Failing Data Analysis in the Theranos Trial

The criminal trial against Theranos Founder and former CEO Elizabeth Holmes now focuses on testimony from Safeway, Walgreens, and Johns Hopkins University. Questions involve how these companies evaluated Theranos’ blood-testing technology and concluded that it was sound when, in fact, results was consistently false.

At this point in the trail, investors blame Holmes, whose defense is that the companies did due diligence and are responsible for their decisions. A Wall Street Journal article about the arguments highlights the companies’ and the university’s failings and over-reliance on Holmes’ claims.

As the relationship between Safeway and Theranos progressed, CEO Steve Burd wrote an email to Theranos with the subject, “Becoming Discouraged.” He testified, “I think whenever you start something new you’re going to have some rough spots, but we continued to have rough spots. We had samples that were lost. We had results that didn’t make any sense.”

We’ll see how the trial evolves, but clearly, experts needed to ask more questions up front. In some cases, they didn’t test the actual technology themselves. This story is a good example of failures in integrity and data analysis—perhaps for many involved.

Raiders Coach’s Language and Resignation

The New York Times described emails sent by Raiders Coach Jon Gruden that included racist, homophobic, and sexist language. In his statement, Gruden wrote a short statement on the Raiders’ Twitter account.

The statement isn’t exactly an apology, as we define it in business and corporate communication. Gruden doesn’t describe his behavior or the impact on others.

Raiders owner Mark Davis wrote an even shorter statement: “I have accepted Jon Gruden’s resignation as Head Coach of the Las Vegas Raiders.”

Critics of the decision evoke the “cancel culture,” while others believe Gruden’s comments were outlandish. In a business environment, his language would never be acceptable. The NY Times article quotes Gruden, which I’ll avoid here.

Stunning Trove of Facebook Internal Documents

The Wall Street Journal has uncovered internal emails, reports, and presentations that show Facebook’s communication struggles and contradictions. Some messages are in draft form and illustrate conflicts within the organization about how to manage apps and report on information. In one document, an employee wrote, “We are not actually doing what we say we do publicly.”

A document marked as attorney/client privileged, refers to a “whitelist,” which means that different standards apply to certain elite users. A WSJ writer explains the issue:

At times, the documents show, XCheck has protected public figures whose posts contain harassment or incitement to violence, violations that would typically lead to sanctions for regular users. In 2019, it allowed international soccer star Neymar to show nude photos of a woman, who had accused him of rape, to tens of millions of his fans before the content was removed by Facebook. Whitelisted accounts shared inflammatory claims that Facebook’s fact checkers deemed false, including that vaccines are deadly, that Hillary Clinton had covered up “pedophile rings,” and that then-President Donald Trump had called all refugees seeking asylum “animals,” according to the documents.

Other documents provide research about the negative impact of Instagram on teenage girls, including exacerbating body-image concerns and suicidal ideation. Yet, publicly, company officials have focused only on the benefits. During a congressional hearing, CEO Mark Zuckerberg said, “The research that we’ve seen is that using social apps to connect with other people can have positive mental-health benefits.” A spokesperson for Instagram told reporters that the negative impact on teens’ mental health is “quite small.”

So far, I don’t see a response from the company. This will be a difficult one to downplay, particularly with so many conflicting voices from within the company. This situation illustrates issues of transparency and integrity—inconsistency with Facebook’s stated values and public claims. Facebook might do best to acknowledge challenges and promise to do better, and then we would see whether they do.

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Opening Statements in the Theranos Trial

Elizabeth Holmes is facing a criminal trial for her role in the spectacular success—and spectacular failure—of Theranos, a startup that claimed to change how people give blood and get health results. The high-profile case involves board members like Henry Kissinger and Rupert Murdoch, who believed in the company and in Holmes.

Opening statements are a lesson in persuasive communication. The prosecution said, ”This is a case about fraud and about lying and cheating to get money.” They accuse Holmes of knowing that test results were invalid and continuing the business as usual. Pointing to the fame Holmes received, prosecutors paint a picture of a desperate, failing executive who would do anything to protect her business and reputation.

The defense team presents Holmes as a victim—a hardworking entrepreneur doing her best and challenged by mental abuse from Ramesh Balwani, the company COO and her former boyfriend.

Each side framed their positions, and now we’ll see what evidence they present to support their claims. Holmes could face 20 years in prison, which is unusual for a corporate CEO. The second day of the trial was cancelled because a juror was possibly exposed to COVID-19. The drama continues…

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Robinhood's Strategy Faces Regulatory Questions

Robinhood is in the news again for its marketing tactics. I featured the investment app in the 11th edition of Business Communication and Character for its aggressive communication, including gaming graphics, to lure young, inexperienced investors into trading.

