This week the fallout from overpromising the on the ability to deliver the miniLab spreads to Safeway in our re-read of Bad Blood, Secrets and Lies in a Silicon Valley Startup.  Overpromising is a problem every team and organization faces. Almost all humans want to say yes and make people happy. As trained problem solvers, we rarely meet problems that we can not overcome, and hence we are optimistic in what we promise.  The shenanigans at Theranos might not have the same root cause. Buy the book and read along!  In Chapters 7 and 8 we examined the impact of overpromising from the point of view of Theranos.  In Chapter 9 we see the mayhem that overpromising and underdelivering (in this case underdelivering might be replaced with fraud) delivers when they combine with a leader of Safeway falling under the thrall of Elizabeth Holmes.  The chapter begins by setting the context from the point of view of Safeway (large public grocery store chain for non-US readers that was acquired by Albertsons in 2015). As a public company, stockholders and stock analysts are very interested in the current and projected earnings per share (EPS).  The company was experiencing a period of lower than anticipated EPS. As part of his plan to get EPS growing again, Safeway’s CEO made a wellness play. Steven Burd, CEO of Safeway, left the definition of the wellness play in a very nebulous state well briefing analysts.  The wellness play Burb was hitching his career to was based on Safeway’s partnership with Theranos. The partnership, at its core, was based on Theranos delivering the miniLab and Safeway dumping a ton of money and space into health clinics in their stores.

As we have seen in previous chapters, nothing at Theranos went as planned and commitments were worthless.  After several delays that raised red flags with Safeway leadership, except with the CEO who deflected all criticism of Elizabeth and Theranos, Safeway set up a prototype wellness clinic on their corporate headquarters campus. Without, of course, the Theranos miniLab. Theranos did all of the blood work, but Theranos had Safeway draw blood two ways (from the finger and from the vein) and then send the blood their lab. Both procedures raised more red flags both with Safeways medical staff and executive leadership (except again with the CEO, who deflected all criticisms).  Adding malpractice to the mix, the results of the blood work returned to Safeway were horribly inconsistent and often wrong. The results were a reflection of inexperience, poor technical practices, and Theranos’ culture. As with all things Theranos, anyone who tried to point out problems or suggested things were not being done correctly were summarily terminated.

The chapter ends with the Safeway board announcing the “retirement” of their CEO due to the continuing malaise of their EPS and the delays deploying the wellness play.  Burd’s, Safeway’s now-former CEO, special relationship with Elizabeth immediately disappears, she doesn’t even return his calls, and the Safeway relationship now falls to Sunny.

Simply put, overpromising and under delivering serves no one in the long run. Earlier chapters have highlighted the internal turmoil and this chapter shows the impact on Safeway.  I was recently discussing sprint commitment tactics with a development manager and product owner. They had  adopted a practice of slightly under-committing and overdelivering with a backup that if the team needed more work the product owner would have enough of work prioritized for them to draw in.  The practice made the team predictable and gave the product owner a huge amount of flexibility to address production problems or changes in the market. The approach that Theranos took was the mirror image (same but backward).

Previous Entries:
Week 1 – Approach and Introduction – https://bit.ly/2J1pY2t     
Week 2 — A Purposeful Life and Gluebot – https://bit.ly/2RZANGh
Week 3 — Apple Envy, Goodbye East Paly and Childhood Neighbors – https://bit.ly/2zbOTeO
Week 4 — A Reflection –https://bit.ly/2RA6AfT
Week 5 — Sunny – https://bit.ly/2AZ5tRq
Week 6 – The miniLab –  https://bit.ly/2rfmwJh