Contact

+49 (0) 171 3888898
wolfgang@wolfgang-kroj.de

Search Menu

Mercy for Elizabeth Holmes?

Two weeks ago, the news hit the press that Elizabeth Holmes, founder and CEO of Theranos, was found guilty on four conspiracy and fraud charges for swindling her investors and is facing up to 20 years in prison.

Elizabeth Holmes, a Stanford drop out, founded the Biotech company in 2003 at the age of 19 with the ambition to revolutionize blood testing by providing the capability to run hundreds of tests on only a pinprick of blood. This would eliminate the need to stick a needle into someone’s body and collect bottles of blood making it an easier, quicker, and cheaper process that could be performed virtually anywhere without the need to see a doctor.

That was exactly the stuff that dreams are made of in Silicon Valley. She was hyped as the next Steve Jobs and eventually became the youngest self-made billionaire with Theranos getting to a peak evaluation of $9bn. Walgreens, Rupert Murdoch, Larry Ellison, and others had invested heavily into the company. Henry Kissinger was on the board of directors as well as William Foege, former director of the Center for Disease Control and Prevention (CDC). 

How cool was that combination? With Walgreens, a giant distribution channel was already on board. The CDC would give the product instant credibility and help to establish it as a worldwide standard for blood testing. Henry Kissinger’s network was invaluable, and the Murdoch empire would spread the story through all their media channels globally. What a perfect setup it was!

In 2015 an investigative journalist from the Wall Street Journal revealed that fake demonstrations had been done to investors and the tests proved to be massively inaccurate. Secretly other tests using traditional blood drawing methods and outside labs were performed instead. Also, Elizabeth Holmes tried to use her contact to Rupert Murdoch to suppress the article, but the Wall Street Journal published it anyway. It eventually led to the collapse of the company in 2018.

The public verdict seems to be unanimously that this is a clear case of fraud and Elizabeth Holmes is the guilty one. Having worked with Silicon Valley companies for almost 40 years I asked myself if she wasn’t rather the victim of “The System” of Silicon Valley. In a sense it reminded me of the ballad “The Sourceres Apprentice” from the German Poet Johann Wolfgang von Goethe where the talented apprentice out of curiosity unleashes a process that becomes uncontrollable and seemingly ends in chaos. Luckily in the end the master steps in to resolve the situation. Unfortunately, in the case of Elizabeth Holmes there was no master, there were apparently no controls. Of course, Silicon Valley hard core advocates will argue that it is exactly the unlimited belief in and commitment to innovation that makes extraordinary success happen. 

The belief of Silicon Valley is that if you match young talented entrepreneurs and scientists with venture capitalist anything is possible. I am not going to argue against that, but I think the Theranos case has shown that this alone is not a recipe for success. If you have a dream about something that has the potential of revolutionizing an industry, in the very beginning there is no assurance whatsoever that you’ll be successful. Yet, in order to attract investors, you have to give them the impression that the probability for success is reasonable. “Fake it until you make it” is a principle that comes to mind. The creative process needs to manage beliefs, uncertainties, failures, emotions, showstoppers and so forth and I am sure that there have been many attempts to distill “the ultimate success formula” which will guarantee success in a reproduceable fashion. 

I assume we all agree that the CEO of a startup needs to perform the fine art of managing expectations while keeping in touch with reality and considering possibilities. Obviously, Elizabeth Holmes failed miserably on that task. You need to at least give your investors and the market a positive impression of the truth (aka “the glass is half full”) because otherwise they get cold feed, lose confidence, the stock takes a hit, your funding gets impacted and you might be forced to balance the books by bloodshed (aka layoffs) which can take you into a downward spiral you might not recover from. So, it is all about controlling the hype while still enjoying the ride. 

In my opinion the dilemma starts with a lie. It is so tempting to use it in order to prevent “the system” from crashing but it also gets you a potentially fundamental crossroad. From now on your future story needs to be consistent with the essence of the lie and that may bring you totally out of sync with reality. The pressure to stay consistent with your lie becomes unmanageable and at that point there is no way to reset to the truth. It is time for the big bang.

As a CEO you need to ask yourself the question: how do I find out what’s really going on? Is telling the truth supported and encouraged by the company culture that has been developed or do my people tell me what they think I want to hear? In most cases I am likely to get different opinions. Who do I listen to? The people I like, the best storytellers? Do I actually want to hear the truth, can I resist the urge to take the drug of illusion? Those are choices you have to make almost on a daily basis. 

