Theranos's corporate culture was a nightmare

John Carreyrou broke the story of Theranos' epic medical fraud. At Wired he now takes a sharp look at its dysfunctional corporate culture, excerpted from his new book on the corrupt Silicon Valley unicorn's spectacular downfall, Bad Blood [Amazon].

Not all of it was Elizabeth Holmes, either. COO Sunny Balwani was a quietly stupid office tyrant:

[Theranos'] device remained very much a work in progress. The list of its problems was lengthy.

The biggest problem of all was the dysfunctional corporate culture in which it was being developed. Holmes and Balwani regarded anyone who raised a concern or an objection as a cynic and a nay-sayer. Employees who persisted in doing so were usually marginalized or fired, while sycophants were promoted.

Employees were Balwani's minions. He expected them to be at his disposal at all hours of the day or night and on weekends. He checked the security logs every morning to see when they badged in and out. Every evening, around 7:30, he made a flyby of the engineering department to make sure people were still at their desks working. With time, some employees grew less afraid of him and devised ways to manage him, as it dawned on them that they were dealing with an erratic man-child of limited intellect and an even more limited attention span.

Holmes, by contrast, was savvy yet unreasonable. And it got worse after high-ranking staff quit rather than be party to Theranos going public with its unreliable tech...

The resignations infuriated Holmes and Balwani. The following day, they summoned the staff for an all-hands meeting in the cafeteria. Copies of The Alchemist, Paulo Coelho's famous novel about an Andalusian shepherd boy who finds his destiny by going on a journey to Egypt, had been placed on every chair. Still visibly angry, Holmes told the gathered employees that she was building a religion. If there were any among them who didn't believe, they should leave. Balwani put it more bluntly: Anyone not prepared to show complete devotion and unmitigated loyalty to the company should "get the fuck out."

You look at all this and wonder at the legal event horizon, for corporate executives, beyond which nothing is truly forbidden. But then you realize that Theranos was a just billion-dollar version of Amy's Baking Company.