When users open a Robinhood account, they receive a free share to get started. This requires a proxy statement to be delivered to the user, which costs small companies a lot of money—for very few purchased shares. New regulations may prevent companies like Robinhood from seeking reimbursement.

Users don’t get any great bargain. As a Wall Street Journal writer explains, “Customers have a 98% chance of receiving a share priced between $2.50 and $10.”

Robinhood has maintained its defense as it faces increased scrutiny. A spokesperson said, “Customers love our free-stock program, and we think it fits squarely into our mission to democratize finance for all.”

This situation is another example of how the company’s strategy benefits some but negatively impacts others. For that reason, the communication becomes an issue of character—failing to consider the effect of one’s actions.

Apple Clarifies Policy

Apple software chief Craig Federighi spoke with a Wall Street Journal reporter about a misunderstood policy related to child pornography. The company had announced new reporting guidelines for illegal content. As part of the same message, they described new guidelines about photos sent to and from children. User backlash concerned how the company was monitoring their phones.

Federighi said, “I do believe the soundbite that got out early was, ‘Oh my God, Apple is scanning my phone for images.’ This is not what is happening.” He clarified that, using algorithms, they’re looking at photos stored on iCloud—not on people’s phones. The company is flagging only those photos that meet criteria of child pornography.

During the published interview with the WSJ reporter (what made the final cut on the website), Federighi didn’t emphasize the end goal: protecting children. The reporter provided this context, but the message was not at the forefront’s of Federighi’s main points. His focus was on clarifying the initial message: “I think our customers own their phones,” again, distinguishing what we choose to post on Apple’s server.

Federighi also demonstrated humility by admitting that the message was garbled and that AI technology does make mistakes. In hindsight, it sounds as though Federighi would have announced these guidelines in separate messages with more detail about the photo search process.

Millennials Talk Openly About Salaries

According to a Wall Street Journal article, millennials don’t carry the salary baggage of previous generations. Growing up in the open world of social media, this generation is used to sharing information about themselves that older people might consider taboo. In addition to salaries, millennials talk about credit card debt, savings, and other financials.

The transparency is helpful to other people their age. Employees can negotiate for fair salaries and, in some cases, not feel shame around money because they know that others are either in similar situations or have advantages that they don’t enjoy. The article also cites examples of people feeling better about their circumstances knowing that others carry a lot of debt, while they choose not to.

The article reminds me of the idea of “radical transparency” practiced at Bridgewater Associates and, to a lesser degree, some other companies. Being open about employees’ performance and compensation can cause hard feelings but may encourage a greater degree of fairness.

Clear Line Charts

A New York Times opinion article illustrates the power of the line chart. With the title, “This Is Tax Evasion, Plain and Simple,” the author describes the U.S. corporate rate over time and compared to other countries.

The authors argue that countries have reduced corporate rates to compete for businesses, and over time, the rate has become too low. The chart at right compares the U.S. to other countries, while the chart below shows the change in U.S. wage and corporate taxes since 1950.

Additional charts show that companies have moved money to tax havens abroad, but economies and workers have not benefitted.

An economist and a writer and graphics editor paired up to produce the article. We see the influence of both—the data, plain language, and charts paint a vivid picture.

Blame the Intern

HBOMax customers received an email with the subject, "Integration Test Email #1,” that obviously wasn’t intended for them. In a follow-up email, the company blamed an intern for the mistake.

Twitter responses poured it to support and empathize with the intern. Embarrassing stories ranged from sending emails to big groups to typos. As an intern, someone replaced all “parties” to “panties” in a 50-page legal document (dare I say “brief”?).

The best was when Monica Lewinsky weighed in.

Interns make mistakes; we all do. Facing the situation with humility—the ability to learn—is the best approach. The HBOMax situation could have been a lot worse, and fortunately, the public turned it around to focus on the shared experience we have all had.

Free Speech Case

In an 8-to-1 vote, the U.S. Supreme Court ruled that a high school cheerleader could use F-bombs on social media. The student was suspended from the team after posting a video and disparaging the team and the school. But the court upheld her right to free speech.

The justices did say that the school has the right to take action when a student’s behavior in person—or online—is disruptive to the classroom, but they didn’t believe that this case warranted the school’s decision.

This was an important decision but left the door open to other cases. As one attorney said, the decision was “common sense,” but others might be greyer and more complex.

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Peloton Announces Recalls

After resisting action despite consumer product warnings, Peloton has conceded and is recalling two models of its treadmills. One child died and more than 70 people were injured, so the Consumer Product Safety Commission (CPSC) recommended the recalls a month ago.

