Richard W.

Hill

The BOSS
 The BOSS

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Printed in Switzerland
 Richard W. Hill

The BOSS
Machiavelli on Managerial Leadersh ip

PYRAMID MEDIA GROUP

New York
 Con tents

Pr efac e

I nt roduct ion :
What Can We Learn From Machiavelli?
I . The Nature of Machiavelli's Advice 10
II.The Source of Machiavelli's Advice 13
III.Machiavelli's Advice as Presented in This Book 20

The Boss
Machiavelli on Managerial Leadershi p
1. Seeking and Holding Power 24
2. Taking Charge of Centralized and Decentralized
Organizations: A Study in Contrasts 33
3. How to Take Charge of Departments Accustomed to
Being Run in Their Own Particular Ways 36
4. On Acquiring New Authority Through One's Own
Skill - Plus Luck 40
5. On Acquiring New Authority Through the Skills of
Others - Plus Luck 44
6. On Those Who Become Bosses Through Evil Actions -
Compared with Necessary Toughness 47
7 . On Being a Boss in Oligarchic or Democratic
O rg a n i z at io n s 50

4
8. How to Rate the Ability of Bosses to Stay in Power 63
9. On Bureaucracies 67
10.On the Importance of Sales People 70
11. What a Boss Must Do: Six Rules for Success 74
12.On Those Actions for Which People, Especially Bosses,
are Praised or Blamed 82
13.On Being Generous or Parsimonious 87
14. On Whether it is Better to be Loved than Feared
or Better to be Feared than Loved 89
15. On the Way Bosses Should Keep Faith: the Limits of
Candor 96
16.How Bosses can Avoid Being Despised and Hated 105
17. On Bosses' Behavior in Takeovers 109
18. What the Boss Should Do to be Respected 115
19.On the Subordinates of Bosses 117
20.How Bosses Should Avoid Flatterers 121
21.On Holding Power 126
22.The Role of Luck in Human Affairs, and How to
Channel It 129
23.On Organizations That Need Leadership 131

Postscript:
Machiavelli's Life and Times
I. Machiavelli's Life 132
II.Machiavelli's Times 134

5
 P r e fa ce

For almost five centuries politicians and political scientists

have studied a little book by a diplomat of the tiny republic of
Florence (population about one-hundred thousand). Entitled
Il Principe (roughly translated as The Prince), Niccolò
Machiavelli's book tells how various bold leaders gained and
held power in the city-states of Renaissance Italy. Thus its
subject is political leadership. Its method is close observation
of reality. Machiavelli's observations are illustrated and
reinforced by historical examples. The hard-headed author
rejects theories based on mere tradition or pure speculation.
First as a student, then later as a manager, I noticed that
Machiavelli's observations about political leadership apply
equally to other kinds of leadership, especially business
leadership. That idea led me to apply key parts of Il Principe to
business management. Machiavelli's observations fit the
business world so neatly that I have entitled my adaptation
The Boss. My arrangement of topics in The Boss follows fairly
closely the order of chapters in the original book.
In each of my twenty-three chapters, I start with an
adaptation of Machiavelli's observations on a vital topic or set
of topics. Then I make comments and raise questions about
the application of Machiavellian principles to modern
business. My comments and questions are illustrated and
reinforced by real-life cases, sprinkled with observations by
current authorities on business leadership.

6
 The reader can see that my preface stresses leadership
rather than management. I have chosen this emphasis to
reflect the thrust of Machiavelli's book and to address what I
believe to be the main failing of the large modern corporation.
The Boss is not about managerial techniques such as
centralization versus decentralization, delegation, or span of
control but rather is about the qualities of leadership. An
astute leader, as Machiavelli implies, can master managerial
techniques, or hire and motivate needed experts, whereas even
a brilliant manager (sometimes called a "technocrat") can fall
short as a leader.
Today's competitive business environment puts as much
pressure on would-be leaders as did the fiercely competitive
political environment of Renaissance Italy. Only the scale has
changed. Instead of facing a dozen or so rival city-states in
Italy, modern business leaders confront hundreds of
competitors around the world. Today's global economy
includes eager competitors in the former socialist states and
the emerging Third World, not to mention those in the Asian
"Tigers" and the developed countries. All the players, moreover,
have access to a bewildering array of technological advances,
in production techniques, in quality control, in transportation,
and in telecommunications. Machiavelli would undoubtedly
have relished the challenge. Since we cannot sit down with
him, we can learn from his most famous book.
Machiavelli's work is descriptive rather than normative.
That is, he describes what must be done in practice in order to

7
attain and hold power, without regard to moral, ethical, or
religious principles that might conflict with the attainment of
power. Machiavelli observes that, at times, a ruler acting in the
best interests of his state might need to violate commonly
accepted canons of behavior for individuals.
In the same way, managers must at times act in ways that
would not be condoned on the part of employees.
While Machiavelli's observations are based on a close
observation of reality, he himself appears motivated by an
idealistic view of the use of power: to improve the position of a
state with respect to its competitors and potential enemies.
Thus Machiavelli's writing can be considered optimistic, in
contract to the bleak pessimism that characterizes an equally
realistic work: George Orwell's Nineteen Eighty-four. Orwell
describes the horror that ensues when rulers pursue power as
an end in itself, rather than for the sake of a collective goal.
"The Party seeks power entirely for its own sake," says O'Brien
as he tortures Winston. "We are not interested in the good of
others; we are interested solely in power. ... Power is not a
means, it is an end. ... The object of persecution is persecution.
The object of torture is torture. The object of power is power."
Machiavelli would have been chilled by such a thought.
Indeed, Machiavelli observes that a successful leader must:
- possess expert knowledge in the area that
is most important for the success of
his or her organization;

8
 - be skilled at knowing when and how to use
this expert knowledge;
- have some luck.
While the role of luck is undeniable, its importance can be
reduced by appropriate behavior, and Machiavelli discusses this
point in depth.

Some years ago, a state legislature in the United States

passed a law declaring that the ratio of the circumference of a
circle to its diameter was 3.0 in that state, rather than 3.1416...
as elsewhere. The purpose of the law was to facilitate life for
the young students of geometry in the state. Needless to say,
the law failed.
Just as the laws of nature cannot be ignored or repealed, so
Machiavelli's maxims cannot be ignored or repealed, and
successful managers follow them, consciously or unconsciously,
willingly or unwillingly.
Success in a competitive environment cannot be achieved
without behaving in a way that is adapted to the pressures of
the environment: this is the essential message that Machiavelli
bequeaths to us from the 15th and 16th centuries. As we read
his maxims, we can see whether his observations are as
illuminating to us in the business world as they have been to
leaders of the political world since 1513.

9
 Introduction: What Can We Learn From
Machiavelli?

I. The Nature of Machiavelli's Advice

Politicians and political scientists have studied the writing of
Niccolò Machiavelli for almost five centuries. Indeed his short
book Il Principe, written in 1513, is widely recognized as the
first textbook on practical politics. Il Principe has been the
subject of lively controversy from the first pirated handwritten
copies to the printed editions in virtually every language.
Machiavelli's book has been damned as immoral, cynical,
pessimistic, and wicked, while being praised as realistic,
scientific, unsentimental, and honest.
The title itself, Il Principe, arouses misunderstanding. The
usual English translation, The Prince, suggests a hereditary
ruler. But that is not Machiavelli's topic. His subject is the
strong leader who maneuvered his way to the top of a city-
state in Renaissance Italy: whether a soldier, a priest, a
merchant, or an aristocrat. Although Machiavelli favored the
republican form of government - provided the state has a
virtuous citizenry - he accepted any form of government,
including monarchy, if well led. While he preferred cultivated
leaders - and recognized that hereditary leaders enjoyed the
advantage of continuity - his emphasis was on strong
leadership.
Il Principe is a textbook for those who aspire to positions of
political leadership. It contains advice on all the major

10
challenges that a would-be leader can expect to encounter.
Machiavelli's advice broke new ground-ground that is still
being tilled. Instead of deducing rules of behavior from
religious or philosophical assumptions about human nature,
Machiavelli based his advice on close observation of leaders.
His observations were made during fourteen years' service in
the foreign office of the Republic of Florence, as diplomat
abroad and civil servant at home. (How Machiavelli lost his
post, and how that loss affected him, are described in Part II of
this Introduction.) Since Machiavelli was a learned man, Il
Principe uses many historical examples. These examples,
however, are used to illustrate or reinforce the author's
observations - not to establish assumptions. Thus Machiavelli's
method departed from the classical and medieval deductive
approach, and was in harmony with the inductive approach of
the Renaissance - what we would call the case method in
today's business schools.
In this sense, Machiavelli's method is scientific. Like a
modern behavioral scientist, Machiavelli induced generalizations
about human behavior from systematic observations. Of course
he lacks some of the techniques of modern behavioral science,
such as surveys and statistical analyses, and his work lacks the
undergirding of modern psychological research. Nonetheless a
remarkable number of Machiavelli's generalizations are
supported by modern behavioral science.
Also like a modern behavioral scientist, Machiavelli avoids
moral judgements in Il Principe (though not in his other books).

11
Here he tries to exclude moral and ethical considerations -
what scientists call normative principles. Hence his focus is on
achieving success as a leader, rather than on attaining moral
excellence. (To be sure, Machiavelli cannot refrain from all
moral judgements in Il Principe. In Chapter VIII, for example,
he notes how "a man may get power" through "fearful cruelty
and inhumanity" but not "glory" nor a place "among the really
excellent men.") Another way to describe Il Principe is to mark
its concern with the real world rather than an ideal one. It is
Machiavelli's unflinching realism that offends many idealists.
And it is his "scientific cynicism" that offends many moralists.
Two legitimate objections can be levelled against I l
P r i n c i p e. The first is Machiavelli's assumption that all
human beings are naturally bad and motivated by
unlimited selfishness. Such an assessment was impossible
for Machiavelli to reach on the basis of his re lativ e ly
limited observations or the accumulated knowledge of his
time - and may indeed forever remain beyond the reach of
sc i en c e 1. Thus Machiavelli's pessimistic premise of inhere nt
human evil is as much a moral judgment as the optimistic
p remise of inherent human goodness.

1 Thirty years ago, a team of psychologists made a detailed study of

behaviors which they considered measures of ethical "soundness" among
graduate students at the University of California. Their conclusion: "Our High
Soundness subjects are beset, like all other persons, by fears, unrealizable
desires, self-condemned hates, and tensions difficult to resolve. They are
sound largely because they bear with their anxieties, hew to a stable course,
and maintain some sense of the ultimate worthwhileness of their lives." Were
these high achievers "good" or "bad"? See Creativity and Psychological Health
by Frank Barron (Van Nostrand, 1963).

12
 The second objection to Il Principe is that it does not
envision a human order beyond that of the nation-state.
In his concluding chapter, Machiavelli does foresee a
unified Italy supplanting an assortment of city-states.
Not surprisingly, however, he cannot foresee regional
and global political and economic confederations like the
European Union, the North American Free Trade Association, or
the United Nations.

To some extent forecasts about the success of

confederations in promoting human harmony depend on one's
assumptions about human nature. People must at least be
able, in the words of the US Constitution, "to form a more
perfect union." Note, however, that the US Founding Fathers,
like Machiavelli, accepted the Judeo-Christian belief in original
sin. As Madison wrote in The Federalist : "If men were angels,
no government would be necessary." Since they are not, he
advised, "Ambition must be made to counteract ambitions."
Regardless of how much a manager's own world-view differs
from Machiavelli's, he or she can learn much in The Boss
about the qualities of strong, successful leadership.

II. The Source of Machiavelli's Advice

The air was still and humid, the heat was stifling in Rome on
August 18, 1503. Pope Alexander VI, of the Borgia family, lay

13
gravely ill. Those who could do so had moved to the cool green
hills outside the city, to escape the furnace-like heat reflected
off the ancient Roman monuments. But the rulers of Rome
had not been able to leave, because foreign armies were
marching nearby and the political situation was critical.
The sultry heat took its toll of those left in the city. For six
days Pope Alexander had been fighting against a sudden fever,
but, at the age of seventy-two, he was too old to win.
He would die that night. His son, Cesare Borgia, il Valentino,
formerly Archbishop and Cardinal of Valencia, now
Duke of Valence, Captain General of the papal troops
and Duke of Romagna, had fallen ill at the same
time as Alexander, but had recovered just as the Pope died.
Enemies of the Borgias circulated the false rumor that Cesare
had, by mistake, poisoned himself and his father while
attempting to poison an unfriendly Cardinal. Many powerful
politicians were pleased to believe the rumor. With the death
of the Pope, Cesare's power base was eroded, and his
brilliant and rapid climb to power was menaced.
For years, Niccolò Machiavelli, envoy of Florence, had
observed Cesare, as he cunningly and skillfully used his and the
Pope's resources to build a strong state in central Italy.
Machiavelli had hoped and dreamed that Cesare would
continue to gain power, and would become the ruler, il
principe, who could unite Italy, and expel the foreign invaders.
But fortune intervened, by causing Cesare to fall ill at the same

14
time as his father, so that for six critical days no
Borgia leaders were able to manage Roman affairs.
And thus Machiavelli's dream faded, for he was too much
of a realist to believe that Cesare could overcome this crisis.

Later, in October, Machiavelli was in Rome, to observe

Cesare's struggle to maintain power. He reported to Florence
that Cesare's position was weak, and that Florence should not
support him. By this time Cesare's political situation
was so hopeless that he was obliged to trust the
promises of Giuliano della Rovere, soon to be Pope
Julius II, a man whom he and Alexander had severely
offended, a man who had every reason to be his mortal enemy.
The outcome was not surprising: in spite of his enemies'
promises, Cesare wound up in prison, was forced to give up
control of his troops and fortresses in Romagna, and was exiled
to Spain. He was never again a factor in European politics.
Pope Julius would go on to play a major role in the politics of
the time, but he is best remembered as the sponsor of
Michelangelo, who decorated the ceiling of Sixtine Chapel for
him.