In my 40+ years working for Silicon Valley companies I have seen various “fake it until you make it situations” none of which ended in a big bang though. The hype cooled down and the project was discretely buried and that even worked when billion-dollar investments had been involved. I think the tragedy of Theranos was also rooted in the fact that it was a one product company, so all the eggs were in just one basket and there was hardly a way to mitigate the risk. 

Let’s ask ourselves the question: what would I have done as the CEO of Theranos? Before we do that, we should remind ourselves that this exercise is somewhat unfair as we are judging the CEO while we already know the full outcome. In a sense we have to make judgements in the context that existed at the time. 

For me the analogy of the “Boiling Frog” apologue comes to mind. The premise is that if a frog is put suddenly into boiling water, it will jump out, but if the frog is put in tepid water which is then brought to a boil slowly, it will not perceive the danger and will be cooked to death. The story is often used as a metaphor for the inability or unwillingness of people to react to or be aware of sinister threats that arise gradually rather than suddenly. In the Theranos case the heat was raising maybe half a degree a month.

One of the prime duties of a CEO is to put in place the controls necessary to get a clear picture of what is going on while managing the communication with the stakeholders and the outside world. Yes, you need to also take risks in order to get the high rewards, but you need to put a red line out there to keep it to a manageable level. Now what do you do when you reach that red line? Buy more time? Bite the bullet and tell the complete truth or let it out piece by piece? Ask the board of directors for help? Look for a partnership to get access to alternative/complementary technology? Limit the playing field to a “safe” space where the technology works? As a last resort you could decide to take refuge under the wings of a health care giant as long as you still have assets of interest. Probably many of these thoughts went through Elizabeth Holmes’ mind at some point in time, but no visible action was taken. Inaction proved to be the path of death in this case.

Finally, the investors have taken her to the cleaners and are looking for revenge. How about their duties? Did they understand the risk they were taking? Did they get an independent view of outside experts in this field? Did they draw a red line? Did they offer/provide help? Or were they just dazzled by their own greed? Interestingly enough, the board of directors never gets sued for not taking action.

In summary, the system of Silicon Valley is not the world formula for guaranteed success and despite of what is being said, it does not really tolerate failure. It is the joint responsibility of the managers in play on both sides to create a culture of openness, transparency, support and proactiveness that allows “stuff” to bubble up and be dealt with before the only viable sentence becomes the death penalty.

My new primary question

We talked about the Primary Question and the influence it can have on our lives in this blog before. The primary question is like an immediate unconscious reaction to things happening in your environment. Some questions are serving us and help us feel presence, love and gratitude, others remind us about our fear that we might not be enough and therefore not be lovable. Even a question which might look very innocent from the outside like “How can I make this better?“ could drive a person into a vicious cycle of desperately looking for “the perfect solution“ which in most cases does not exist.

The good news is that by using NLP we can change an unwanted primary question to one which suits us better, so we do not have to suffer.  We actually can change it any time we want. That relieves a lot of pressure about making “the right choice“ and allows us to try things out. My previous primary question was “How can I enjoy this moment even more?“. What I liked about it was the fact that it presupposed that I was focused on the here and now and that I was enjoying the moment already. It did not put me under any pressure to take action – just feel and enjoy. Of course, that were moments which were not enjoyable by definition and then the question invited me to take a different perspective. 

In business situations where sometimes politics come into play, this question nevertheless put me from time to time into a confused state. A bit more than a week ago I reflected on this and found my new primary question:

“What is the gift in this moment?“

Here is what I like about my new primary question: it presupposes that there is a gift in any moment and as we all know, problems are gifts that make us grow when we solve them. The word “gift“ puts me into a state of positive anticipation – almost like at Christmas and most importantly, it makes me refrain from retaliation which used to be my default reaction when I rated something as an attack. The positive effect now is that my response is a lot better thought out and in many cases it prevents me from getting into an argument with others. I’m excited about how this primary question will support me in the future.

