The Conscience Code by G. Richard Shell

Author:G. Richard Shell
Language: eng
Format: epub
Publisher: Harpercollins Leadership
Published: 2021-04-02T00:00:00+00:00

Wrapping It Up: The Power of Two vs. the Close, the Many, and the Powerful

It is impossible to say whether Shultz or Cheung, acting separately, could have brought about the result they did. But it seems clear that their collective power was more than the sum of its two parts. Shultz had hoped, when he brought Cheung to meet his grandfather the day before she resigned, that they might break the spell Holmes had cast on the stubborn, crusty former secretary of state. But that had not worked. All George Shultz had seen were two young, inexperienced idealists who did not grasp the “big picture” of the medical device business. Nevertheless, like Asch’s subjects who benefited from a “true partner,” they reinforced each other’s confidence in the truth of what they could see with their own eyes. And with two voices on the side of this truth, they proved to be persuasive, reliable sources for the Wall Street Journal.

Their story demonstrates the power of an ally when you encounter the pressures of a real-world conflict. Shultz and Cheung fed off each other’s energies, advanced each other’s strategic thinking, and provided independent, credible information from the inner workings of a corrupt organization that could be used as evidence by the legal system. But they faced consistent opposition from George Shultz and were intimidated, at least initially, by the positive media coverage given the charismatic Elizabeth Holmes and celebrity status of many Theranos stakeholders.

In short, Theranos was a “perfect storm” of the pressures identified as the enemies of ethical conduct earlier in the book:

Peer Pressure. Shultz’s and Cheung’s peers were passive players in the Theranos fraud, going along to get along. The weight of peer pressure was against them.

Authority Pressure. The top officers at Theranos brought direct pressure on Shultz and Cheung to stop their questioning and go along with the herd. Balwani personally berated them both, threatening them with termination. Even after they left, the firm’s lawyers and investigators stalked them and issued more threats to curtail their cooperation with the media.

Incentives. The Walgreens contract with its urgent deadline requiring the Edison to be a working product provoked the entire scandal. Everyone was working feverishly to make the deadline, not to create a safe, useful medical device.

Roles. Time after time, Shultz’s and Cheung’s junior roles in the organization were held up as reasons for them to stand down. They were told they were acting outside their areas of expertise and should let other, more senior people take responsibility for these important decisions.

Systems. When an entire company goes rogue, people like Shultz and Cheung face more than individualized opposition. Investors, bankers, other employees, and even the media may have a stake in maintaining the illusion that nothing is wrong. Fearful of losses and embarrassment, they form a wall of opposition to anyone who might burst the bubble.

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