Chapter VII of Il Principe is devoted to Cesare's rise and fall,

and to the lessons to be learned from it. They are summarized
in sections 12 and 13 of the chapter:

There was in the Duke so much fierce valor and

virtue, and he knew so well how men should be

15
won or abandoned, ... that, if foreign armies had
not been menacing him closely, or if he had
been healthy, he won have sustained all
difficulties. He told me himself, on the day that
Julius II was elected, that he had thought of
everything that could happen when his father
died, and had found a solution to all problems ,
except that he had never thought that he
himself could be gravely ill when his father died.
So I, having observed all the actions of the
Duke, would not reproach him; rather I would
propose him as an example to follow for all
those who have climbed to power using fortune
and the strength of other s. ... The only
opposition to his plans was the short length of
Alexander's reign, and his own illness .
Therefore whoever believes it necessary,
when coming into new power, to insure against
enemies; to gain friends; to win by force or by
fraud; to make oneself loved and feared by the
people, obeyed and respected by the soldiers; to
eliminate those that can and must harm you; to
innovate old ways of doing things by
introducing new ways; to be strict and fair ,
magnanimous and generous; to eliminate
unfaithful troops; to raise new troops; to keep
the friendship of Kings and Princes, so that they
will either courteously help you or be cautious

16
 when offending you; whoever believes this, I
say, cannot find better examples than the
actions of Cesare Borgia.
We can only reproach him regarding the
election of Julius II ... because he should never
have consented in the election of a man whom
he had offended, and who feared him. ... For
whoever believes that amongst powerful people
new favours will lead to forgetting old insults is
deluding himself. Thus in this election the Duke
make a mistake, and it was the cause of his
ultimate ruin2.
Ten years after the dramatic events in Rome, in 1513,
Machiavelli finished writing up the observations he had made
as a diplomat, and presented the finished work to the man who
had gained absolute power in Florence, Lorenzo dei Medici, a
descendant of that Lorenzo justly known as Il Magnifico.
Although Renaissance Florence was theoretically a republic,
actual power shifted between the signoria and the Medici
family. The signoria were chiefly businessmen who had
anointed themselves as aristocrats. Since Machiavelli had been
a civil servant under the signoria, he was suspect to the Medici.
he hoped that his treatise, Il Principe, would gain him the
favour of Lorenzo. Here are the words that he used to present
his work to the new ruler:

2 A very readable and accurate account of the rise and fall of the Borgias
(including the life of Cesare's sister, the unjustly maligned Lucrezia Borgia) is
given by Michael Mallet in The Borgias (Granada, 1981).

17
 Those who wish to acquire the favour of a
prince very often present to him those things
which they hold dearest, or those things of
which they see the prince to be fond; hence one
often sees presents of horses, arms, cloth of
gold, jewels and other ornaments worthy of the
ruler's greatness.
Since I wish to offer myself to Your
Magnificence with some proof of my fealty to
you, I have not found amongst my possessions
anything else that I hold dearer or mor e
valuable than my knowledge of the actions of
great men. This knowledge I have acquired
through long experience of modern events and
continuous study of ancient history. Having
with great diligence, and at length, thought
about and examined these facts, I have now
reduced them into a small volume, which I offer
to Your Magnificence.
And I hope that there can be no greater gift,
than to give you the ability to learn in a very
short time everything that I have seen and
understood, during so many years, through so
many uncomfortable and dangerous
experiences.

The treatise did not restore Machiavelli to Florentine civil

service, but it did bring him everlasting fame.

18
 The modern business manager should benefit from his
wisdom, which was indeed based on vast experience, acquired
during the many years when he was Florence's ambassador (or
more precisely observer, a non-speaking member of the
embassy, a spy we might say today), visiting the courts of Italy
and of Europe, including those of King Louis XII of France and
of the Holy Roman Emperor Maximilian.
The extreme cynicism of Il Principe, especially the conviction
that people are fundamentally selfish, should be understood as
a consequence of the objective scientific spirit with which
Machiavelli approaches his topic. This cold, impartial, almost
inhuman objectivity, which considers events on their own
merits, independently of most moral, ethical or religious
conventions, divorced from wishes for the way things should
be, rather than they way they are, was revolutionary for the
time, and has been often misunderstood through the ages.
Machiavelli never said that the end justifies the means, or
anything similar; that was a misinterpretation by English critics
of the Victorian period. The end justifies the means is a moral
judgement, and Machiavelli does not make moral judgements in
Il Principe. Here Machiavelli is an observer of reality, who
reports on what he sees, like a modern scientist. If we have to
reduce Machiavelli's observations to one sentence, then we
might say that he saw that the end requires the means.
Machiavelli cannot be accused of being unethical or
immoral. He observed the behavior of those who gain and hold
power, and reported on it. His conclusion, based on

19
observation, is that successful rulers acting in the best interests
of their states might need to violate commonly accepted
canons of behavior for individuals. He would certainly extend
that conclusion from leaders of states to leaders (as opposed to
mere administrators) of all large organizations.
Machiavelli would certainly not have condoned the reckless
behavior of those businessman who believe that they are
above the law. Such behavior can only lead to ruin, for it is
nothing less than offending someone (society as a whole)
whose vengeance you have every reason to fear. And, as
Machiavelli wrote in Il Principe: "If you offend someone, do it
in such a way that you need not fear his revenge" . In another
book, he gave a more direct warning: "Both people and princes
err when they are not controlled by laws."3
Proper understanding and application of Machiavelli's
maxims in the business world would result in less illegal and
socially destructive behavior, and would have helped the
arbitrage and junk-bond kings of Wall Street to avoid over-
reaching themselves, and plunging to ruin.

III. Machiavelli's Advice as Presented in This Book

In order to facilitate the application of Machiavelli's
observations to today's business world, I have freely substituted

3 From Discourses on Titus Livius, Book I, Chapter 38. In Book III, Chapter 5,
he wrote: "[Princes] begin to lose their states at that hour when they begin to
break the laws and those customs and usages... under which men have lived for a
long time."

20
business-related words for words related to the politics of
Renaissance states. Thus I have chosen the colloquial term boss
to express what Machiavelli expressed as principe. Even in
terms of the politics of states, Machiavelli's term expresses a
somewhat different concept than the English prince. As
explained above, Machiavelli's term can apply to a strong leader
who is not a prince in the aristocratic sense. It can apply to a
weak leader who inherits power as well as to a person who
attains power thanks to some fortuitous circumstances.
The terms manager or leader could convey the same
meaning as principe. I prefer boss because, as noted before,
my emphasis is on those managers who are also leaders. Some
other consistent substitutions of terms are organization for
state, employees for the citizenry of a state, and so forth.
With few exceptions, I have avoided consistent use of "his
or her" and "he or she" in place of his or he, in order to avoid
lengthening the text. The reader is encouraged to keep in mind
that his and he apply equally to managers who are female.
In Machiavelli's text, each enunciation of a maxim is
followed by one or more historical examples. Since these
examples are not directly related to modern business, I have
replaced them. The replacement consists of examples drawn
from my experience of modern business, of case reports from
various sources, and of observations and questions intended to
encourage the reader to supply examples based on his or her
personal experience. I hope that thinking of examples will help
you to apply Machiavelli's wisdom to your experience.

21
 Each of the following chapters contains a loose translation
of Machiavelli's text, indented and set in italic type. The
excerpt is ended by a parenthesized reference to the original
chapter and section in Il Principe. My comments and questions
are in regular type. Examples, including case reports, are
indented and set in helvetic type.
I hope you will have as much fun pondering what follows as
I have had in putting it together.

22
 The Boss
Machiavelli on Managerial Leadership

23
 1. Seeking and Holding Po wer

People change boss willingly, in the belief that

the new one will be better. But in this they
deceive themselves, because later with
experience they see that they are worse off.
(III-1)
If you are still on the way up, how often have you wished
that top management would replace "the incompetent" who is
your boss? (In a recent survey of middle managers, a business
magazine found that only 38% were favorable toward the
ability of top management.3) But how often is your new boss
worse than the old one?
In a sales organization where I once worked, the
sales manager - I'll call him "Hale" - was
easygoing and undisciplined. Morale was
lukewarm, and everyone believed that mediocre
sales resulted from Hale's loose control. Higher
management shared our view and replaced Hale
with "Queeg," a high-flyer with an accounting
background and a reputation for running a
tight ship.
After the honeymoon, morale plummeted
below its previous low point, and sales did not
improve. Everyone realized that Hale's style had
not been the problem and that a change to
Queeg's style was not the solution. The problem

24
 turned out to be that the target market
demanded products and services which could
not be easily provided by our sales organization,
because of the overall structure and objectives
of the corporation to which we belonged.
Fortunately top management began to make
the necessary changes before our organization
went under. There upon we all resolved to quit
making a scapegoat of our boss. Instead, we
adapted our behavior to Queeg's style so that
he relaxed and behaved more like Hale.
As Machiavelli says:
When you acquire authority over a department
whose functions, culture, or organization ar e
dissimilar from those of the departments you
already manage, you will need great luck and
hard work in order to assert your authority. One
of the best techniques is for you to involve
yourself personally in managing the new
department.
Because, if you manage personally, you will
see problems as they arise, and can correct
them at once; if you are not personally involved,
you will learn of problems only when they are

4 Fortune, 18 November 1991, survey of 750'000 middle managers by Hay

Research for Management. The percentage approving their superiors' ability

had declined from 54% in 1985-1987.

25
 serious, and can no longer be corrected. In
addition, if you manage personally, the new
department will not be neglected or raided by
your subordinates. (III-4)
Have you noticed how often a trusted employee of
"Company A" has the good luck to become "acting" manager
when his or her firm takes over "Company B"? Luck may give
you the opportunity to expand your power, but only personal
involvement will hold your new domain.
I have experienced several mergers and
acquisitions. In every case, trusted employees
of the acquiring company were given authority
over key functions of the acquired company.
But I know of a case in book publishing where a
new acting manager failed to consolidate his
position. Prosperous Company A took over poor
but clever Company B. A junior executive of
Company A was made acting manager of
Company B's innovative textbook division.
Instead of becoming personally involved, the
Company A man spent a month visiting
glamorous yet unimportant overseas markets ,
leaving the old Company B manager in charge.
When the globe-trotter returned, he found that
top management had given his position to the
former subordinate from the downtrodden
Company B.

26
 Another good solution is to colonize the new
organization. (III-5)
Did you ever notice how often new managers replace old
department heads with new department heads that have
previously worked with them? These bosses are "colonizing"
their new organizations. A new boss doesn't necessarily choose
his top subordinates from his old shop. He chooses "up-and-
coming" types who share his latest thinking about their kind of
enterprise.
A spectacular example occurred in one
organization that I once worked for. A newly
appointed top manager immediately replaced
all five department heads reporting to him. His
five appointees came from throughout the
industry and had shown their harmony with his
thinking, expressed in articles and professional
meetings. The new managerial team "colonized"
the organization, planting and cultivating the
boss's ideas .
Machiavelli again:
Here we must notice that people must be either
indulged or eliminated, because they will take
revenge for small offenses, but cannot for serious
ones. So if you offend someone, do it in such a
way that you do not fear his revenge. (III-5)
Undoubtedly, you have seen a new manager accept
objectionable behavior from an "inherited" subordinate. Why

27
does a boss do so? Very likely the boss is indulging a crusty old
veteran because replacement would be inconvenient while
antagonism would be costly.
I saw a newly appointed first-line supervisor put
up with extremely hostile behavior from the
long-term department secretary, because he
needed to rely on her inside information until he
became familiar with his new domain.
Did you ever see a boss's projects being sabotaged by someone
that he or she has offended, perhaps unknowingly, in the dim
past? If you are a new boss and feel sure that one of your
subordinates holds a grudge against you, then firing that
subordinate is your best option. If that is not feasible, you should
try to arrange a "lateral promotion" so that the subordinate can
no longer take revenge by obstructing your projects.
In one case that I observed, "Heep" accepted his
new boss, "Copperfield," as better qualified to
be department manager, but could not forgive
him for a defeat in tennis eleven years before.
For reasons of corporate politics, Copperfield
could not fire Heep. But suddenly another
department had an urgent need for a "Special
Projects Manager"; top management spotted
Heep as the obvious candidate for this job. A
company wag said that he saw Copperfield's
"fine Italian hand" (Machiavellian?) in the
convenient "lateral promotion."