In the company statement, CEO John Foley admitted the mistake:

The decision to recall both products was the right thing to do for Peloton’s Members and their families. I want to be clear, Peloton made a mistake in our initial response to the Consumer Product Safety Commission’s request that we recall the Tread+. We should have engaged more productively with them from the outset. For that, I apologize. Today’s announcement reflects our recognition that, by working closely with the CPSC, we can increase safety awareness for our Members. We believe strongly in the future of at-home connected fitness and are committed to work with the CPSC to set new industry safety standards for treadmills. We have a desire and a responsibility to be an industry leader in product safety.

The CPSC said the decision came after “weeks of intense negotiation and effort.” Peloton will suffer financially: the company has stopped selling the treads and is offering a full refund of more than $4,000 for the products. But executives may have spared themselves and the brand some reputation damage if they had acted earlier.

Amazon’s Statement About the Failed Union Attempt

Employees at Amazon’s Bessemer, Alabama, warehouse voted against forming a union. Of 5,876 employees, 1,798 voted against and 783 for the union—not enough. The New York Times presents a simple, clear graphic of the vote.

Critics say that Amazon used aggressive tactics to deter workers from favoring the union. For example, union organizers approached employees at a traffic light, which the city changed based on a request from Amazon management. The change led to longer green lights and shorter red lights based on traffic. Before the vote, the National Labor Relations Board (NLRB) determined that two employees were fired illegally for their union-organizing activity.

In messages to employees, the company used a slogan, “Do it without dues,” meaning employees should negotiate with their managers and not through a union, which charges fees. The slogan was also the URL for a website, which has since been removed.

Amazon posted a statement about the win. The company denies intimidation charges and reinforces its $15 wage and starting benefits. Although the statement indicates that 16% of employees at the facility voted for the union, a higher percentage of those who voted were favorable towards the union.

CEOs Speak Out

JPMorgan Chase published its Annual Report, leading with a letter from CEO Jamie Dimon. The introductory paragraph and corresponding callout quote reflect a leader’s and a company’s grappling with an extraordinary year.

Like many company leaders today, Dimon addresses societal issues directly. We’re seeing increasing employee and CEO activism, and this letter is a good example.

A Wall Street Journal opinion piece questions when leaders are even more direct about political events, such as Black leaders in Georgia speaking out against the election law decision. The law restricts voting rights, which doesn’t affect the companies directly. The WSJ editorial board writes, “To wit, they are pitting themselves against the interests of their own shareholders.”

The open letter appeared as a full-page ad in The New York Times, signed by Black CEOs, former CEOs, and others of major U.S. companies.

In my view, the CEOs demonstrate leadership character, particularly authenticity, courage, and integrity. By definition, demonstrating character carries some personal risk.

AstraZeneca's Data Problems

AstraZeneca has been accused of presenting “outdated and potentially misleading” data about the vaccine that has suffered implementation trouble in Europe. In a press release and a CNBC interview with the president, the company reported a 79% effectiveness rate, despite later results between 69 and 75%.

A group of independent experts wrote a letter to U.S. government officials to express their concern, as The Washington Post reports:

The DSMB is concerned that AstraZeneca chose to use data that was already outdated and potentially misleading in their press release,” the letter states. The data “they chose to release was the most favorable for the study as opposed to the most recent and most complete. Decisions like this are what erode public trust in the scientific process.”

The company promised a review: “We will immediately engage with the independent data safety monitoring board to share our primary analysis with the most up to date efficacy data.” But damage is already done.

The Washington Post explains, “But it appears to be the latest in a series of self-inflicted wounds from the team behind the vaccine, which has had months of stumbles involving messy science and bungled communication.”

This latest misstep only complicates a possible U.S. rollout and breeds more skepticism in those who fear the vaccine. Fears in some populations, such as Black Americans, are based on understandable mistrust of the healthcare system, and this news will not likely inspire more participation in plans for herd immunity.

As an issue of credibility, AstraZeneca is caught in a public quagmire. What might have been a small misstep is now viewed as part of a larger, potentially intentional plan to deceive, whether or not that is true. The company’s integrity is in question because they have not been fully transparent about the vaccine results.

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Comparing News Reporting About Shooting

How the media reports news reveals their political leanings and inherent biases. Compare the home pages of the New York Times and the Wall Street Journal from screenshots taken the evening of March 17, 2021.

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The New York Times led with the news and posted five stories at the top of the page. Stories focus on “Anti-Asian Hate in the U.S.” The Wall Street Journal posted one small article, and the headline makes no reference to the victims—six of the eight were Asian women.

