“Fake it till you make it”, “Move fast and break things”… So many hard-skinned Silicon Valley slogans. Why are entrepreneurs tempted to engage in such fraudulent or destructive practices? A research project by Guillermo Mateu, researcher at Lessac (Laboratory of Experiments in Social and Cognitive Sciences) of the Burgundy School of Business, associated with Lucas Monzani, Alina Hernandez and Jose Martinez, has highlighted the typical profiles of these entrepreneurs who are ready to do anything to get there. decryption.
What drives some entrepreneurs to deceptive or fraudulent behaviour?
Our research was conducted in two phases. The first part involved 82 French students who were destined to become entrepreneurs. It was followed by the analysis of a series of 64 Latin American entrepreneurs. The first group, like the second, clearly showed that men cheated more often than women. Because traditional gender stereotypes, male or female, influence behavior at the head of a company. Men are expected to be aggressive, competitive and achieve results, while women are expected to be empathetic, listen, compromise and have a win/win attitude.
Did the study of the second group of confirmed entrepreneurs also reveal behaviour-specific characteristics?
In the second group of makers, we showed that, regardless of gender, an entrepreneur is too subject to social pressure to succeed at all costs, of the “I’m going to break everything to reach my goal” type. He is tempted to adopt hyper-competitive behavior, to harm competitors. These are questionable business practices. But the good news is that this dual profile of human and entrepreneur can be rebalanced toward better practices if the person is a positive and authentic leader. In other words, the more an entrepreneur has values and clear codes of ethics, the less likely he is to engage in fraudulent behavior.
However, there is a great temptation, for example in the research and development phase, to embellish the reality of certain studies in order to find funding. What is the limit to set?
Being optimistic is one thing. Cheating is another because sooner or later this behavior leads to destruction, at the risk of losing everything. Elizabeth Holmes, the creator of Theranos, was found guilty of fraud with her company’s technological evidence and financial results. She is convicted of fraud against her investors and will end up in jail. Meta (ex-Facebook) is under federal investigation for deceptive marketing that uses user data for advertising purposes. Ford or Volkswagen are overtaken by the scandals of fraudulent reduction of polluting emissions from diesel and petrol engines during homologation tests. Boeing has fined 2 billion euros and knowingly misled the FAA in the case of the crashes of their 737 MAX. In other words, as an entrepreneur or leader, never pretend, even if you have succeeded!
How to withstand the pressure from society and investors who expect entrepreneurs to succeed at all costs?
Society, the family, education or business schools play a major role in break these masculine and entrepreneurial stereotypes. Teaching “business ethics” in business schools only appeared in Europe about ten years ago. Still, it’s key to resisting fraudulent behavior. It’s about building strong values. Then cheating reveals a lack of confidence in yourself and in your project. An entrepreneur must therefore be confident, sure of himself and of his ethical values.