28
 Machiavelli again:
He who has authority over a non-homogeneous
organization must become leader and protector
of the less powerful neighbors, and find ways to
weaken the powerful leaders of the
organization, and watch out that no outsider as
powerful as himself acquires authority in the
organization by some chance event.
Because it happens that, as soon as a
powerful outsider acquires authority, all the less
powerful members of the organization join the
outsider, pushed by the jealousy that they have
against whoever had power over them. (III-6)
Did you ever observe a department paralyzed when the
weaker employees back a newly arrived manager from outside,
venting their envy of a tried-and-true leader?
In one high-technology company, I saw the
drudges welcome the hotshot from outside - I'll
call him "Flashman" - out of jealousy towar d
tried-and-true "Rockford." The two were
assistant chief engineer s, with equally
important responsibilities. Work was severely
hindered by the drudges' favoritism towar d
Flashman. The chief engineer could not stop the
spitefulness, so Rockford quit, depriving the
company of a potential top manager. Flashman
also quit later on. Like many competent middle

29
 managers, Rockford was unskilled in
organizational politics and was thus vulnerable
to the threat from Flashman's magnetism.
Companies would benefit by teaching their
"Rockfords" how to protect themselves from
their "Flashmans."
This behavior can be particularly insidious for certain types
of "matrix-management" organizations. In my experience,
matrix-management works well when the lines of authority
are clearly separate and synergy is created. For example, a
project to develop a high-technology product, in which the
project manager exercises overall control, while specialist
department heads (aerodynamics, materials, fabrication, etc.)
supervise only for their specialty the engineers assigned to the
project. The project benefits from the combined wisdom of all
concerned managers. Matrix management works poorly when
lines of authority overlap and appear to be politically
motivated, for example dual reporting to regional and
headquarters managers who have the same functional
specialization and work hard to impose their views only so that
they can assert their own personal power.
We can say of managing a difficult situation
what physicians say of disease: in the early
stages it is easy to cure and hard to recognize,
while, with time, if it hasn't been found and
treated, it becomes easy to recognize and har d
to cure. (III-8)

30
 How many times have you seen a situation degenerate until
top management finally became aware of the problem and was
forced to take drastic action? How often could the problem
have been fixed more easily if action had been taken sooner?
In another high-tech company's r esearch
department that I observed, the problem was not
the quality of the work but simply the
department's inability to generate timely r eports.
The situation degenerated until top management
found the reporting delays unacceptable. At that
point, drastic action was taken: writers and
supervisors were hired; information processing
equipment was doubled. In retrospect, it can be
seen that a minor investment in training and
equipment - made a few years earlier - would
have avoided the problem.
As Machiavelli puts it:
The following general rule is never or rarely
wrong: whoever is the reason for someone else
attaining power will come to ruin; because that
power was given either through cleverness or
through brute force, and both of these are
suspect to whoever has become powerful.
(III-14).
Did you ever see a newly promoted manager proceed to put
aside precisely those people who helped him to achieve the
new rank?

31
 In a corporate reorganization that I observed, a
matrix-managed structure was realigned so
that central control was stronger. The new top
manager who emerged was the magisterial
"Lyon," although the change had been
engineered by the wily "Fox" in collaboration
with the forceful "Baer." One of Lyon's first
moves was to force Fox and Baer to leave. (In a
study of a technology-based manufacturing
firm, a Harvard Business School team found
that the power gained by someone promoting
change "stems in large measure from the
multiple sources of authority attached to his
position in the structure. " 5) Neither cleverness
nor forcefulness alone is enough.

5 Gene W. Dalton, Louis B. Barnes, and Abraham Zaleznik, The Distribution

of Power in Formal Organization (Division of Research, Harvard Business

School, 1968).

32
 2. Taking Charge of Centralized and
Decentralized Organizations:
A Study in Contrasts

If you think about centralized and decentralized

organizations, you will find that centralized
organizations are difficult to take over, but,
once taken over, easy to manage. On the
contrary, decentralized organizations are in
some ways easier to take over, but mor e
difficult to manage after they are taken over.
(IV-2)
Did you ever try to assert authority over a highly centralized
department? Did your formal grant of authority by top
management put you in control? Or did you need to overcome
resistance?
In my own career as a manager, I once took
charge of a highly centralized department. The
departing department head (nicknamed "Mr.
Efficiency") ran a tight ship, with no errors in
operations and with a loyal crew. I saw that his
weakness was in navigation: in the direction he
was leading the department. Mr. Efficiency
emphasized speed and cost-reduction while
overlooking customer-satisfaction. My task was
to convince department members of Mr.
Efficiency's shortcomings. Doing so took all my

33
 skill at persuasion. Once I had done so, however ,
my new subordinates accepted my leadership
unquestioningly (and Mr. Efficiency's early
retirement helped). An innovative manager
gains support "in proportion to his power and
the relevance of his power to the objectives of
the organization" 6).
Compare my experience with your own. Did you ever take
over a highly centralized department? Does Machiavelli
describe the process accurately? Now consider the reverse
situation: a highly decentralized department.
In a contrasting case that I observed, a new
manager took over a department that was
highly decentralized geographically, with a
strong matrix management organization in
local branches. The new manager ("Steerforth")
wanted to impose more centralized functional
control and more uniformity in procedures.
Although Steerforth at first had no trouble in
asserting his authority, he needed more than
five years to put his reorganization into effect.
He had to convince the geographically dispersed
department members that his reorganization
was relevant to the corporation's goals .

6 Gene W. Dalton, Louis B. Barnes, and Abraham Zaleznik, The Distribution

of Power in Formal Organization (Division of Research, Harvard Business

School, 1968).

34
Observing a similar case, Dalton et al. quote
Michael Crozier: "Resistance to changes occur s
when the effect of change is to alter the
balance of power within the organization
without offsetting compensations." As a
promoter of change, Steerforth had to sell his
subordinates on the payoffs from his
reorganization. Doing so took time and effort.

35
 3. How to Take Charge of Departments
Accustomed to Being Run in Their Own Par ticul ar
Way s

Should you acquire authority over departments

that have been used to their own rules and
independence, you have three ways to manage
them: 1) destroy them; 2) manage them
personally; 3) let them continue to operate
under their own rules, establishing inside the
department a few people who will keep it
friendly to you. Because these few people will
have been promoted by you, the boss, they will
know that they will not survive without your
protection, and they will do everything to keep
it. (V-1)
Did you ever watch other managers fail miserably when
they tried to impose new operating rules on a department that
had been independent for a long time? Did they take one of
the above three approaches?
In one case that I observed in the recorded
music business, a marketing manager ,
"Wiseman," was given authority over the
customer service department. Formerly this
department had, quite irrationally, reported in a
loose way to the controller. The department
was headed by "Spalding," a favorite golf

36
partner of the Chief Executive Officer - and also
of the largest customers. Spalding's department
was cost-efficient and smoothly run.
Unfortunately, however, customer service
sometimes failed to digest and transmit
accurate marketing information about recor d
content or playing schedules.
Wiseman wisely rejected the option of
"destroying" customer service (Machiavelli's
technique number 1) by merging it with
marketing, since he wanted to avoid
unnecessarily offending important customer s
and the Chief Executive Officer. Instead, his
solution was to give Spalding two new
assistants: "Copland," a near-genius with
music, and "Ricky," a fanatic on schedules - this
is Machiavelli's technique number 3.
Why, the reader may ask, did not Wiseman
confront Spalding about correcting his
department's deficiency (Machiavelli's
technique number 2)? Obviously he sensed
that Spalding's ambition was not str ong
enough to motivate change in his ways.
Human ambition (or motivation to achieve)
varies consider ably, as experimental
psychologists have shown . 7

37
 As Machiavelli says:
But, in truth, there is no sure way to manage a
previously independent department except to
destroy it. And if you become the boss of a
department used to its independence, and you
do not thoroughly reorganize it, you can expect
to fail to assert your authority .
Because anyone who does not wish to obey
orders will always invoke independence and the
old ways of doing things, which are never
forgotten. And no matter what you do, if you
do not reorganize or replace the employees, they
will never forget the old ways of doing things,
and will always invoke them whenever there ar e
problems. (V-3)
How often do marketplace changes induced by
technological process force significant internal change? The
latest buzzword for these phenomena appears to be "corporate
re-engineering": the concept of redefining internal operating
procedures in order to better meet customer requirements
through the application of new technologies.
How often has it been necessary to completely reorganize a
previously independent department in order to assure that it
complies with some new organization or some new operating
rules? Have you seen such cases?

7 See for example Achievement Motivation in Perspective (Academic Press,

1985) by Heinz Heckhausen of Germany's Max Planck Institute.

38
In the previous example, Wiseman succeeded in
exerting managerial control over a formerly
quasi-independent department because
Spalding's ambition was limited. Hence
Wiseman was able to "colonize" the customer
service department with his people (Copland
and Ricky). The situation would have been very
different if Spalding had retired and been
replaced by a highly-ambitious Ricky, supported
by Copland.
Such a situation occurred in my experience. In
that case, a changing business environment
forced the company to reorganize to become
"leaner and meaner," despite the ambitions of
department heads. The Chief Executive Officer
was forced to be tough. Subordinate
department managers were continually
obstructing the new approach, which involved
more central control. They claimed that only
the old approach was valid, and that anyway
they only worked well when they were
independent, and not subject to central control.
Eventually, top management prevailed, but only
after several years of bitter corporate in-fighting,
which resulted in the more-or-less forced
departure of several old-time middle managers.

39
 4. On Acquiring New Authority Through One's
Own Skill - Plus Luck

If we look at the lives and actions of great

leaders, we see that they had nothing more fr om
fortune than a chance to assert their leader ship;
... without luck their skills would have been
wasted, and without their skills the chance
would have been wasted. (VI-3)
Did you ever notice how neither luck nor ability alone is
enough for success? How many managers can you think of
who know how to use their skills to turn a bit of luck into a
major success?
Most of my own business acquaintances will
freely tell you about the lucky set of
circumstances that got them started on their
successful career s. And I know a couple of
failures who had a break but not the skill to
exploit it.
Cases abound of entrepreneurs who had the
good luck to encounter timely inventions or
marketing techniques, on which they built
industrial enterprises such as General Electric,
RCA, or McDonald's. But cases also abound of
failures like those of Studebaker Automobiles or
Eastern Airlines. Shakespeare expressed
Machiavelli's observation in poetic terms:

40
"... Best are those
Whose blood and judgement are so well commingled
That they are not a pipe for fortune's finger
To sound what stop she pleases
Those who have become bosses through their
own skill, acquiring authority with difficulty,
retain authority easily: indeed, the difficulties
that they have to acquire authority come in part
from new ideas and methods that they ar e
obliged to introduce in order to attain authority.
One must consider that there is nothing mor e
difficult to manage, nor more uncertain of
success, nor more dangerous to handle, than to
become a leader and to introduce a new way of
doing things.
Because the innovator has as enemies all those
who benefit from the old ways, and is only
weakly supported by those who would gain
from the new ways.
This weakness comes in part from fear of the
enemies, who have the old their side, in part
from the incredulity of people, who do not really
believe in new things, unless they are the fruit
of a real experience. (VI-5)
But to discuss this subject in depth, it is
necessary to see if the innovators ar e
independent, or if they depend on others; that

41
 is, if in order to accomplish their work they need
to ask, or if they can assert authority .
If they need to ask, they will always come to
no good, and never accomplish anything; but
when they are independent and can assert
authority, then it is rare that they will fail.
Because people are inconsistent, and it is
easy to convince them of something, but
difficult to hold them to that conviction. Hence
it is best to be organized so that when they no
longer believe, they can be forced to believe.
(VI-6)
How many innovations have had to be pushed through, in
the end, by brute force, in spite of extensive persuasion
beforehand?
Note that Machiavelli does not state that asserting
authority is enough. Innovation will also fail if it is imposed
from above without first building a consensus. What
Machiavelli says is that both consensus-building and assertion
of authority are necessary in most cases.

Personally, I have never seen any significant

change happen without both extensive
consensus-building and assertion of authority .
The consensus-building prepares people to
accept the imposition of authority. But they
won't change the way they work unless they ar e

42
 forced to. A recent study of chief executives
indicates that the overwhelming majority favor
participative management, an essential
condition for consensus-building. But it also
8

shows that CEOs are people of strong

convictions. Above all, top management's
authority depends on a record of success. In the
words of Abraham Zaleznik, a psychologist at
the Harvard Business School: "... hierarchical
authority must prove its effectiveness of it to
retain itself." 9

8 See David L. Kutz et al., CEO: Who Gets to the Top in America (Michigan
State University, 1989).
9 In Gene W. Dalton, Louis B. Barnes, and Abraham Zaleznik, The

Distribution of Power in Formal Organization (Division of Research, Harvard

43
5. On Acquiring New Authority Through the Skills
of Others - Plus Luck

Those who solely by fortune become bosses ,

become so with little effort, but remain so with
considerable effort. They have no difficulty
along the way, because they fly along it: but all
the difficulties start once they arrive. (VII-1)
Did you ever observe someone grimly hanging on to a job at
all costs, because he or she was incapable of getting any other
job at the same level?
Over the years, I have seen three or four cases
like that. Mediocrities became middle manager s
because of family or old-school ties to the big
boss. But the wheel of fortune kept turning,
bringing difficult challenges. The unfortunate
individuals in those positions wound up
spending all their time and energy on preserving
their job security, and no time on actually
getting the job done. In the end, every one was
fired, or moved to a "Special Projects Manager"
position.
As Machiavelli put it:
Such people depend on the goodwill and fate of
whoever promoted them, and these are two very
volatile and unstable things. They do not know
how to be and cannot remain bosses. They don't

44
 know because, unless they are individuals of
great intelligence and skill, it is not reasonable
that, never having exercised power, they should
know how to lead. They cannot remain bosses
because they have no friends and allies in the
organization. ... Thus the first adversity destroys
them. (VII-2)

Can the reader recall some brilliant star (perhaps an MBA

from a "prestige" school) propelled into a top spot, with
disappointing results?
I know several such cases. In one instance, a
systems analyst with no previous supervisory
experience was placed in a high-level
management job (managing managers). After
much personal frustration, the individual asked
for, and obtained, a lower-level job (supervising
clerical workers). He was lucky, because his
sponsor was still in power. Otherwise, he might
have been treated less well.
As Machiavelli says:
Whoever thinks that recent favours will make
powerful people forget old insults is fooling
himself. (VII-14)
Did you ever wonder why somebody was put aside in spite
of good recent results?