Five Steps to a Magnificent Life

In one of his recent seminars the famous life coach Tony Robbins was asked if there was a recipe to set oneself up for a magnificent life. Here is what he recommended:

FEED AND CONDITION YOUR MIND

Your mindset determines the quality of your life. What are your beliefs, what are you focused on, what are your rules? If you change them, you can see dramatic shifts in your experience. What if you decided to focus on what’s right instead of what might be wrong, on the positive instead of the negative, on finding a solution instead of complaining. These days news and social medial have a huge impact on how you feel, but you have the choice to tune into channels that support and fuel your positive ambitions. Rituals and repetition will help you condition it. Surround yourself with people who support your growth, who encourage you to keep on trying instead of giving up because you are not good enough.

STRENGTHEN YOUR BODY

When I ask young people: “What’s important to you in life?“, very seldom health comes up as a priority. This changes instantly when we get sick, and the highest priority is to recover. Taking care of our body is the basis for living a long life with vital energy. It starts with what you eat and how much you eat. Learn about which food is good for you and what just poisons your body. How do you deal with junk food, sugar, coffee, and alcohol? That does not mean though that you have to live a life of scarcity and prohibition. It is about creating a mindset that highly values health and vitality. Sports help you build muscles and stay in shape.

GET A ROLE MODEL

When you want to learn or achieve something in life, it makes sense to find someone who has mastered the skill or achieved what you are looking for. If you ask them coming from a position of humility they are most likely willing to share how they did it. Most of them will actually be happy to share since they are proud of their achievement. Write down as much as you can capture. If your role model is a celebrity and seems hard/impossible to reach, spend some time on Google to find out about their story. 

PROXIMITY IS POWER

You become the average of the people that you surround yourself with. Weak people surround themselves with those who have less energy, less ambition and are less successful so they can shine. Instead surround yourself with people who have reached what you want, who have the connections that you need, who play life at a higher level than you do at this point in time. Learn from them, solicit their support, and have them hold you accountable to executing on your plan. This will challenge you, and lift you to a higher level. Find a peer group that lives co-elevation as Keith Ferrazzi calls it. 

GIVE MORE THAN YOU EXPECT TO RECEIVE

When I was young, I thought that I was entitled to everything I had. Later in my life I experienced the magic of gratefulness and that became the primary driver for me to give back to society. “Give, and it shall be given to you“, Luke says in the bible. It seems to be a fundamental law of the universe to reward those who give more than they expect to receive.

The story behind “The Wolf of Berlin“

Sometimes I get the question: Why do you call yourself “The Wolf of Berlin“? Quite frankly, when I was looking for a branding, The Wolf of Berlin was the natural one for me to pick. I selected it without a lot of thinking. My first name is Wolfgang and I live in Berlin, the capital of Germany – that’s it. When I talked about that branding with my marketing advisor, he raised some very serious concerns. Wolves are dangerous animals, and most people are afraid of them. Why in the world would someone want to be coached by a wolf? My first reaction was: he is absolutely right.

Then I thought about it some more and of course I googled the wolf and found that in shamanism there is the notion of a “power animal“. A power animal is, like an angel, a creature of light without a physical body and its mission is to protect a human being and become his soulmate. So, let’s look at the wolf as a power animal. The wolf makes ancient wisdom available to us. He stands for leadership and strength. At the same time, he stands for the wild, the uncontrollable, and there is as well something mystical about the wolf. I guess everyone who saw the movie “The Wolf of Wallstreet“ was inspired by Leonardo Di Caprio’s performance as a brilliant story teller and sales guy who looked at business as a game and ruthlessly played it to the extreme.

A wolf has some amazing capabilities and is a very social animal. He lives in packs where they jointly go after fat prey. At times the wolf leaves the pack in order to go after a new experience. A wolf can smell a human being over a distance of up to 2.5 km and can walk up to 40 km in a day. He is very faithful in his relationships. The myth that the wolf is howling at the moon was actually created by Hollywood movies. Howling is the way wolves communicate over distances of up to 10 km and protect their turf. In order to maximize their outreach they put their heads back. Since they are mostly active during dusk and the night, the moon is their steady companion. But the wolf is by no means howling at the moon.

If you get inspired by the wolf as your power animal, you can enjoy personal freedom, the shelter of the pack and grow your leadership skills and self-confidence. When the wolf looks at you with his impenetrable gaze, he is asking you to listen to your soul’s calling and that is what coaching is all about!

Coaching is not about giving advice. It is about helping the client to find “their solution”.