I’m struck by the surrounding articles on the WSJ home page. The business and economy focus makes sense for the paper’s mission, but several other articles imply negative messages about Asians or Asian countries.

The headline about the Tokyo Olympics official, particularly, is quite inflammatory (or as a student in class said, “clickbait”). Although the news is notable given that this is the second official to resign for negative comments about women, the photo and headline, below news of the shooting is, as my partner said, “insensitive.” Do we need the actual negative statement?

Also in fairness to the WSJ, the shooter had not (and as of this writing, has still not) been charged with a hate crime, and he denies the association of bias. Perhaps the NYT is fueling the flames of xenophobia?

And yet, discrimination, bias, and violence against Asians and Asian Americans has been increasing in the U.S. Shouldn’t that be a significant part of any reporting about this terrible shooting?

Royal Family Responds to Racism Allegations

In an interview with Oprah, Prince Harry and Meghan Markle accused the British royal family of racism, and the fallout is severe. Markle talked about having suicidal thoughts and how she had been treated by the family, including plans for the couple’s baby. She said he wouldn’t have a title or security, and that the family had “concerns and conversations about how dark his skin might be when he was born.”

Prince Harry said that he a discussion with his grandmother and two with his father about the couple’s concerns until his father “stopped taking my calls.”

Victoria Murphy, a writer for Town & Country magazine, describes the family’s reaction:

So far, the royal family has remained tight-lipped. There have been no statements and, it seems, very little guidance offered. Perhaps they are retreating into a default “no comment” stance, or perhaps they are sensibly waiting to see what sticks before deciding whether to add fuel to the fire. In this war of words, there is a sense that we could go on and on.

Buckingham Palace did release a short statement, and the Queen took some time before signing off:

The whole family is saddened to learn the full extent of how challenging the last few years have been for Harry and Meghan.
The issues raised, particularly that of race, are concerning. While some recollections may vary, they are taken very seriously and will be addressed by the family privately.
Harry, Meghan and Archie will always be much loved family members.

Of course, the issue is that the royal family is a public organization, with several public figures, whether they wish to be or not.

Two days later, Prince William gave an interview and said, “We’re very much not a racist family.”

Murphy sums up the situation: “Make no mistake, this is an interview that will go down in history as having rocked the British royal family to its core.”

Governor Cuomo Address Sexual Harassment Allegations

In a video statement, Governor Andrew Cuomo addressed sexual harassment allegations made by three women. He begins well, explaining his decision to speak directly to the public on the topic, although lawyers advised him to wait. To preserve his image, this is a good call: research shows that his apology is unlikely to negatively affect lawsuit outcomes—and may even have a positive effect.

But his apology goes awry. He uses language that is classic in non-apologies, for example, “It was not my intention” and “I certainly never meant to….” In sexual harassment law, intent does not matter—only the impact. Further, this type of language typically doesn’t land well. People don’t care. Instead, he should focus on the impact on these women and perhaps on the office.

He also says, “I now understand that I acted in a way that made people feel uncomfortable.” This is problematic because first, as he says at the beginning, he is a lawyer. As a lawyer and as a political leader, he should know better. Such language is reminiscent of “I’m sorry if you were offended,” implying that it’s the receiver’s problem. A couple of days earlier, after the second allegation, the governor said, “To the extent anyone felt that way, I am truly sorry about that.”

To his credit, he says, “I apologize” and “I’m sorry,” which people do want to hear in these types of statements.

We will see what results from these allegations, in the midst of calls for his resignation. Governor Cuomo also is embroiled in charges that he lied about the number of Covid deaths in nursing homes. So far, he says that he will not resign.

School Board Apologizes for Mocking Parents and Resigns

The Board of an elementary school in California resigned over embarrassing comments on a video call. Board members didn’t realize that they were public when they made disparaging comments about parents wanting schools to reopen. They mentioned that parents miss teachers as “babysitters” and want to be able to use marijuana again.

In response, several board members resigned, and the school district wrote a statement. Within the larger statement is a message from the board members who resigned:

We deeply regret the comments that were made in the meeting of the Board of Education earlier this week. As trustees, we realize it is our responsibility to model the conduct that we expect of our students and staff and it is our obligation to build confidence in District leadership; our comments failed you in both regards, and for this we offer our sincerest apology.

We love our students, our teachers and our community, and we want to be part of the remedy to help the District move forward, returning its full focus to students' needs. To help facilitate the healing process, we will be resigning our positions as Trustees of the Oakley Union Elementary School District, effective immediately. The Superintendent will be working with the Contra Costa County Office of Education to address the vacancies on the Board of Education.