45
In one case that I know of, an individual had
very successfully completed a difficult
assignment, turning an operation around
completely from failure to success. He was the
obvious candidate for a higher-level job that
had just become available. He was refused the
promotion because, years earlier, he had
offended a very senior manager: at a staff
meeting, he had expressed doubt about the
technical know-how of this influential manager .

46
 6. On Those Who Become Bosses Through
Evil Actions - Compared with
Necess ary Toug hnes s

But, because one can become a boss also

through evil ways, two examples will be shown,
without discussing the merits of this approach.
(VIII-1)

Machiavelli gives two case histories. In one instance, a

Renaissance princeling gained control of a city-state by
trickery and cruelty. But he was in turn tricked and killed by
citizens who considered his cruelty excessive. In the other
case, in ancient times, a prince gained and held power through
cruelty. Although Machiavelli considers the second ruler's
cruelty excessive (not deserving "glory"), he is forced to
conclude that this prince used his cruelty effectively. Thus, as
the present book's introduction makes clear, Machiavelli is by
no means a cynic who condones evil. Rather, he is a realist who
recognizes that some cruelty - we moderns would say
"toughness" - may be necessary behavior for bosses. Can you
think of anyone who has moved up in the world through
trickery or excessive toughness?
Daily news reports are filled with cases of
individuals who have built successful careers on
trickery and excessive toughness. Innocent

47
people are constantly tricked out of their
creations (inventions and ideas) and their
possessions (ranging from small nesteggs to
everything they own). And people are
constantly subjected to unnecessary toughness:
unwarranted foreclosures, called loans, layoffs ,
plant-closings, and so forth. Perpetrators of
trickery and excessive toughness may or may
not prosper - may end up on Park Avenue or in
the penitentiary (or both successively) - though
none would deserve glory in Machiavaelli's
book. On the other hand, necessary toughness
is another matter.
Here is what Machiavelli says:
When a boss takes over an organization, he
should calculate what injuries he must do. Then
injuries must be administered all at once, so
that, being less visible, they will offend less .
And favours must be done little by little, so that
they will be more visible.
And, above all, the boss must not be forced to
act by any favorable or unfavorable accident:
because, if unfavorable circumstances force an
action, you will be too late; and any good that
you do will not help you, because it will be held
to be forced on you, and your efforts will not be
appreciated. (VIII-8)

48
 Here are some questions to ponder. When companies are
obliged to lay people off, is it better to lay off many people all
at once, or a few at a time? Is reacting to emergencies an
effective form of management? Do employees appreciate
actions, favorable or unfavorable, taken by management as
reactions to emergencies?
Many years ago, an organization that I worked
for acquired another company. At first
management over-optimistically thought that
all employees could be absorbed. Then
circumstances forced some to be laid off. Then
some more had to be let go. At the end, the few
who were left - the hard-core of talent from the
acquired firm - were totally fed up with the
acquiring company and found jobs elsewhere.
They would have stayed if the acquiring
management had taken consistent tough action
from the beginning, rather than being forced to
react to circumstances .

49
 7. On Being a Boss in Oligarchic or Democratic
Org ani zati ons

To become boss thanks to the favour of one's

colleagues one needs either the favour of all the
people or the favour of the leaders (and to
succeed it is not necessary to have either great
skills or great luck, but rather astuteness aided
by luck). (IX-1)
Machiavelli has a bias towards democracy, as noted in the
Introduction, but is not sentimental about it. He recognizes
two obstacles to democracy. For one thing, democracy requires
informed voters, who are not always present. For another
thing, historical circumstances often put democracy beyond
human imagination. When democracy is not possible, people
must make the best of oligarchy. Most modern business
organizations are oligarchies because they cannot overcome
the two obstacles to democracy cited by Machiavelli - in the
opinion of their boards of directors.
Can the reader think of exceptions - or of prospects for
change? Machiavelli here, as in Chapters 1, 4, and 5, shows his
political realism. His formula for political success is luck plus
astuteness. The successful boss doesn't necessarily have the
greatest know-how or the greatest luck, but rather the right
mix. Can the reader this of examples?
The authority of a boss stems either from the
power of all employees or from that of the

50
 managers. ... Leaders appoint one of themselves
boss, so that they can satisfy their appetites
under his shadow. He who becomes boss with
the help of other managers has greater difficulty
in managing than he who becomes boss with
the help of all employees; because he is a boss
surrounded by many who seem to be his equals,
and because of this he cannot command them
and manage them in his own way. (IX-2)
Does the reader believe there is a great deal of deference
among the top managers and within the board of directors or
do the top brass act as though they are all equals?
In my experience, top management is a club .
You enter the club because of your personality,
not your performance. As Roger Ailes, media
consultant to Ronald Reagan and other s, points
out, top management promotes people it likes.10
So top managers make sure they act in such a
way that they continue to be liked.
Good results are normally necessary for an employee to be
promoted. Above a certain level they are usually not sufficient.
Consequently, "clubmanship" takes over, because, above a

10 Roger Ailes, You are the Message: Getting What You Want by Being Who

You Are (Doubleday, 1988).

11 See Abraham Zaleznik, The Managerial Mystique: Restoring Leadership in
Business (Harper and Row, 1989) and W. Edwards Deming, Out of the Crisis (MIT,
1986). Deming holds that two-way communication between management and
workers is essential to both quality and quantity of output.

51
certain level, the behavior and results expected of a manager
are too complex to be easily measured. (But, according to
Harvard's Zaleznik, leadership behavior can be measured, and
so can managerial results, according to quality-guru Deming,
the American who advised Japanese industry during its post-
war recovery and now advises many US companies that
"Quality is Job Number One."11)
Since top-level managers cannot readily evaluate the results of
their immediate subordinates, they tend to evaluate them on their
personality and on behavior not directly related to results. As a
consequence, large organizations tend to evolve management
structures in which all managers think and behave in similar ways;
non-conformist thoughts or behavior are discouraged.
Perhaps this is a major reason for the decline of productivity
and competitiveness in the most developed countries, where
large organizations control the majority of the production
resources. Large organizations dominated by managers who all
think alike tend to have difficulty adapting to changes in the
external world: that is, they tend to adapt to market conditions
more slowly than smaller companies, where the management
structure is dynamic and subject to change.
A case in point is the US steel industry. The mammoth
corporations, whose executives were comfortably accustomed
to their smokestack technology, have had trouble competing in
world markets. Not so for many small companies whose bosses
immediately embraced electric furnaces and automation. Can
the reader think of similar cases?

52
 George Orwell's observations on conformism are frightening,
but correspond well with my own experiences. As you read the
following excerpts from Nineteen Eighty-four, mentally replace
Orwell's "the Party" with "the Corporation's top management."
"... The essence of oligarchical rule is not father-to-son
inheritance, but the persistence of a certain world-view and a
certain way of life ... A ruling group is a ruling group so long as
it can nominate its successors. The Party is not concerned with
perpetuating its blood but with perpetuating itself. Who
wields power is not important, provided that the hierarchical
structure remains always the same ... What opinions the masses
hold, or do not hold, is looked on as a matter of indifference.
In a Party member, on the other hand, not even the smallest
deviation of opinion on the most unimportant subject can be
tolerated. ... On the other hand, his actions are not regulated by
law or by any clearly formulated code of behavior. ... A Party
member is required to have not only the right opinions, but the
right instincts. Many of the beliefs and attitudes demanded of
him are never plainly stated, and could not be stated without
laying bare the contradiction [in the system]. ... [His
characteristics] include the power of not grasping analogies, of
failing to perceive logical errors, of misunderstanding the
simplest arguments if they are inimical to [the system], and of
being bored or repelled by any train of thought which is
capable of leading in a heretical direction.
"... Doublethink means the power of holding two
contradictory beliefs in one's mind simultaneously, and

53
accepting both of them. ... The essential act of the Party is to
use conscious deception while retaining the firmness of
purpose that goes with complete honesty. To tell deliberate
lies while genuinely believing in them, to forget any fact that
has become inconvenient, and then, when it becomes
necessary again, to draw it back from oblivion for just so long
as it is needed, to deny the existence of objective reality and all
the while to take account of the reality which one denied - all
this is indispensably necessary. ... For the secret of rulership is
to combine a belief in one's own infallibility with the power to
learn from past mistakes. ... For it is only by reconciling
contradictions that power can be retained indefinitely.
"... What was required in a Party member was an outlook
similar to that of the ancient Hebrew who knew, without
knowing much else, that all nations other than his own
worshipped `false gods.' ... The Party member knew what
constituted right conduct, and in exceedingly vague,
generalized terms he knew what kinds of departure from it
were possible.
"... Only the disciplined mind can see reality. You believe
that reality is something objective, external, existing in its own
right. ... But I tell you that reality is not external. Reality exists
in the human mind and nowhere else. Not in the individual
mind, which can make mistakes, and in any case soon perishes;
only in the mind of the Party, which is collective and immortal.
Whatever the Party holds to be truth is truth. It is impossible
to see reality except by looking through the eyes of the Party."

54
I will never forget the day a top manager - let's
call him "Volpone" - told me: "You are out of
touch with reality," after I had tried to explain
to him, figures in hand, that Project X,
supposedly a cost-savings measure, was
actually going to waste money. Never mind
that all the other technically knowledgeable
middle-managers shared my views. What
counted was that there were strong non-
economic organizational reasons to pursue
Project X, but Volpone had to provide an
economic justification. So, in his reality, which
was the reality of the corporation, Project X
would save costs. Volpone was a master at
corporate doublethink and I learned much from
him, albeit painfully.
What I learned was double-edged: on one
side, how to survive in that particular oligarchic
organization; on the other side, what is wrong
with a clubby oligarchy.
Machiavelli again:
A boss can never assure himself against the
hostility of all the employees, because they ar e
too many; he can assure himself against other
managers, because they are few. The worst a
boss can expect from the enmity of all the
employees is to be abandoned; but from

55
 managers who are enemies, he must fear not
just being abandoned, but also that they will
move against him; because, since managers ar e
more astute, and know more, they always have
time to protect their own interest, and to seek
favour with whomever they expect to win.
It is necessary for the boss to retain the
majority of the employees, but he can at any
time get rid of the other managers, and replace
them as he wishes. (IX-3)

In other words, the employees as a whole can only go on

strike or engage in slowdowns, whereas subordinate
management can conspire with higher management to replace
the boss. Strikes can be unpredictable and unavoidable
(although enlightened labor relations reduce their likelihood),
whereas an astute boss should be able to avoid conspiracies
among his subordinates. The boss cannot fire the entire
workforce, he can only fire his subordinates.
Can the reader think of cases where a boss has been
unseated by a conspiracy of his subordinates? Can you think of
cases where top management and the board of directors have
conspired to replace a chief executive?
I have never seen a manager demoted because
he was unpopular with his employees. Such
cases are rare. One occurred when a school
board sacked the superintendent after

56
concluding that he had provoked a needless
teachers' strike. More common is a
subordinate's cabal which can either reduce the
effectiveness of a hated superior, or result in
him being viewed in a bad light by upper
management. For instance, I heard of a hospital
food-service department where the manager
was fired when the assistant manager and the
dietician conspired with the head nurse to
convince top brass that the manager was
inattentive to patients' needs. A subsequent
investigation cleared the food-service manager-
but too late to help him..
As Machiavelli says:
And, to clarify this subject further, I will explain
how subordinate managers must be considered
in two ways. Either they act in such a way that
they become entirely dependent on your
fortune, or not: those that do, and are not
greedy, must be honored and loved.
Those who hold back, fall into two
categories. Some fail to commit themselves
because of cowardice and lack of spirit; then
you should make use of those that are experts
in some area, since they will honor you in
prosperity, and you need not fear them in
adversity. But, if they deliberately refrain from

57
 becoming loyal to you because of their own
ambition, it is a sign that they think more of
themselves than of you; and you, the boss, must
always watch such people, and fear them as if
they were open enemies, because, in adversity ,
they will always help to ruin you. (IX-4)
Has the reader has experience with any of the types of
subordinates that Machiavelli describes here? Have you been
one of those types?
In my own career, many years ago, I incurred the
displeasure of a superior because I made clear
that I was not dependent on him, and showed
that I was thinking more of my career than of
his.
Over the years, I have found that promotion
comes faster if you show that you completely
support your boss, and are dependent on him.
At the lower levels of management,
Machiavelli's other approach also works well:
you show that you are an expert in your field,
with no ambitions to move too high.
As Machiavelli put it:
Someone who becomes boss against the will of
the employees, but with the favour of other
managers, must above all other things win the
favour of the employees: this is easy if he
undertakes to protect them. Because people,

58
 when they are well treated by someone from
whom they expected injury, become even more
dependent on their benefactor than if they had
chosen him themselves. (IX-5)
Can you think of any manager who has been successful
without motivating the majority of his employees?
Machiavelli's maxim applies to the letter to
something that happened to me. I was
promoted to be head of a department by local
geographical management, against the wishes
of headquarters functional management (it was
a matrix-managed organization). Functional
management did its best to convince the local
employees that I would be a disaster as
manager. Once I took over, I improved their
working situation, so that they quickly became
totally loyal to me, going out of their way to
defend me against functional management at
headquarters.
Machiavelli again:
I will conclude by saying that it is necessary for
a boss to have all employees on his side,
otherwise he has no remedy to adversity. ... If a
boss has confidence in employees as a whole, is
able to lead and has guts, is not paralyzed by
adversity, is not deficient in planning, is able to
motivate by example and by leading, then he

