The common startup ethos of “faking it until you make it” has permeated many aspects of business. This approach can create value for investors who are trading the business’s stock, and perhaps high-profile business leaders who are successfully faking it. It doesn’t focus on building a business with fundamental value. As a business owner or manager , you should be making it real, not faking.
What does “faking it until you make it” look like? It’s preselling a product you have only the vaguest sense of how to develop. It’s feigning deep expertise in a business area you know little about. It’s celebrating and taking credit for things you haven’t achieved—at least, not yet.
What are some examples of businesses faking it? Elizabeth Holmes’s Theranos is a modern classic. No viable path to the promised blood-testing machine, just massive dishonesty and hype. But faking it doesn’t have to involve outright fraud or failure. Beyond Meat is founded on a great idea and has actually developed appealing meat alternatives. But its management team lacks the expertise and skill to manage the complex and difficult grocery distribution network and harness the company’s market potential. And then there are the many companies pulling in billions in investment for automated driving systems, when the technology hurdles are massive and possibly insurmountable. The stock market rewards faking it because traders are transactional. Many stock purchasers buy and sell without a strong sense of how much the underlying businesses should be worth. They’re betting on short-term price changes. For a short-term investor, a grandiose showman who can hype a stock may be more valuable than a business with consistent cash flows.
If you are a small business owner or manager, though, your timeline is different. If you’re a business owner, your focus should be on cash and profit. Building status and reputation don’t matter after you’ve raised investment dollars. What does matter is building competence in all the aspects of the business, so you can serve your investors by ensuring that it performs as well as possible for them. If you’re a manager, you should be focused on long term results and relationships and building a reputation as a trusted partner to your customers and vendors.
Can you think of a time you felt tempted to fake it until you made it? I can recall implementing a new customer relationship management system I knew was rife with issues. In front of my staff I said “It’s great, it’s really going to make a difference.” I believed that, but at the same time I couldn’t figure out how to connect the software to our point of sale system. I was advocating because I wanted my staff to be excited, to believe, to invest in the new system alongside me. But it wasn’t yet clear to me how it would function.
How to get out of fake mode
What should we do when we notice ourselves slip into insincerity or overconfidence in our business lives? How can we get back to the real?
We can focus on competence. Dig a little deeper to make sure you’re rewarding hard work, not talk.
In interviews focus mightily on experience–what has this person worked directly on? What challenges have they confronted? How did they handle those?
When colleagues chirp about their results, ask them what they did, and what they learned will take to the next mission. If they can’t answer, they’re faking it.
Avoid people who seem focused on status, and surround yourself with those who are hard at work, developing their competencies.
What should I have done in my situation? How should I have talked about the new customer relationship management system? I should have started by openly acknowledging the challenges in developing any system that integrates to multiple technologies. And I should have recognized the quality of our team and had more faith in our ability to overcome the challenges.
The bottom line
When talking about your business, focus on understanding and improving the quality of your decisions. Communicate the why–the critical thinking–behind each action. Explain how you got there. Focus less on outcomes, and more on the journey and opportunities for growth. Your team may never come to think you’re the next Elon Musk—but they will follow you if they can understand your decisions and see there’s more to you than confidence, charm, and luck.