Introduction
Theranos was a global American technology company that provided various innovative products in the field of medicine. Elizabeth Holmes founded Theranos, based on a revolutionary technology: the ability to take a blood test with just one drop. The company’s new product was revolutionary, offering a more affordable and user-friendly solution to replace conventional blood tests. The company’s mission was to promote the early detection of the disease and do everything possible to provide people with a happy life.
The company’s goal was officially declared to be caring for people and striving for preventive treatment. This statement aligns with the mission and is an integral part of it. Competent management and the correct setting of the mission and goals are among the key factors contributing to the company’s great success and the substantial profit the organization has achieved. The company could not verify the veracity of the put-forward stakes, as its latest developments did not justify trust.
Negative Publicity
Theranos has invented a unique device with which a few drops of blood are enough to quickly identify HIV infection, diabetes, various forms of cancer, and many other dangerous diseases at the earliest stages. However, in 2015, a scandal erupted when a whistleblower raised concerns about a device released by Theranos called the Edison (Straker et al., 2021). The company’s founder and her chief assistant were involved in the proceedings. Later, the Wall Street Journal published a series of revelations claiming the results were unreliable and that the firm used gadgets from other manufacturers, such as Siemens, for much of its testing.
Elizabeth Holmes attempted to persuade Rupert Murdoch, also a shareholder of her company, to prohibit correspondents from publishing articles about her company, as he was the main shareholder of the Wall Street Journal. But the magnate refused to interfere in the editorial work. Lawsuits piled up, and partners severed all ties with Theranos. In 2016, US regulators banned the company from doing blood research until all violations found in the lab were fixed (Hans, 2020). Immediately after the incident, Elizabeth promised to establish a modern laboratory equipped with the latest research technology.
Such severe violations and litigation had a significant impact on the company’s reputation, generating negative publicity. The devices did not function properly, and the analyses were conducted at a third-party laboratory. Forbes magazine named Elizabeth Holmes the youngest female billionaire in the world in 2015 and included her in its ranking of the 100 most powerful women in the world (Ho, 2021). However, all the achievements were later reset due to the revelation of the truth.
Specific Goals
Some steps can be taken to combat negative advertising in such a situation. One of the main steps is to change the company’s CEO. Since its inception, Elizabeth Holmes has been a leader and public figure who has been spreading false information, and her continued presence will likely negatively impact her reputation. The public remembers and will not trust the company if someone has been deceiving its investors and clients.
The second important decision would be to publicly acknowledge the existing problem and apologize with compensation for damages. This decision will allow the company to partially restore its reputation with the public and investors. Such actions are essential for people to understand that they can trust the company again because it has corrected itself and is ready for new developments. The justification for this step is that serious violations cannot be forgotten.
Another action the new leadership should take is to create a future perspective. This means introducing a new critical direction for further development. Such a step is justified by the fact that the company should not leave the public without innovative ideas for an extended period. Presenting what the organization will do next will allow people to form a new, unbiased opinion.
Steps
- Elected a new CEO will enable us to complete the first step in transforming the company.
- Creation of a PR department.
- Issuance of a formal statement on behalf of the new leader.
- Assistance in judicial and administrative processes.
- Establishment of a strategic development department.
- Development of new company goals.
Six Ethical Values
In times of crisis, it is always essential to prioritize ethics when interacting with the public, who will become customers. Public relations can be regulated by following basic principles such as honesty, advocacy, expertise, independence, loyalty, and fairness. Honesty and fairness play a crucial role in dealing with customers, as it is vital to regain trust by speaking truthfully after a crisis.
Advocacy means that the PR person must protect the public’s interests and prevent events like those that happened with Theranos earlier. Expertise is vital in critical thinking and assessing the balance of power to develop an effective strategy. Independence means that PR professionals must be responsible and approach the crisis ethically. Loyalty is crucial for public relations workers because achieving results without supporting the company will be impossible.
Internal stakeholders encompass the company’s employees, management, and all individuals involved in the work. The proposed changes will positively impact them, as the new ethical standards will enable them to perform more effectively. Innovations concern creating conditions in which all employees can express themselves creatively. A competent organization of the PR department will enable the hiring and promotion of those who deserve it.
External stakeholders, such as customers and future users of the company’s products, will also benefit from these positive changes. They will be achieved through a new system of work in the organization. This is understood as the creation of a competent strategy for developing innovations and releasing effective products. In this way, new customers can be satisfied with the quality of service and fair treatment.
Evaluation Plan
The change evaluation plan should be based on several key indicators, including financial performance and customer satisfaction. The first aspect cannot accurately represent success, as Theranos’ past results in this sector have been very successful. However, this did not mean that clients benefited from this; it simply showed the interest of investors. Therefore, it is essential to evaluate the success of changes based on feedback from people.
Good results can be achieved based on public opinion because the product can be constantly improved. User feedback should be a key factor in evaluating performance, as the company’s primary goal is customer satisfaction. Thus, taking into account this unit of measurement, one can objectively understand what is happening according to the plan and what is not.
Conclusion
This paper focuses on the primary objectives of restoring the company and its reputation, as well as the steps to implement them. One crucial point will be reorganizing Theranos and creating new leadership. Next, the PR department should be improved, with its actions focused on creating a positive image. In addition, a key aspect of the work will be the development of fundamental innovations and the launch of new products. This will require laboratories and qualified personnel. However, despite the difficulties in restoring the company, it can be done by fulfilling the plans presented.
References
Hans, G. S. (2020). How and why did it go so wrong?: Theranos as a legal ethics case study. Georgia State University Law Review, 37, 427. Web.
Ho, J. (2021). Purposeful life or sugar-coated lies: How Elizabeth Holmes legitimised her fraud. Language & Communication, 77, 106-120. Web.
Straker, K., Peel, S., Nusem, E., & Wrigley, C. (2021). Designing a dangerous unicorn: Lessons from the Theranos case. Business Horizons, 64(4), 525-536. Web.