59
 will never be deceived by his employees, and he
will see that he has laid a good foundation.
(IX-6)
Can you think of a manager that was bailed out of a tough
spot by an extra effort on the part of his department as a
whole? Can you think of a successful boss without this kind of
loyalty?
Most of us have experienced such loyalty on
both sides: as followers and as leader s. When
there is a "good foundation," as Machiavelli
says, children make extra efforts for parents ,
teams for coaches, soldiers for generals, and
employees for bosses.
Machiavelli again:
A boss leads either directly, or through his
subordinate manager s. In the second case his
power is weaker and less secure, because it
depends on the will of his subordinates, who,
especially during times of adversity, can remove
him from power, either by acting against him or
by not obeying him.
In an adversity, the boss does not have time
to assert his direct leadership, because the
employees, who are used to obeying the other
managers, are not, in the circumstances, ready
to obey him directly; so, during hard times, he
will always lack people whom he can trust. Such

60
 a boss cannot base himself on what he sees
when all is well and all employees need their
jobs, because all profess their loyalty when
adversity is hidden; but, when adversity is
present, when the organization needs its
employees, then one finds few to count on.
Therefore a wise boss must always think of a
way to make sure that all the employees, always
and in all circumstance, need him and their jobs
in the organization: then they will always be
faithful. (IX-7)
In most business organizations, managers cannot lead
directly, but must do so through subordinate managers. What
steps do effective managers take in order to assure the loyalty
of employees? How about mixing with employees, informal
discussions with employees, quality circles? Can you think of
companies that try to assure employee loyalty by higher-than-
average benefits or salaries or promises of job security or
opportunities for promotion? Are these measures effective?
One high-level manager I knew, and the one I
still respect most as a practitioner of
Machiavelli's maxims, had the unconventional
habit of getting deeply involved in all the hiring,
promotion, and salary-increase decisions of his
subordinate managers. Thus he broke one of the
textbook rules about delegation of authority.
Usually his involvement was so subtle that his

61
 subordinates were unaware of it. Mor eover,
most of his deputies knew that they owed their
jobs to him; as for the few who resisted, he
risked offending them, while being wary of
hostile conspiracies.
Since everyone in the department know who
made the real hiring and promotion decisions, all
departmental employees knew to whom they
really owed loyalty, so the high-level manager
knew that he could always trust all his people,
when the going was tough.
The classic way for a boss to exert leadership over all
followers, no matter how far-flung or subdivided is twofold:
results plus reminders. During World War II, Patton's men -
regardless of regiment or division - were constantly reminded
that they belonged to Patton's Third Army and that it got
results. At Ford Motor Company, when it still commanded 59%
of the US automobile market in the 1920s, the original Henry
Ford never let his thousands of employees forget that his
genius produced this result.12

12 The book GM Passes Ford by Arthur J. Kuhn (Penn State, 1986), shows

how Ford's market share dropped from 59% to 10% while GM's rose from 15%
to 40%. Ford's decline resulted from the founder's failure to obey two of
Machiavelli's precepts: early recognition of problems (Chapter 11) and
continual improvement to meet competition (Chapter 23). The present Ford
management has done much to regain the company's competitive edge.

62
 8. How to Rate the Ability of Bosses to Stay in
Power

We should examine whether a boss has enough

power so that he can maintain his position by
himself, or whether he always needs help from
others.
In the second case one can say nothing
except to counsel the boss to protect his
territory, and to ignore other departments. And
whoever has protected his territory well, and
has managed his department according to what
was said above and according to what will be
said below, will only be attacked with great
respect; because people are always inimical to
ventures that appear difficult, nor can it appear
easy to attack someone who has protected his
turf and is not hated by his employees. (X-1)
Here Machiavelli makes the point, often overlooked, that
your job security depends not merely on the strength of your
positions but also on the strength of your boss's position. If
your boss is the owner and is threatened by bankruptcy or a
hostile takeover, the point is obvious. But suppose your boss is
a corporate executive and has a weak position in the company.
I know of two cases where very capable employees suffered
from the bosses' vulnerability.

63
 One case was in a publishing company, wher e
several highly-skilled editors became "orphans"
when the head of their division was moved into
a meaningless staff job (a "special project").
This division head was a respected former
editor, but he had failed to protect his flanks, so
his division was absorbed little by little by mor e
aggressive divisions. Moreover, his editors had
failed to assist their boss in defending his turf.
In another case, in a plant that manu -
factured airframes, the head of the mold loft
(let's call him "Icarus") was terminated on the
ground that he had no future with the
corporation. Icarus was highly capable and
well-liked by his engineering staff, but he was a
loner who had failed to participate in corporate
activities, whether professional or social. Since
Icarus was clearly incapable of protecting his
position, his staff faced an unwelcome choice
when they saw him fall from favor: whether to
try to replace Icarus or to seek greener pastures
in a different company.
Can you think of an otherwise strong manager who has
failed to guard his turf? Conversely, can you think of a weak
manager who has built barriers around his department and
who protects his territory? Would it be easy to attack such a
manager?

64
 I have seen more examples than I can count. In
one spectacular case, even top management
was afraid to take on the manager in question.
Despite the fact that the department performed
an obscure technical function, its manager had
created such a mystique about it that no one
dared to take the risk of meddling with it. That
was so even though the department was
managed in such a way as to contribute as little
as possible to the company as a whole.
Machiavelli again:
A strong and courageous boss can sustain even
a determined attack against his territory, by
assuring his employees that the worst will not
last long, by creating fear for the cruelty of the
enemy, and by using skill to restrain those that
seem too audacious. ... The nature of people is
to feel as obligated for services which they give
as for services which they receive. (X-3)
Did you ever observe some remote operation come under
pressure from corporate headquarters to reduce expenses or
whatever? Did corporate headquarters win? Did local
management use any of the techniques mentioned above?
I know of a New York corporation in which the
Southeastern (Atlanta) sales office was closed
after top management questioned its value and
its staff fell apart, from the boss down to the file

65
clerk. By contrast, the staff of the West Coast
(San Francisco) sales office closed ranks when
threatened, and went on to prove its value. The
different outcomes reflected the different
leadership styles of the two regional sales
managers: that is, the bosses.
Dramatic examples occur during mer gers and
takeovers. I was deeply involved in one case
where my company (let's call it "Goliath Inc.")
was taking over a former competitor ("David
Inc."). In David we confronted a number of
strong department managers who threatened to
mobilize resistance against a smooth takeover.
Since we at Goliath recognized this threat early,
we moved energetically to convince the David
bosses and their subordinates that there were
promising jobs for them at Goliath and that they
would actually be better off with us. Our tactics
worked. Most of the David bosses tr ansferred
their loyalty to Goliath, while the few hold-outs
became isolated and resigned. At Goliath we
recognized Machiavelli's advice about bosses'
protective attitudes toward their turf, and used
it in our favor.

66
 9. On Bureaucracies

In bureaucracies one becomes a boss either

through skill or through luck, and maintains
power without either skill or luck; because
bureaucracies are governed by ancient ways of
doing things, which are so strong and of such a
nature, that bosses remain in power no matter
what they do and no matter how they act.
Only these people have authority that cannot
be taken away from them; employees that ar e
not managed; departments that, while not
managed, are not taken away from them; and
the employees, while they are not managed, do
not care, nor do they think, nor can they become
alienated from their bosses .
Therefore these are the only organizations
that enjoy security and happiness. (XI-1)
Machiavelli speaks of states governed by ecclesiastical
rulers, which I have translated as bureaucracies, since many
Roman Catholic bishops (and the Pope), during the
Renaissance, ruled as princes with bureaucratic organizations.
His reference to "happiness" is ironic, as in the old
schoolteacher's challenge: "Would you rather be a happy pig or
an unhappy Socrates?"
The reader might find some similarities to modern
bureaucracies, governmental or corporate.

67
To my knowledge few corporate bureaucracies
attain the sublime level of detachment from
reality and contempt for the public (including
customers) that Machiavelli speaks of (but
there are some that do). Consider the case of a
prominent mail-order house. For years it sold
an item called "Western riding boots." Then it
added an item by a well-known designer under
the heading "Weston riding boots." Many
customers who ordered the new item received
good old Western riding boots. When the sales
manager complained to the warehouse
manager, this corporate bureaucrat told him
that such an error was impossible because his
staff (pickers and packers) used stock number s
exclusively and paid no attention to item
names. When the sales manager asked the
bureaucrat how he knew that his staff relied on
stock numbers, he was told: "Because I gave
them written instructions to do so, and they all
initialled my memo - even the union shop
steward." The evidence of the mistaken
shipments did not count! In the mind of a true
bureaucrat, procedural reality outweighs
factual reality.
On the other hand, I know of many, many
governmental bureaucracies to which

68
Machiavelli's words apply. Consider the three
excuses of the civil servants of a particularly
ancient and well-entrenched European
bureaucracy. These are responses to a proposal
for a new way of doing something:
1) We always do it this way .
2) We have never done it that way.
3) If we did it that way, everyone would want it
(and we would be overwhelmed).

69
 10. On the Importance of Sales Peop le

We have said above, that a boss must have a

good foundation, otherwise he will of necessity
come to ruin.
The main foundations that all companies
must have are a good organization and good
sales people. And since there cannot be a good
organization where there are not good sales
people ... I will leave organization aside and
speak of sales. (XII-1)
Machiavelli speaks of laws and armies. I have translated this
as organization and sales people, since, just as armies are
essential for maintaining the integrity of a state, so are sales
people essential for ensuring the continued existence of a
company. If you are in business, does your company recognize
the importance of sales personnel? What other human factors
are essential to the continued existence of a business
organization?
By definition, a commercial company must sell
to survive. It is an axiom of capitalism that the
older the industry, the keener the competition.
Thus the importance of selling keeps growing as
the market grows. Occasionally a company
introduces a product with so spontaneous a

13 See GM Passes Ford: 1918-1938, by Arthur J. Kuhn (Penn State Press,

1986)

70
demand that the product almost sells itself.
Even in such situations, however, after the start-
up phase, selling becomes essential. (When I
speak of selling, I refer to the whole process of
marketing - from research to advertising - as
well as the vital role of sales people.)
Consider the case of Ford Motor Company
and the General Motors Corporation (GM) in the
early days of the automobile. From For d's
founding in 1903 until 1921, its market share
climbed to 59%, quite an achievement in
manufacturing. Ford's plain black Model T
provided cheap, dependable transportation and
practically sold itself. But, in the 1930s, GM
began to sell varied styles and colors, with the
result that its share rose to above 40% while
Ford's fell to about 15%. Neither initial
advantage or manufacturing know-how, both
possessed by Ford, could overcome the lack of a
good marketing and sales team. 13
No clever organization, no amount of
management science, no hordes of MBA's, can
overcome a lack of good sales and marketing. I
have seen competitors of companies that I
worked for fail, when they ignored this
fundamental fact of life.

71
 As Machiavelli puts it:
I say, therefore, that the sales team on whom a
boss relies for the continued existence of his
company is either his own or external distributors.
Distributors are useless and dangerous, and,
if your sales are based on external distributors,
your organization will never be stable nor
secure; because they are divided, ambitious,
undisciplined, unfaithful, courageous when
among friends, cowardly when confronted by
enemies ... when there is no competition you are
despoiled by them, when there is competition
you are despoiled by your competitors.
The reason is that distributors have no other
love, nor any other reason to be on your side,
than a little bit of money, which is not enough
to assure their loyalty. They like to be on your
side so long as there is no competition, but as
soon as things are difficult, they run away or
leave you. (XII-2)
Machiavelli speaks of mercenary armies, which I have
translated as distributors. Readers who have worked in
organizations that relied excessively on distributors for sales
might be able to see some similarities between what
Machiavelli says and modern business.
I have worked in a company where we had no
choice but to sell through distributor s. So long

72
 as we had the best product, they were beating
on our doors. When competitors arrived, they
started to demand bigger and bigger discounts;
they threatened to start distributing the
competitor's products; they forced us to do
work that they should have been doing; and so
forth.
As Machiavelli says, a little bit of money (in the
form of a distributor discount) does not buy
much loyalty, and it buys you no control.
The same maxim might also apply to any use of outside
consultants or outside service organizations for services that
are essential for the survival of the company.
But I have worked in an organization that was
very successful in subcontracting all work that
was not essential for survival. This organization
took to heart one of Peter Drucker's
recommendations, and focused its resources on
its mission. All ancillary functions wer e
subcontracted.

73
11. What a Boss Must Do: Six Rules for Success

The boss who does not recognize problems when

they arise is not really wise; but such wisdom is
given to few. (XIII-7)
I have known only one person who had that
wisdom, and he spent an inordinate amount of
time and energy in looking over the horizon for
problems that might come up.
In contrast, consider Sears-Roebuck, which has
fallen from its position as the world's number
one retailer. Because its top management was
slow to recognize the company's problems,
Sears was forced into a drastic reorganization in
1993. That reorganization included dropping
its century-old mail-order catalog, the world's
first. Sears' top management had failed to
recognize a two-fold change in consumer
preference: first, toward specialty mail-order
houses like L. L. Bean or Colonial Garden
Kitchen; second, toward quick-service drive-up
stores exemplified by K-Mart and Wal-Mart.
Can you think of other cases of blindness to
problems until the "eleventh hour"?
As Machiavelli says:
A boss therefore must have no other objective,
nor thought, nor learn any other skill, aside

74
 from the primary purpose of the organization
for which he is responsible, because this is the
only skill that is required of the leader .
This is so important, that not only does it
maintain bosses in power, but it often results in
ordinary employees becoming bosses; and on
the contrary one sees that, when bosses have
thought more about nonessential things than
about their primary purpose, they have lost
their jobs.
And the main reason for losing your job is to
neglect your primary purpose; and the main
reason for being promoted is to be an expert in
the primary purpose of your job. (XIV-1)
Machiavelli speaks of the necessity for the prince to be an
expert in the art of war, which, as he reiterates, is the activity
that is essential for the survival of a state. In order to facilitate
broader application of Machiavelli's observations, I have
translated "art of war" as primary "purpose of an organization."
Since selling is essential to a company's survival, it is often
regarded as its primary purpose, often rightly but sometimes
wrongly. Savings and loan associations, for example, went
astray when salesmen took precedence over loan officers. On
the other hand, the US automobile industry lost market share
to Japanese manufacturers by neglecting market research, a
sales function. A logician looking at business would describe
the role of selling as necessary but not sufficient. Within

75
companies, departments have different primary purposes. As a
consequence, the importance of individual skills varies
correspondingly. For example, real-time inventory control
requires mastery of real-time software. The impact of such a
control system on the purchasing, transportation, and
warehousing functions is obvious.
Can you think of anyone who was promoted because he or
she was an expert at a job considered essential to the
department? How about someone who was demoted because,
as a result of technological change or some other change in
circumstances, he or she no longer had a skill considered
essential?
I have never known anyone to be promoted from
rank-and-file employee to first-line supervisor
unless he or she was one of the most skilled
employees in the department, with regard to an
essential function.
And I have seen, more than once, department
managers lose their jobs when they have been
unable to maintain technical expertise in
rapidly evolving areas that were essential for
the operation of their department.
Machiavelli indulges in a bit of hyperbole when he implies
that only one essential skill is needed for success. Of course
other skills - for example basic management skills - are needed
to be successful. Some of these other skills have already been
mentioned, and others will be mentioned later in this book.