This was a difficult decision, but we hear the community's concerns, and we believe yielding to your request that we step down will allow the District to move forward. Please do not let our failure in judgment cast a shadow on the exceptional work that our teachers, administrators and hard-working employees are doing for the students of this District. They deserve and will need your support as you move forward.

Business communication students will find ways to improve this message. The authors use passive voice in the first statement and weak subjects twice in the first paragraph (“it is”). As an apology, the statement also could do better. Sincere apologies include more about the impact of the act—the damage done. I don’t see that recognition clearly.

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Lincoln Project Statement

Frank Bruni is right his article, ”When You Don’t Have Trump to Hide Behind: There’s now space for other scandals. Witness the Lincoln Project.” I’ve been missing hearing about improprieties with the shadow of Trump for the past four years. Now trouble at the Lincoln Project, a political group started in 2018 by Republicans to prevent the re-election of the former president, has come to light.

The issue raises questions of integrity. As the organization criticized the former president for his actions, 21 young men accused one founder of sexual harassment, while organization leaders knew of but did nothing about their complaints. In addition, questions linger about whether group leaders misused funds for personal gain.

The one leader accused of “grooming young men online” responded in a statement:

I am so disheartened and sad that I may have brought discomfort to anyone in what I thought at the time were mutually consensual discussions. In living a deeply closeted life, I allowed my pain to cause pain for others. For that I am truly sorry to these men and everyone and for letting so many people down.

The Lincoln Project also issued an official statement. One, dated January 30, isn’t available because of a broken link on the homepage. But another, dated February 14, is below:

The Lincoln Project has retained the law firm of Paul Hastings to investigate allegations of inappropriate behavior by John Weaver as part of a comprehensive review of our operations and culture. The review process is currently underway.

We are committed to creating a positive, diverse, and inclusive workplace environment at The Lincoln Project and inappropriate behavior by anyone associated with the organization will not be tolerated under any circumstances. We have already taken decisive action to address internal concerns. Additionally, we are releasing staff and former staff from the confidentiality provisions in their employment agreements to discuss their workplace environment. Based on the findings of this review we will take all necessary action to correct any issues or deficiencies that are identified.

Concurrently, we are also working with outside counsel and professional consultants to strengthen our corporate governance, finance and operational structure, human resources, and leadership to position The Lincoln Project to further maximize our impact and lean into our important mission advancing democracy.

The Lincoln Project was founded to combat political forces who seek to undermine our democracy. We revolutionized how political action committees operate and spent $81 million last cycle to create and place more than 300 advertisements, host national town halls, conduct voter outreach, and launch a podcast and streaming video network that engaged millions of voters. Eighty percent of our funds went to voter contact and content production. Our historic results speak for themselves.

Moving forward, we have important work ahead of us and we have created a nationwide movement of Americans who support our objectives.

In order to continue fulfilling our promise to our millions of supporters and contributors, we must address any and all internal organizational issues immediately and put in place a governance and diverse leadership structure that reflects our core values and ensures we will continue to attract the best talent available.

The Lincoln Project will continue producing and distributing our popular content and commentary while these reviews are being conducted and we are operating at full capacity.

The statement start is unfortunate and squirrely. Perhaps an apology might be more appropriate? As an apology, if this is the intent, the statement doesn’t work very well. Apologies admit specific wrongdoing, acknowledge the impact, and describe positive steps planning for the future. I don’t see that here.

Tokyo Olympics Head Resigns Over Sexist Comments

Former Japanese Prime Minister and president of the Tokyo Olympics made sexist comments about women and has resigned. This turmoil further complicates the games, which are already delayed because of COVID-19.

Yoshiro Mori said, “On boards with a lot of women, the board meetings take so much time,” “Women are competitive. When someone raises his or her hand and speaks, they probably think they should speak too. That is why they all end up making comments,” and “You have to regulate speaking time to some extent, or else we’ll never be able to finish.”

Several Japanese leaders spoke against Mori, and it’s interesting to compare their statements, particularly from companies that typically avoid public controversy. Few board members called for his resignation, but pressure was too great, including that from about 100 volunteers who quit.

In response to criticism, Mori said, “I didn’t mean it in that way, although it was said to be discrimination against women,” he said. “I have been praising women, promoting them to speak out more.” Mori also spoke of age discrimination. He is 83 years old. He said, “Old people are also doing well for the sake of Japan and the world. I feel extremely unhappy that older people are said to be bad. But it may go nowhere if I complain.”

An ABC writer calls the press conference “hastily prepared.” His apology wasn’t good enough to stave off the criticism, and he was forced to resign.