Lessons from the Theranos Saga – Part 2

The Theranos saga is a story of an organization that went through a period of unprecedented success for more than ten years only to experience a very sharp decline in less than a year. The sudden turn of events led to the closure of most of its firms. While the internet feasted on its intriguing story, many organizations looked into why the downfall happened and extracted valuable lessons that could help prevent similar incidences in the future.

In the first part of this article series, we discussed the causes of Theranos’ downfall. We have identified three main reasons, the first of which is about compliance issues. This problem has become the turning point in which the company had a hard time recovering from. The deviation from standards of quality as required by approving bodies was just too substantial for its laboratories to be able to comply with the requirements on time, and to continue operation. 

The bottom line is that the legalities involved in their non-compliance were staggering, especially that patient safety has been compromised for two years when their propriety machines produced inaccurate results. Scrutinizing the 121-page Statement of Deficiencies and Plan of Correction by the Centers for Medicare and Medicaid Services, it was the small things that piled up that caused Theranos’ derailment – incomplete paperwork, failure to document or report, unspecified or skipped protocols, inability to follow instructions and directions, and even expired reagents. 

What could have been done to prevent having compliance issues?

Compliance requirements are messy stuff because they have many details and are regularly updated. Managers cannot just put every requisite on a clean list to look at every time they need to reference protocol. When the source of compliance requirements is disorganized, it is easy to miss or forget new updates and other details. Updates should be propagated as soon as they come. A collaboration team that would institute changes should be timely informed. How well is the team in their project of change? Everyone involved in instituting the changes should be in the know-how of plans, progress and results. Is there a need for a quick reference to previous protocols? A digital medium, such as an intranet with strong and capable search features should be in place to make this possible.

Another reason for Theranos’ sharp fall is the lack of workforce development. From the moment of hiring, to talent management after the employment process, Theranos had shortcomings. They hired even unqualified staff. There was also a deficiency in the training of existing staff.

What could have been done to prevent workforce development deficiencies?

Hiring and onboarding processes should be fine-tuned, with stricter hiring rules, specifically on meeting qualifications. The task of handling diagnostic equipment and preparing results affect patient safety indirectly but significantly. Physicians rely on the results to make pertinent decisions. A small mistake in diagnostic results could jeopardize patients’ lives. Staff should be qualified. Period. No questions asked. They should understand what they are doing to get the best performance out of them.

But even qualified staff may fall short upon hiring. What could bridge the gaps during onboarding? Checklists provide tremendous help in this regard. A checklist itemizes tasks and expectations. Also, gamifying a new employee’s startup experience boosts confidence, increases learning, and melts jitters. Moreover, it provides instant recognition of small achievements.

Gamification is especially helpful when staff morale is low. Examine your work atmosphere. Is there too much pressure at work? Theranos’ reviews as an employer show both their good side, and also their not-so-good side. For the latter, employee engagement strategies such as gamification that feature task-tracking, and task completion acknowledgment, can go a long way in keeping staff at peak performance.

Training is also an important aspect of workforce development. With regulatory and compliance requirements changing every now and then, employees should keep pace and not lag behind. HR should not forgo skills training so that employees are always at par with set standards for operation. The knowledge part should also go side-by-side with skills training. When the job is specifically skill-focused, it is easy to be knowledge-deficient in the long run. How could knowledge deficiency be addressed? Microlearning is the answer.

Microlearning  is disseminating bits of pertinent information that contribute to employees' learning through digitalized media. It ensures that employees’ knowledge is regularly enhanced to match skills-set. Its main advantage is that there is no need to pull employees from their work to improve their knowledge. It timely delivers what they need to learn in a regular or self-paced structure, and it enables measurement of learning through mini-exams post-study.

Another cause of Theranos’ collapse is the lack of transparency. Apparently, the company did not have a medium for honest dialogue and feedback. The result was that stakeholders had a difficult time stating their viewpoints or directing their questions. This culture eventually led to groupthink. Due to their desire to maintain harmony and cohesiveness, managers failed to make accurate analysis, critical evaluation and sound decisions.

The role of transparency in organizational success has been backed by many researches. Transparency means getting ahead of the game. Lack of openness breeds distrust, uncertainty, misunderstanding, and loss of vital information and bright ideas. On the other hand, transparency ensures that stakeholders stay connected to the organization. It also motivates employees, invites innovative solutions, and leads to successful change management.

What could have been done to address lack of transparency?

When transparency is a problem, the management can make available a platform where feedback is enabled, and ideas and suggestions are welcome. A digital platform is best to use because it overrides the uneasiness of face-to-face confrontation and deliberation. Furthermore, those with access to the site have equal opportunity to receive, analyze, interpret and act on the feedback. It paves the way for looped communication to take place.  

The analyses made in this article series are cited to provide guidance only. They are not in any way meant to diagnose organizational loopholes and deficiencies. The proposed solutions are also not fix-all, know-all answers to challenges. But the Theranos saga has instilled invaluable lessons for healthcare organizations. Compliance, workforce development, and transparency are great players in organizational success. We keep on investing in these areas to keep up with the changing times.

ManageUP has developed platforms that have been proven successful in many accounts. Contact us to know more about how we have helped others reach their goals.





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