76
 There is no comparison between someone who
has expert skills and someone who does not;
and it is not reasonable that someone who is
knowledgeable should willingly obey someone
who is not, and that the ignorant should remain
safely surrounded by experts.
Furthermore, since the expert is full of
indignation, and the ignoramus full of
suspicion, it is not possible for them to work
well together. Therefore, a boss that does not
understand the work of his department cannot,
aside from all else, be respected by his
employees, nor have faith in them. (XIV-2)
Here Machiavelli contradicts the widespread modern notion
that a good manager can manage anything. Does Machiavelli's
observation match your experience? Did you ever know a
manager who failed because he understood nothing of the
work that his or her department was supposed to do? Did you
ever observe a good manager quickly learn enough about a
new department to be able to help his or her employees to do a
better job?
In my experience, while successful manager s
must have basic management skills, their prime
qualification is to know enough about the
business at hand to be able to make the tough
decisions that ensure survival.

77
 Look at the recent troubles in the computer
industry: most of the companies that have
failed, have been acquired, or are in deep
trouble are those whose top management is
heavy with non-experts such as accountants .
The companies that are surviving - or better yet,
prospering - are those managed at the top by
people who know how to build and sell
computers.
Machiavelli again:
And I have never met a successful first- or
middle-level manager who was not an expert in
the field of activity of his or her department. He
or she might not have been an expert when
promoted, but quickly put considerable energy
into becoming an expert. The boss must,
therefore, never take his thoughts away from
the purpose of his organization ... (XIV-3)
All of the successful managers that I know
focus fiercely on the real missions of their
departments (which might differ somewhat
from the "official mission" described on paper).
A friend of mine in the school textbook business
received a directive to "increase market share."
She translated this to mean "keep our textbooks
in line with changes in school curriculums."
When a newspaper publisher was instructed to

78
 "cut printing costs," he knew this meant "learn
about computer technology applied to
printing."
As Machiavelli put it:
Often a great leader asked questions of this
nature: suppose the competition took such an
action, and we reacted thusly, which of us would
have the advantage? How could we r eorganize
to meet their threat? ... And he proposed for
discussion all situations that could arise; he
listened to the opinions of his colleagues, then
stated his own, and the reasons behind it: so
that thanks to these continual thoughts there
never arose a situation that he was not pr epared
to handle. (XIV-4)
But, in what concerns exercising the mind, the
boss must read case histories, and in these
consider the actions of excellent leaders to see
how they managed, to examine the reasons for
their successes and failures, in order to be able
to avoid failure and attain success. (XIV-5)
Do you follow Machiavelli's advice? Specifically, do you
read and discuss case histories in business newspapers,
magazines, and books, in order to help to understand what
other managers do right and wrong?
A wealth of business case histories are r eadily
available. For instance, I have under my eyes six

79
 randomly selected copies of The Wall Street
Journal, for six different days. There are thr ee
front-page stories each day, for a total of 18
stories. Of the 18 stories, 8 are analyses or case
histories related to mainstream businesses, 5 are
related to politics or political leaders, 3 are
analyses or case histories of unusual businesses,
2 are human interest stories. Thus 60% of the
stories are intended to help managers learn fr om
the experiences of other managers.
A more detailed analysis of the contents of
the Journal, or of such publications as Business
Week, The Economist, Forbes, Fortune,
Management International would confirm that
case histories form an important part of the
appeal of these publications. The same is true
of books and journals directed to particular
industries or to particular functions (from
accounting to warehousing).
Machiavelli again:
A wise boss must never stay idle during good
times, but must work hard to capitalize on
them, in order to be able to profit from them in
adversity, so that, when fortune changes, he will
be able to resist the change. (XIV-5)
Here Machiavelli is making the often-neglected point that
we can learn from successes as well as failures. When things

80
go right, we can analyze why and how, in order to be better
prepared when things start to go wrong. Does your company
or department follow this practice? Can you use your
influence to get it going?
In most of the organizations that I have worked
for, there has been a highly visible bulletin
board or newsletter, where we could publish
charts or stories illustrating recent successes in
our department or in the company.

81
 12. On Those Actions for Which Peopl e,
Especially Bosses, are Praised or Blamed

Many have imagined organizations that have

never been seen nor known to exist in reality.
Since we live so differently from the way we
should live, whoever ignores what is done, in
favour of what should be done, learns how to
ruin himself rather than how to survive:
because a person who wishes to be virtuous in
all things must come to ruin when surrounded
by so many who are not virtuous .
Hence it is necessary for a boss, if he wishes
to maintain power, to learn how to be not
virtuous, and to use or not use this ability
according to necessity. (XV-1)
We see clearly here what I call Machiavelli's "scientific
cynicism". I use the word cynicism in its original sense of this-
wordly practicality, as opposed to other-worldly utopianism.
Machiavelli observes that we do not live in the ideal, perfect
world that we would like to live in, and that, in order to survive
in this imperfect world, we must act in ways that would not be
needed in those ideal, perfect worlds that we can imagine, but
that do not exist.
Does it ever seem to you that, at times, persons in higher
levels of management appear to violate basic principles of
conduct? Think about national leaders; generals or admirals;

82
captains of industry; and your own bosses. What principles do
they sometimes seem to violate? If we apply Machiavelli's this-
wordly standards to their behavior, can we understand and
accept it?
One example comes to mind from my
experience. Many years ago, I worked for a
corporation in which top management
undertook a reorganization involving the
shutdown of a production unit. Rumors wer e
flying about possible layoffs, and the concerned
employees were worried. Since we needed their
contribution until the last minute, their boss
stood up in front of them, denied the rumors,
and promised that their jobs were safe. Six
months later, they were all offered a severance
package.
Unethical? Well, at first I was shocked, but
later I put the events into perspective. First of
all, the closure was necessary from a business
point of view. Furthermore, the manager in
question needed to hold the organization
together during the six-month period of
reorganization. Technically, the manager did
not lie, since he never said how long the
threatened jobs would be safe. This point may
seem to be a mere "technicality," but nearly all
bosses must use such devices as a last resort.

83
 Machiavelli again:
I know that everyone will agree that it would be
very praiseworthy if a boss had all the qualities
that are held to be good; but, since he cannot
have them all, nor always practice them
because the human condition does not permit
doing so, the boss must be prudent enough to
avoid completely those flaws that would cost
him his job, and, if possible, to eschew those
that would not cost him his job; but, if avoiding
the latter is not possible, he can indulge in these
flaws with less circumspection. (XV-3)
One of the greatest military and political leaders of all time,
Temuchin, Genghis Khan (1162-1227), put the matter in the
following way: "It would be seemly to get drunk only three
times a month. It would be preferable, clearly, to make it only
twice or even only once. It would be perfect never to get
drunk at all. But where is the man who could observe such a
rule of conduct?"
Have you ever had a boss with no personal bad habits? If so,
he or she must have been an insufferable prig. The important
question, for a boss or anyone else, is whether behavioral flaws
detract from performance. Can you think of cases where
personal flaws have, or have not, detracted from a boss's
performance?
The definition of personal misbehavior varies from time to
time and place to place. What is considered acceptable

84
tipsiness in one place is seen as intolerable drunkenness in
another. Any use of alcohol, or even tobacco, is viewed as a
vice, if not a sin, in some social environments. Innocent
cussing in one place would be forbidden profanity in another.
Football pools would be sinful gambling to some bosses.
Behavior that may have been treated as acceptable flirting at
one time is now widely regarded as sexual harassment. There is
also the question of the extent to which an employer has the
right to consider an employee's behavior outside the
workplace. No employer wants to have the "town drunk" or
"skirt chaser" or the payroll, but should an otherwise
satisfactory employee be fired (or even disadvantaged) because
he or she has a reputation as an after-hours "barfly,"
"womanizer," or "pushover"? Every boss or would-be boss
should establish a set of standards by which to test his own
personal behavior and that of his subordinates and superiors.
Such standards should include tolerance of minor slips, since
few mortals are perfect - and those few are certainly not in
business.
And furthermore the boss should not care if he
incurs blame from questionable behavior
without which he would have difficulty in
preserving his organization; because, if we
consider all things thoroughly, we will find some
things that seem virtuous but would result in
ruin, and others that seem not virtuous but
would result in security and well-being. (XV-3)

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 Here Machiavelli looks at another side of a boss's need to
follow this-worldly practicality rather than other-worldly
utopianism: public blame. Early in this chapter we considered
the case of a boss who laid off employees after seeming to
promise job security. He took a roasting from those who knew
the events - even though the action was necessary. Public
blame is part of the price of accepting authority. As President
Harry Truman put the matter: "If you can't stand the heat, stay
out of the kitchen." Have you seen cases where a boss had to
take "the heat" for a necessary action?

Public blame can be especially hot when a

founder is forced out. We all know such cases. I
know a case of a floor-covering firm. The
founder was brilliant at both buying and selling.
He purchased the best tiles, carpeting, and
adhesives at favorable prices, and he
merchandised them so that his floors became
legendary. But "Mr. Floor's" entrepreneurial
genius got out of hand, as often happens, and
turned into incurable over-expansion. He
opened too many branches and added too many
sidelines such as wall-coverings. Finally his
financial backers forced him to step aside into a
consulting role, and to accept a skilled manager
as the boss. Would you be willing and able to
take the heat which that new boss felt?

86
 13. On Being Generous or Pars im oni ous

A boss who cannot be generous without

damage to his organization, must not, if he is
wise, care whether he is called a miser: because
with time he will be held generous, once it is
seen that his budget is balanced thanks to his
parsimony. (XVI-2)
When cost reductions are necessary, they must be
undertaken no matter how unpleasant. When we judge cost
reductions, especially as they affect us, our honesty is put on
trial. Can you think of cases where cost reductions resulted in
an ultimate strengthening of the organization, and in praise
for the cost cutters? Be honest!
I have gone through cost reductions more times
than I can remember. Everybody (including me)
always complains when the budget-cutting
knife is sharpened. Our complaints are always
the same: the cuts are too large and unfairly
distributed. Each time, everyone knows that the
cost cutters have gone too far: that essential
operations will be unfavorably affected; that no
more cuts are possible.
Some time later, when we look back, we see
that the organization was actually improved:
the cuts forced us to focus on essential
operations, and to stop doing things that

87
contributed little to the true mission of the
organization. The boss who ordered the cuts
soars from miser to savior .

88
 14. On Whether it is Better to be Loved than
Feared or Better to be Feared than Lov ed

Every boss must wish to be considered nice and

not tough: however, he must be careful not to
misuse his niceness .
A boss must not mind whether he is
considered tough when he takes actions to keep
his employees working well: since, if he takes a
few tough actions, he will actually be nicer than
those who, by acting too nice, let discipline
deteriorate.
That is so because a general deterioration
offends all employees, while a few tough actions
offend only those concerned.
... Nevertheless, the boss must judge and take
action slowly and deliberately, must not scare
himself, and must proceed with prudence and
humanity, avoiding recklessness due to
overconfidence and intolerance due to suspicion.
(XVII-1)
Have you ever known a department where efficiency
suffered because the boss was too nice? Did some employees
take advantage of the boss's niceness? Did the department's
morale suffer for that reason?
We have all seen cases where some employees are allowed to
break rules, such as rules about working hours, because the boss

89
is trying to be nice about these employees' personal problems.
The result is a drop in overall discipline - as well as morale -
because a workplace is not a psychiatric hospital. If the boss
takes tough action against the rule-breakers, they may
complain, but the rest of the department will applaud
(sometimes silently). Excessive delegation is another example
of over-niceness.
All subordinates are flattered when a manager gives them
greater authority; yet the boss errs when he gives a
subordinate more power than he or she can handle. A boss
also errs when he does not give the subordinate adequate
guidance, but, in an effort to be liked, continually refers
matters for decision back to the subordinate, by saying: "How
do you think we should handle it?"
Although General McClellan defeated General Lee at
Antietam, President Lincoln removed the victorious general
from command because his victory was not decisive. One
reason the outcome was not decisive was that McClellan had
delegated too much authority to one of his corps commanders:
he was being nice to a friend. The friend failed to follow the
battle plan, reducing the scope of the victory.
Linda A. Hill of the Harvard Business School describes the traits
that a new boss must cultivate: "They must learn to lead rather
than do, to win trust and respect, to motivate both the individual
and the group, and to strike a balance between delegation and
control."14 Note that "being liked" is not mentioned.