As a coach you often meet clients who are totally frustrated claiming: “I have tried everything but nothing worked to solve my problem“. Of course you have seen a lot of similar cases and you are tempted to make suggestions. You might simply care about this person and hate to see him/her in disarray or pain. Giving advice is nevertheless a bad idea – why? 

You usually do not know the person well enough, you have not lived their life, you did not have the experiences they had. Also chances are very high that in a highly emotional state people can not appreciate what ever you propose. Often they are obsessed about their “problem“ being so special, so hard that it can’t have an easy solution that any outsider could come up with. Some take significance from the fact that they have this huge “unsolvable problem“. Most of them will argue with you about any suggestion. Specifically perfectionists that are looking for the ultimate solution will immediately shoot any suggestion down because it is not perfect. 

The first task then is to interrupt their pattern of helplessness and bring them to a resourceful state. Usually it is not the lack of resources that troubles them but rather the lack of resourcefulness. When the pattern is interrupted, we can make them remember a time when they felt powerful, resourceful, unstoppable and recreate that state. From that state then new resources come within reach and creativity gets unleashed. We can then coach the clients to create a solution that is a great fit for them which they can fully embrace because they created it. It is not uncommon that this solution now looks quite different and much more impactful than what the coach had in mind at the beginning.

The journey from the brain to the heart

I was educated as a mathematician and worked in IT for my entire business life. I grew up in a binary world driven by logic and algorithms. No wonder that I thought that what made me a human being was my brain and that everything else was just a vehicle to help me navigate and keep me alive and functioning. My heart for instance was a blood pump, nothing else. To brain-dominated people like I was then, emotions were a strange thing, a sign of weakness almost. Emotions distracted me from the chosen logical path. Emotions were something I had little control over. I even felt ashamed of some of my feelings and tried to hide them which in turn made me look „cold“ and hard to approach by others.

When I started my journey of self-development, I discovered that the main function of our brain is to keep us out of trouble and make us stay alive. This was a great support function to have, but should it take control of my entire life? The brain was always looking for what could go wrong and trying to protect me from the consequences. Likewise, much of my education was driven by the urge to „find the error“. I realized that perfectionism had shut off my ability to truly enjoy the beauty of this world.

The new task for me was to take control of my thoughts through NLP techniques. I came to appreciate emotions as something that brings us into motion. Emotions make us remember important moments in our lives. It is not just an achievement or the outcome but the emotions we felt when it occurred.

It is mostly the brain that creates negative thoughts which trigger negative emotions for us. On the other hand, feeling love is not the result of a cognitive process. You simply cannot make yourself love someone. Besides serving as a blood pump, the heart is the place where all the answers are as it also serves as a point of connection to the universe, our creator and it creates a sense of belonging. It is our true emotional home. The brain is part of the ego that created the separation necessary for us to have an individual experience. It was an amazing journey for me from the brain to the heart and it helped me to realize who I really am and what fulfills me. 

Real power is the power to say yes!

During my career of 40+ years I kept wondering what having real power actually means. In hierarchical organizations power seems to be associated to your position on the org chart. The higher up you are, the more power you are supposed to have. I have seen managers who took pride in the fact that getting their approval for a certain project was really hard. They created an aura of being a „tough guy“. That was part of their identity and it created fears when employees needed their consent. Having the power to say no was seen as strong and impactful and they enjoyed using that power frequently. Don’t get me wrong, sending a proposal back with comments and asking for it to be revised can be a very useful process which usually results in an even better offering. We should always be conscious of the fact that our job as leaders is to support the creativity of our teams. I have seen too much self-censoring where people had great ideas but did not follow through because they were „convinced“ that they would never be approved.

In the end, a real decision maker needs to have some „ink in the pen“, the ability to sign off, the ability to assign a budget and resources to a project. Often, we immediately think of the risks that might be associated when we approve something, but there is also risk when we reject something. It might take time until we realize that risk. When a proposal is approved, the team that created it feels empowered and rewarded. Positive decisions are a great way to increase the mood of an organization. Let’s use it!

What was your last approval you gave and how did you feel when you made it?

You can’t really change another person. If you want change, change your own behavior!

