details his journey from “crazy idea” to getting his first handshake deal, to finally hiring his first employees and growing his company.
For the first several years, Nike generated negative cashflows. As a result, despite increasing revenues that reached over millions of dollars, there was never any money in the bank. Everything earned was poured back into the company and used to pay off debts. Plus, a couple of law suits, failed celebrity endorsements and manufacturing issues didn’t help.
Fast forward to today and Nike is one of the biggest shoe companies and beloved American brands.
So what went wrong? Well you really should read the book, but to summarize, Elizabeth lied about her technology. Whatever product her company had was faulty. Instead of spending time to fix it she pushed ahead with this “fake it till you make it” mindset. While that may work for most jobs, that mindset will get you nowhere when dealing with patient care.
My biggest question when reading this book, was “how did it get as far as it did”? She kept raising money and formulating these partnerships, despite never delivering on her promises.
The answer is that she’s an excellent saleswoman. I mean excellent. She made people believe her over their own families.
She also ignored anyone who told her “no” and never had anyone with tech or medical know-how on her board. Again obvious glaring issues that I would assume any investor would question, but that’s just how good she was at selling herself and her company.
Her employees were rarely, if ever, allowed to collaborate. She was never open and honest with those even high up in her company. She shunned anyone who disagreed with her or ask questions. There was also a question of ethical business practices.
Despite their cashflow issues and host of manufacturing problems, Nike didn’t just survive, it knocked the competition out of the park. How? I think it’s because no matter what hurdle Phil came up against, he NEVER LIED. He always chose the path of honesty, even when it meant he was making himself look bad.
The result is what you have today. It’s a trustworthy company, led by someone who’s honesty helped him build solid working relationships with his banks, his investors, and his customers.
Some Lessons in Leadership
To summarize for anyone interested in business, interested in building their careers, and succeeding, I jotted down some important lessons in leadership to take away that I think apply to anyone in any field.
It’s not worth it. Any temporary gain you have as a result will quickly dissolve. Plus, you lose all credibility with the people you’re trying to build relationships with. As we all know, success in any field is rarely ever accomplished alone. It takes a team. It takes help. It takes the advice and wisdom of people with more experience than you, and it takes a level of honesty that forces you to always re-evaluate your work and your cause.
Surround Yourself With Experts
Steve Jobs was an idea man, not an engineering or tech man. He surrounded himself with people who knew how to execute what he wanted. If they didn’t know, then he helped them figure it out. The point is that you need an expert in your field to always be there to guide you. Because you won’t know it all.
Theranos hugest glaring mistake was the lack of tech, medical and science experts on her board of directors. The fact that no one called that out makes me shake my head every time I think about it.
Phil Knight, from what I gleaned in the book, never pretended to have all the answers. He listened and he learned from everyone who worked with him. He allowed the experts on his team to do what they were good at.
You have to step in when there’s a problem
Elizabeth Holmes never tried to fix a problem herself. She always sent someone in her place. Often times that someone didn’t know half of what was going on; their only motivation was to make sure that whatever halted the work, would go away so that research and production could continue.
Phil Knight flew around the country regularly to help his stores fix issues, visited factories to help with production problems and took more than one trip to Japan during the early days in order to sort out that relationship whenever it became shaky.
Charisma Will Only Get You So Far
Theranos only got as far as it did because of the charisma and sales talent of its leader. At the end of the day, though, charisma will not protect you from a product that doesn’t work, from money that is lost, or from people demanding answers.
Fear Is Not The Way To Lead
There are multiple accounts of how Elizabeth Holmes used fear and intimidation to control her employees.
This might work in the beginning to make sure people stay in line with what you’re asking, however, it’s not sustainable. Especially when there’s other stuff going on. People, scientists, experts, are all trained to ask questions. We ask when we think something is wrong, something is off, or something needs to be changed. Ultimately, fear doesn’t keep anyone quiet. Ultimately, there will be someone who speaks out and who stands up.
You, Yourself Have to Put in the Work
Phil Knight traveled to market the shoes. He built all these relationships with bankers, investors and endorsers. He spent long hard hours making sure his product met his expectations, and took all feedback seriously. He did the work to make sure his company not only survived, but thrived and grew.
Elizabeth Holmes spent most of her time marketing her idea and generating investments. However, she did very little to help troubleshoot the actual issues in producing her product. Ultimately, that is what led to her demise.
There are many different leadership styles out there. There is no one right way to do it. However, there are qualities that good ones possess that allow for companies to grow and be strong. The story of Phil Knight as compared to that of Elizabeth Holmes may not be the most direct and equal comparison, however, it does highlight the disparities that I think can make all the difference between a successful and unsuccessful company or business.
The lessons in leadership outlined in both books are important to learn. If you’re looking for some insightful reading, definitely check out the books and see what you think!
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