90
 Control through firm leadership, to use Prof. Hill's words, is
what Machiavelli urges. And he warns against "recklessness
due to over-confidence and intolerance due to suspicion."
Have you ever observed excessive toughness resulting from this
pair of unhealthy traits?
An example of excessive toughness born of
haste, arrogance and overconfidence. A young
manager was moving very quickly up the ranks
of the organization. When he reached the
lowest level of the top-management layer he
started to throw his weight around without
mercy. Anyone on his path had to change
priorities, or work overtime, in order to meet his
requirements, at once, or else. A quote: "Do you
know who I am and how much power I have
around here?" Was he successful? No, he
changed companies.
The other extreme: someone I know well, who
has three good traits: he is nice, nice and nice.
You will not be surprised to learn that he did not
remain a manager for a very long time. He was
unable to prevent the inevitable bad apple from
ruining the efficiency of his department.

14 From Becoming a Manager: Mastery of a New Identity by Linda A. Hill

(Boston, 1992)

91
 As Machiavelli says:
The foregoing rule gives rise to the question: is
it better to be loved than feared, or better to be
feared than loved?
The answer is that we wish to be both; but,
since it is difficult to be both, it is much safer to
be feared rather than loved, if we must forgo
one of the two.
That is so because of people one can say this
in general: that they are ungrateful, fickle,
deceitful, and dissembling; avoiders of danger;
and greedy. As long as you do something for
them, they are all yours so long as adversity is
far away; but when adversity comes, they rebel.
People hesitate less to offend someone who
has made himself loved than someone who has
made himself feared; because love is
maintained by a tie which people, since people
are bad, they will easily break for the sake of
self-interest; whereas fear is maintained by the
dread of punishment, and this is always present.
(XVII-2)
There is another of Machiavelli's "scientifically cynical"
judgements. It is scientific in the sense that it is based on
observation. It is cynical because Machiavelli's outlook was
pessimistic. Almost two centuries later the French moralist La
Bruyère reached the same conclusion: "Let us not feel

92
animadversion against mankind when we see hardened hearts,
ingratitude, injustice, pride, love of oneself and thought-
lessness towards others; such are men, it is their nature: it
would be like not being able to bear that stones fall or that fire
rises."
A less pessimistic observer might conclude that some, even
most, mortals are not so contemptible. Yet even the most
optimistic observer must admit that many humans have weak
natures. That being so, a prudent boss will use fear - the threat
of punishment - to keep his weaker subordinates in line.
One of the most effective managers I have ever
known, a man who was not particularly brilliant
in any way, deliberately used fear in order to
enforce respect for his views and decisions. He
made clear to his subordinates that he would
not hesitate to use his managerial power
against them, if they crossed him. Since he did
not flaunt his power, or use it capriciously, he
did not offend his stronger subordinates. The
weaker ones, moreover, viewed him with respect
rather than hatred. The line between fear plus
respect, on the one hand, and offensiveness
plus hatred, on the other hand, is thin. It is
difficult to steer a course between the two
without error.
Easily the worst manager I have ever had the
misfortune to work with - let's call him "Boney"

93
- was one who incurred contempt and hatred
because he appeared to use his power
arbitrarily, with no regard for the opinions of
any of his subordinates. In fact, he had been
given ambitious objectives by higher
management; achieving them required the
adroit use of power, because significant change
in the department's working methods was
required (refer back to Chapter 4 for
Machiavelli's views on how to manage change).
Unfortunately, Boney was one of those
people who want to be liked by everyone and
who avoid any form of inter-personal conflict
as if it were the plague. In order to avoid
challenges to his decisions, he avoided making
them public until the last possible moment.
Then he sprung them on people by surprise. The
result? Resistance to change was far greater
than it would have been if people had felt
somehow involved in the decision-making
process. Boney clearly thought that being
perceived as "nice" was more important than
being perceived as "tough". But the
department's objectives forced him to be tough,
and his attempts to project an image of
"niceness" only succeeded in br ewing
tremendous insecurity and resentment in the

94
 department: people were literally spending hours
a week trying to figure out what the "secr et
plans" were that the boss was hiding from them.
Machiavelli again:
Nevertheless, the boss must make himself
feared in such a way that, if he does not gain
love, he avoids hatred. Indeed he can easily be
feared and not hated; and he will achieve this
standing so long as he avoids offending his
employees. (XVII-3)

To summarize Machiavelli's advice, we can say that a boss

who is feared and not hated is respected, and that it is better to
be respected than to be loved. Can you think of some truly
outstanding managers that you know? Are they both loved and
respected? Can you think of managers who are more loved than
respected? Have they been effective in both easy and tough
times?
I once knew a very effective and successful
manager who was both loved and respected. He
was promoted, and continued to act as he had in
the past. But the new environment was tougher,
more competitive, and he failed, because he put
more emphasis on being loved than on being
feared. When I last knew him, he was outside the
chain of command, in the harmless role of
"Special Projects Manager".

95
 15. On the Way Bosses Should Keep Faith: the
Limits of Candor

Everyone knows how praiseworthy it is for a

boss to keep his word and to rely on honesty
rather than cunning.
Nevertheless we see from experience that in
our times those bosses who have achieved great
things have put little stock in integrity, and that
they have used cunning to manipulate the
minds of people; and in the end they have
surpassed those who relied on honesty .
(XVIII-1)
This famous chapter is often cited to show Machiavelli's
"utter cynicism." Note, however, that he is reporting his honest
conclusions from careful observation of human behavior: in
other words, a "scientific cynicism." Not also that Machiavelli
accepted the Judeo-Christian view of humans as inherently
sinful (or fallible), a view shared by many other great thinkers.
I shall never forget one example of "creative
cunning" that would have flunked the test of
honesty. A division manager - let's call him
"Conn" - showed a sales forecast projecting a
steady increase, reversing a steady decline to
date. When questioned by his superiors and
peers, he explained that many factors had
changed, though he was vague about them.

96
 Sales continued to decline for several months
while Conn stuck to his optimistic forecasts and
vague explanations. Finally sales improved,
thanks partly to improved conditions and partly
to Conn's actions.
If Conn had been honest at the beginning, he
would not have had the chance to take action
to correct the problems: his superiors and peer s
would not have had confidence in him.
Machiavelli again:
Therefore you must know that there are two
ways to fight: the first relying on laws, the
second relying on force. The first is
characteristic of people, the second of animals .
But as the first is often not enough, one must
sometimes rely on the second. (XVIII-2)
Although Machiavelli prefers a civilized rule of law, he
recognizes that a resort to force is sometimes necessary,
because of what John Adams later called "the lust of mankind
after dominion." This is why states have armies and police
forces and why businesses have security departments.
Occasionally even managerial personnel must be restrained or
expelled by force. Do you know of such cases?
I have experienced several. In once case a
department manager abused his authority to
monitor phone calls and was systematically
recording the conversations of his direct

97
superior. When confronted, he had the
effrontery to deny the facts! In another case,
an employee was occasionally suspending his
work for 15-30 minutes in order to commit
adultery, on company premises, with another
employee.
As Machiavelli says:
The boss must be able to use the skills of the fox
and the lion; because a lion cannot avoid a trap,
and a fox cannot defend itself from wolves. He
must therefore be a fox in order to recognize
traps, and a lion in order to scare away wolves .
Those who try to live like the lion alone are
seriously mistaken.
Therefore a wise boss cannot, and should
not, keep his word when doing so would injure
him and when the reasons that made him
promise good faith are no longer there.
If people were all good, this maxim would not
be good; but since people are bad, and will not
keep faith with you, you need not keep faith
with them. Nor will the boss ever lack
legitimate reasons for explaining lack of faith.
He that has best used the nature of the fox
has had the most success. But it is necessary to
know how to misrepresent well this nature, and
to be a great deceiver and dissembler. People ar e

98
 so foolish, and such slaves of immediate needs ,
that whoever fools them will always find
someone who will let himself be fooled. (XVIII-3)
One of the best-known studies of President Franklin D.
Roosevelt calls him "the lion and the fox," borrowing
Machiavelli's description of a leader.15 The leonine side of an
effective boss is obvious. He or she has the presence to ward
off the wolves who threaten the boss or his organization with
sabotage, malicious gossip, or other harm. But what about the
boss as a fox? That is a less obvious idea. Yet it is clear that a
boss must be enough of a fox to avoid traps: excessive flattery,
phony promises, deals too good to be true, and many others. A
boss must also sometimes tell the public what the majority
wants to hear, even if he must stretch the truth. The majority
often want to be fooled. One of America's great showmen, P.T.
Barnum, made the point vividly: "There's a sucker born every
minute". And even one of America's great statesmen, Abraham
Lincoln, observed that "you may fool all the people some of the
time; you can even fool some of the people all the time,"
though he added that "you can't fool all the people all the
time." Machiavelli would have endorsed all three of Lincoln's
observations. Despite his scientific cynicism, the man from
Florence - like the man from Illinois - believed that most
people seek "knowledge of honest and good things" (opening
chapter, Discourses).
16 James McGregor Burns, Roosevelt: the Lion and the Fox (Harcourt, Brace,

Jovanovich, 1983)

99
A prime example of managerial foxiness, one
that I have seen in every organization I have
ever worked for, is job inflation. How often do
bosses call even their lowliest subordinates
"colleagues" or "associates"? How often does a
boss hire a secretary who will not be "just a
secretary" or a clerk who will not be "a mer e
clerk"? To be sure, such dissembling can
approach absurdity, as when janitors become
"sanitary engineers" and branch manager s
become "vice presidents".
Machiavelli again:
At some point deception becomes self-
deception. The boss, therefore, need not have in
fact all good qualities, but it is essential that he
should appear to have them.
Indeed, I will dare to say that having them
and abiding by them at all time is damaging,
while appearing to have them is useful. A boss
cannot invariably abide by all those principles
for which people are held to be good, since it is
often necessary, in order to preserve the
organization, to act against faith, charity ,
humanity, and religion.
And yet he must have a spirit that is ready to
turn according to the winds of fortune and the
changes in situations, and, as I said before, be

100
 good when he can, but know how to be bad
when he must. (XVIII-4)
Here Machiavelli is putting his lion-and-fox image of the
leader in different terms. He argues that a boss must appear
always as a pillar of virtue, but must in fact react to the "winds
of fortune" as the situation requires - even if that means
breaking ordinary rules of behavior. Machiavelli certainly
prefers decent conduct, but he recognized that there is no
choice but to break rules when the survival of the organization
is threatened. Elsewhere he states: "I believe ... that it is better
to act and regret than to not act and regret" (Discourses,
chapter 2). How do you feel about Machiavelli's advice? Have
you known bosses who follow it?
One very effective manager of my acquaintance
exudes charm, willingness to listen, openness,
and other marvelous qualities. It does not
matter whether he has these qualities or not;
what matters is that he appears to have them,
and his employees love him for that. People also
accept his tough decisions. For instance, he fir ed
a salesman for losing a sale by being late to an
appointment. When the salesman tried to
explain his tardiness, the boss would not even
listen, but nobody criticized him for that, since
he was widely perceived to be open and fair.
As Machiavelli puts it:
A boss must, therefore, take great care never to

101
 say anything that is not full of good qualities ,
so that he appear s, to those who see him and
hear him, full of virtues.
All people see what you appear to be, few
know what you are; and those few do not dar e
to contradict the opinion of those who have the
power of the organization behind them; and in
judging the actions of people, especially bosses ,
when there is no higher judge, we judge based
on the results.
If a boss does well for his organization, the
actions he has taken will be always judged
honorable and praised; because the crowd is
always attracted by appearance, and by the
final outcome, and in the world there are only
crowds. (XVIII-5)
All people see what you appear to be, few know what you
are. Can the reader think of examples to illustrate this maxim?
I have several acquaintances who have been
around a certain industry for years, changing
companies from time to time, even though they
are nearly totally incompetent. Their secr et?
They appear to be very competent, since they
know well the arcane technical jargon of the
industry. Many see what they appear to be, few
know what they are.

102
 To use a Vietnam-era expression: sometimes it's enough to
talk the talk, you don't need to walk the talk. Although
Machiavelli is realist enough to recognize the importance of
appearances, he reserves his admiration for real achievements.
"Nothing gives a prince more prestige than undertaking great
enterprises," he writes in XXI, "and setting a splendid example
for the people." When there is no higher judge, we judge based
on results. Does this apply to modern business organizations?
A manager whom I once knew got into trouble
with his new boss. He was exiled to that
company's equivalent of Siberia. To everyone's
surprise, his results in "Siberia" were exceptional,
outstanding. Within a short time, he was back
in the warm part of the world, promoted by the
very man who had exiled him.
In the world there are only crowds. A harsh judgement. Is it
true? Here Machiavelli is being the hard-headed realist, while
betraying some personal disappointment. In the short run,
unquestionably, "nothing succeeds like success." Although The
Prince failed to bring fame or fortune to its author during his
lifetime, it brought him immortality. To be sure, Machiavelli
explained elsewhere that his writing was not motivated by a
thirst for fame but rather "by that natural desire that was
always in me to work, come what may, for those things that I
believe to be for the common benefit" (Proem to Discourses).
For those who want immediate recognition - and how many
mortals do not? - there are indeed only crowds. Crowds,

103
moreover, are taken in by the trappings of success and are
fickle. Where is yesterday's best-seller, Broadway hit, star real-
estate promoter, or "Best Managed Firm"?

