Theranos: How long is too long when responding to allegations about your company?


The backstory:

Recently, the Wall Street Journal  questioned Theranos Inc.’s founder Elizabeth Holmes that her $9 billion dollar company wasn’t using its own technology. The WSJ tried to get ahold of Holmes for five months before she finally agreed to an interview this past week.

What is Theranos?

Theranos is a company that could potentially change the way blood is drawn. The theory behind Holmes’ brilliant idea is with only a small finger prink and a few drops of blood, Theranos’s technology can test for over 240 diseases ranging from cholesterol to cancer. This idea has made Holmes worth $4.5 billion dollars at only 31 years old.

However the accuracy of these tests is not conclusive and Theranos employees have reported that in 2014, only 15 tests were conducted on Theranos’ product “Edison” and the rest of the tests were conducted on other companies’ equipment.

Theranos states that its practices abide to all federal regulations and the company has not exaggerated its achievements. The company has declined to acknowledge that Edison can only perform 15 tests and will not disclose the actual number of tests Edison can do because of “trade secrets.”

So, what’s the problem?

The biggest issue with the five-month delay is why? Holmes lack of response, up until now, is very suspicious and does not make Theranos or Holmes look good. Now Holmes and Theranos have completely changed their story including the methodology about how blood is actually drawn.

According to Fortune,  “In the (Wall Street) Journal article, the newspaper notes that a sentence saying “many” of Theranos tests only require a few drops of blood was removed in recent months and that Theranos’ lawyer said the change was made for marketing accuracy. However, Theranos says the lawyer was misquoted and the company changes its website regularly.”

What Holmes should have done:

Regardless of whether or not Theranos used its own technology, Holmes should have addressed the issue five months ago. Waiting too long to address a complaint makes both Holmes and Theranos look bad and could be perceived as covering up the truth. In Holmes most recent interview with the Wall Street Journal, she claimed that Theranos will be publishing a document that would have important details regarding this issue. As great as that is, the document and Holmes response should have been five months ago and not last week.

Why responsible advocacy is important

Companies, like Theranos, need to practice responsible advocacy to regain the public’s trust.

According to Ethics In Public Relations, there are three steps companies can take to adhere to this.

  1. Consider the harms and benefits to the organization’s stakeholders that can reasonably be expected to result from the organization’s actions.
  2. Maintain respect for stakeholders and provide background information necessary to make informed decisions.
  3. Let the stakeholders know of the potential harms and benefits of any action.

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