The idea that we can actually change another person is one of the biggest misunderstandings in any relationship. It is driven by our expectation that a person has to behave in a certain way. In most cases we do not like the effect that the current behavior has on us. If that behavior is totally different from how we would behave under similar circumstances, it is hard for us to understand how “a sensible human being” could be so terribly off. We try everything from persuasion to brute force to try to get the change and we get frustrated or upset if that does not happen. The source of this though is the expectation that we have and the meaning we assign to that behavior. I have seen business as well as private relationships that end up in open warfare over expectations that are not being met and both parties are willing to hang on to them even at the cost of sacrificing the relationship altogether.

We normally do not have control over another person’s behavior, but we have control over our own behavior. My recommendation in such a situation is to make a change for yourself and watch what happens. There is a saying attributed to Einstein which relates to this situation: “The definition of insanity is doing the same thing again and again and expecting a different result”. One of the principles of NLP is that in case your current approach does not deliver the desired result, change it and see if the outcome is different!

You don’t really know something until you have practiced it!

A some time ago someone asked me: if you look back a couple of years, which insights do you wish you would have had then as business leader and a coach? This post is the first one in a series where I am sharing some examples.

When I was young, the entire educational system in Germany was geared towards accumulating knowledge without having any idea if it would be relevant to you at any time in the future. There was little focus on the wider applicability of what was taught and therefore no “real life” practice took place. Needless to say, most of what you were supposed to have learned got lost on the way and in retrospect it looks like valuable time was lost. It is the practice and the outcomes that create references that we will memorize. It is the emotions that we feel when we practice that make us assign a meaning. 

What conclusions can we draw from this? 

Whenever you sign up for a course for example, check the references of the person who is teaching the course to make sure he or she is practicing what they are preaching, and it is not a theoretical exercise. I work as a business and leadership coach and just accepted a position as interim manager at an international IT company for the next 9 months. I am very grateful for this opportunity to practice.

Similarly, when you are making changes in your life, some of your friends will offer their advice. Unless they have mastered a situation which is similar to your’s, I would not listen to them, specifically not if their feedback is negative. Don’t allow others to destroy your dreams out of jealousy!

I am also wondering about business schools. Have all these professors actually practiced what they are teaching? Therefore, I love to talk to business leaders with a proven track record. I have been working for over 40 years in the IT industry for subsidiaries of American companies and love to share the learnings I have made along the way.

They say: “Knowledge is Power”, but it is the practice of that knowledge that makes it powerful, otherwise it just ends up on the shelf. 

I am very interested in your feedback. What were your most impactful learnings so far and how did they come about? Who are the people who helped you along the way?

The Primary Question

There actually is a so-called Primary Question that we ask ourselves many times each day, whenever we assess a situation. This primary question is connected to our beliefs and as such it can have empowering or disempowering influence on us. Examples of disempowering primary questions are:

  • Why am I not good enough?
  • Why doesn’t everybody love me?

Both questions state a negative absolute belief.

Sometimes the question has a negative presumption or negative consequences in the long run. “How can I make this better” looks like a great question – doesn’t it? As a consequence though, if you ask yourself this question all the time, nothing will ever be good enough and you will become a perfectionist who is never satisfied with anything. 

“How can I make this person happy” looks like a helpful question to ask in a relationship, but when you realize that ultimately it is not in our power to make another person happy, you find that you might be setting yourself up for an impossible task. That does not mean that this is a bad question all together, but there is a danger associated with it. 

Examples of empowering primary questions are:

  • How can I appreciate this moment even more?
  • What can I do right now to support myself and others?

The first one has the positive presumption that you appreciate this moment already. The second one reminds you to look after yourself and others?

When assessing a primary question, we should look at the following:

  • What are the most powerful and driving positive / empowering beliefs that cause us to consistently ask this question?
    • If you achieve the object of your focus – what will happen?
    • How will you feel?
    • What will you get?
    • How will others be impacted?
  • What are the most powerful and driving negative / disempowering beliefs that cause us to consistently ask this question?
    • If you do NOT achieve the object of your focus – what will happen?
    • How will you feel?
    • What will it cost you?
    • How will others be impacted?
  • What emotional references from the past triggered this question?
  • What needs are you trying to fulfill through this question?

Does this sound like this is your destiny no matter what? There is hope! You can change your primary question by creating a new one which is more empowering and helps you to fulfill the same needs as the old one did.

Please share in the comments: What is your primary question? How is it serving you? What are possible downsides when you consistently ask this question?