104
 16. How Bosses can Avoid Being Despised and
Hated

The vast majority of men live contentedly as

long as no one takes their goods or their honor ,
so the boss needs only to contend with the
ambition of few people, and this can be held in
check in many ways and with ease ... The boss
must arrange his actions to show greatness of
spirit, wisdom, and strength. (XIX-1)
In other words, most employees will be happy so long as
their salaries and status are safe. Few will be ambitious for
promotions. Machiavelli's observation was confirmed in a
study of 3641 managers in 14 countries, made by a team at the
University of California at Berkeley.16 That team found that
most of the managers rated security and autonomy higher
than esteem. Esteem is sought only by the handful who burn
with ambition.
I have never worked in a department where
more than one or two of the employees aspired
to replace the boss.
As Machiavelli says:
A boss must fear two types of conspiracies: the
internal conspiracy of his employees, and the
external conspiracy of other bosses. He protects

16 Mason Haire et al., Managerial Thinking: an International Study (Wiley,

1966)

105
 himself against outside threats through his own
competence and by having friends, and he will
be secure against internal conspiracies so long
as there are no successful external conspiracies .
(XIX-2)

Can a manager get into trouble with his subordinates if his

peers and superiors respect him?
All the employees, without exception, disliked
and failed to respect a certain manager I once
knew - let's call him "J.R.". An unusual
situation, but literally true! He had done
everything possible to incur dislike and
disrespect among his subordinates .
Yet he survived for year after year, because
he had the support of his peers and superiors in
the organization. He had friends among them,
and they knew that his operating results wer e
good.
Machiavelli again:
But even when there are no external
conspiracies, one should still fear secret internal
conspiracies. These are avoided if the boss
keeps his employees satisfied with his
leadership. (XIX-3)
When Machiavelli says that internal conspiracies are
doomed to fail without outside support, he does not mean that

106
such plots cannot happen. Moreover, scheming hurts
productivity, even if it fails to unseat the boss. Satisfaction
with the boss's leadership - not mere popularity - is the best
insurance against secret conspiracies.
As time passed, J.R. - mentioned above - had an
increasingly hard time maintaining
departmental productivity, because his
subordinates spent inordinate amounts of time
trying to figure out how to embarrass him in
front of higher management.
As Machiavelli puts it:
I conclude, therefore, that a boss should take
little account of conspiracies when the
employees are on his side; but when the
employees are his enemies and hate him, he
must fear everything and everyone.
Well-run organizations and wise bosses have
diligently thought of ways to satisfy their
employees, because doing so is one of the most
important tasks of a boss. (XIX-6)
In modern business, we speak of motivating employees.
How many companies have gotten into real trouble because a
split developed between workers and management, and the
workers were not willing to take an overall company view
when the company was threatened by economic conditions or
competition?

107
Without naming names, how about the well-
known airline industry executive who was
forced to step down because all of the airline's
unions wanted him out, and the financial
results were poor?

108
 17. On Bosses' Behavior in Tak e ove r s

A new boss must not demote all his employees;

on the contrary, he should promote some. In this
way those who suspected him become loyal, while
those who trusted him become more faithful.
But if he demotes them, he offends them and
shows that he does not trust them, and thus
sows the seeds of hatred of the boss.
Furthermore, since the new boss needs some
subordinate managers, if he demotes his
employees, he is obliged to bring in new
subordinate managers from outside the
organization, with unpredictable r esults. (XX-2)
Did the reader ever observe a new manager create serious
morale problems by replacing all or most existing subordinate
managers with his old friends from his old job?
I have seen that happen, but I would like to give
a positive example instead. I mentioned befor e
that I was once involved in a very well planned
and executed takeover. One of the things we
did is exactly what Machiavelli recommends: we
made it a point to promote some (but not all) of
the managers of the acquired organization to
important jobs within our organization. This
approach fostered trust and good morale in the
acquired organization.

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 Machiavelli again:
But, when a boss acquires authority over a new
organization that will be merged with his
existing organization, then it is necessary to
demote the subordinate managers of the new
organization, except for those who were allies
of the boss during the acquisition.
And even they must be made powerless over
time, and a new management structure created
that consists only of managers from the boss's
organization. (XX-3)
How many readers have observed a corporate takeover or
merger closely enough to recognize this sort of managerial
problem? I have seen several such cases, and they all followed
Machiavelli's observation. Note that Machiavelli's advice does
not contradict the first part of this chapter, though it may
seem to do so. Here he is stressing the importance of loyalty.
Every organization, he says, needs key managers who are loyal
to it, not to some bygone outfit. Machiavelli gives other useful
advice in Chapters 1, 2, 3, and 8 for bosses involved in
takeovers. When Machiavelli speaks of loyalty, he is being
unsentimental as always. He is speaking of earned loyalty - not
of loyalty based on old association, not even of loyalty based
on past performance, but rather of loyalty based on current
results.
In the smooth takeover I cited above, my outfit
promoted some of the managers from the

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 acquired organization - those who were skilled
and not embittered - to key jobs in the new
organization. At the same time, we filled other
key jobs with tested managers from our firm -
thus "colonizing" the new organization.
In addition, we gave "lateral promotions" to
the mediocre people; encouraged and facilitated
resignations by the malcontents; and fired the
serious troublemakers. (All these stratagems are
discussed in Chapters 1, 2, and 3.) While making
these moves, we made sure we understood the
culture of the acquired organization, its social
currents, and the sources of discontent.
Machiavelli again:
Many think that a wise boss must, when he has
the chance, slyly develop some enemies or
problems so that, when they are defeated or
solved, his reputation will improve. (XX-6)
Has the reader observed that managers whose departments
never have problems are not as well respected as those whose
departments have problems that are solved by the manager?
Did you ever suspect that some managers cleverly foster
problems that they know they can solve, just in order to get
attention from higher management?
"Foster" is too strong a word, but I do know of one
case first-hand (although I have never per sonally
followed Machiavelli's advice on this point).

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 Resources were too thin in a certain
department, and the departmental manager -
let's call him "Foxy" - knew it well. He knew
that higher management would not appreciate
being told of this, so he said nothing, even
though he had a remedial plan.
Foxy waited until performance degenerated
to the point where top management got excited,
and started talking about creating a special task
force to solve the problem. Then he trotted out
his plan for increased r esources. It was approved
and quickly implemented.
Performance improved dramatically, and Foxy
was a hero.
Bosses have even been known to invent troublesome
competitors, suppliers, or customers - preferably located far,
far away from headquarters - whose mischief is overcome by
the inventive bosses. Although such total fabrication cannot
be recommended or condoned, exaggeration of the potency of
commercial enemies or problems is natural and useful.
In many cases, the boss will easily be able to
gain the loyalty of employees who were his
enemies when he first took over the
organization, provided that they need the
support of the boss to succeed. Such employees
are obliged to serve the boss well in order to
dispel with actions the bad impression that they

112
 know he has of them. Hence the boss will get
more contributions from them, than from those
who, serving him in safety, neglect his priorities.
(XX-7)
When Machiavelli speaks of enemies here, he means persons
who took different policy positions, not of persons "out to get"
the boss regardless of circumstances. Sooner or later, every
boss finds himself in such situations. We have all read of
political candidates who welcomed former opponents to their
teams - even as "running mates" - and won strong support
from them. I have been in the position of a boss with former
opponents as my subordinates, and also in the reverse position
where one of my former opponents became my boss. You may
be sure that I extended myself when my boss was an ex-
opponent - more so than his longtime supporters did - and
that my ex-opponents extended themselves for me when I
became their boss.
The boss who has acquired a new organization
thanks to the internal efforts of that
organization must consider well the reasons of
those who favoured him. If their motivation is
not natural affection towards him, but is merely
dissatisfaction with the previous state of
affairs, it will be difficult for the boss to
maintain their favour, because it will be
impossible for him to satisfy them.

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 It is much easier for a boss to make friends of
people who were happy with the previous state
of affairs, and hostile to the new boss, than to
maintain the friendship of people who
supported a takeover because they wer e
unhappy with the previous state of affair s.
(XX-8)
Here Machiavelli is talking about the psychology of
discontent. Every politician soon learns the cost of winning
office thanks to "dissatisfaction with the previous rascals"
rather than thanks to "natural affection" for the newly elected
candidate. Dissatisfaction breeds unrealistic expectations,
which no boss can satisfy. Affection implies only hope for
improvement - a New Deal, in one famous phrase. The wise
boss will offer hope of improved conditions but not a
prescription for remedying dissatisfactions.

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 18. What the Boss Should Do to be Respected

Nothing creates as much respect for a boss, as

his accomplishing difficult tasks and acting in a
bold and dignified manner. (XXI-1)
Above all things, a boss must find ways to make
all his actions appear those of a person with a
great spirit and an outstanding mind. (XXI-2)
A boss is respected if he is a true friend or a true
enemy, that is, if he openly shows himself for or
against someone. (XXI-3)
A boss must also show himself a lover of
performance, by listening to able employees,
and rewarding those who have outstanding
abilities. Furthermore, he must encourage his
employees to improve their skills, ... and should
reward whoever has ideas for improving
operations. In addition he must, at appr opriate
times, organize parties and entertainments.
And, since any organization is divided into
groups, he must take this diversity into
account, and meet with each group once in a
while, showing his concern and generosity,
while maintaining his dignity, which must be
present at all times. (XXI-7)
Note the order of Machiavelli's checklist for bosses. First
and foremost is the boss's manner. Next comes the boss's

115
general attitude, followed by his specific behavior towards
subordinates. Fourth in line are incentives for improved
performance. In fifth place we find social activities. Last and
not least is what we now call group dynamics.
Modern psychologists confirm Machiavelli's wisdom.
Consider a study of the "likableness" of key personality traits.17
The subjects rated these five traits highest on a scale of 0 to 6:
sincere, loyal, truthful, warm, friendly. Orderly and careful were
a distant fifth and sixth. A boss should behave with true
dignity to all, especially his employees, meaning honestly,
forthrightfully, and sympathetically. Psychological studies
support Machiavelli's judgement that a boss can motivate his
subordinates effectively by being a good listener and by giving
words of encouragement when employees behave as desired
(this is known as "positive reinforcement" in modern
psychological jargon, as opposed to "negative reinforcement"
which consists in meting out verbal or physical punishment
when undesired behavior is observed).
Ever since the famous Hawthorne studies at a Western
Electric plant,18 modern experts have recognized the
importance of informal groups within the formal organization.
Machiavelli saw their importance five centuries ago. A
successful boss pays attention to every cohesive group - often

17 N.H. Anderson, "Likableness Ratings of 555 Personality Trait Words,"

Journal of Personality and Social Psychology (no. 9, 1968)

18 The Hawthorne studies were started by Elton Mayo in 1927 and are

reported in F.L. Roethlisberger and William Dickson, Management and the

Worker (Harvard University Graduate School of Business, 1947)

116
called a team - in a company, fostering their team spirit and
their will to excel.

19. On the Subordinates of Bosses

The choice of his subordinates is not a matter of

small importance for a boss .
Subordinates can be good or not, depending
on the wisdom of the boss. The first opinion one
forms regarding the mind of a boss is based on
the people that surround him; when they ar e
competent and loyal, the boss can be
considered wise, because he was able to
recognize competence and inspire loyalty.
When they are otherwise, one can have a poor
opinion of the boss, because the first mistake a
boss can make is in the choice of his
subordinates. (XXII-1)
Can the reader think of good managers whose departments
contained good employees? And of bad managers whose
departments contained poor employees? Do you see a
correlation? Since a good definition of management is getting
work done through other people, it is clear that choosing the
right people and motivating them is a fundamental
requirement for success.
The most successful organization that I ever
worked for was not particularly well managed

117
 in the conventional sense (that is, in such areas
as planning or making decisions swiftly). Its
secret for success was to hire and retain the
best people, so that their employees wer e
always a cut above those of their competitor s.
Alfred Sloan, who built General Motors,
chose able and loyal lieutenants such as Charles
E. Wilson (later President Eisenhower's Secretary
of Defense) and Charles F. Kettering (later co-
founder of a cancer research institute). By
contrast, Henry Ford alienated his best
subordinates and kept only yes-men. The
consequences for Ford Motor Company ar e
discussed at the end of Chapter 7 and in
Chapter 10. 19
As Machiavelli says:
There are three kinds of minds: those that
reason by themselves, those that understand
the reasoning of others, and those that do not
reason by themselves and do not understand
the reasoning of others. The first are most
excellent, the second excellent, the third useless .
(XXII-2)

19 See GM Passes Ford: 1918-1938, by Arthur J. Kuhn (Penn State Press,

1986)

118
 Here again Machiavelli anticipates the conclusions of
modern psychology. According to one authority, "the socially
valued traits which accompany originality include
independence of judgment, freedom of expression, and novelty
of construction and insight." On the other hand, "the socially
disrated traits that may go along with originality include
rebelliousness, disorderliness, and exhibitionism."20 Clearly a
boss will want only a limited number of original thinkers
among his subordinates, and will want them in special
positions, assigning most positions to Machiavelli's "those that
understand the reasoning of others."
Here is an infallible method for judging a
subordinate. If you see that the subordinate
thinks more of himself than of you, the boss ,
and that in all actions he seeks his own good,
then you know that he will never be a good
subordinate, and that he will never be
trustworthy. Because whoever holds delegated
responsibility should never think of himself, but
of his boss.
And, correspondingly, the boss, in order to
maintain loyalty, must think of his subordinate,
rewarding him, sharing honor and promotions ,
so that the subordinate will see that he depends
on the boss.

20 Frank Barron, Creativity and Psychological Health (Van Nostrand, 1963)

119
 When bosses and subordinates act in this
was, they can trust each other; when they act
otherwise, things will always end badly for one
or the other. (XXII-3)
In other works the manager-subordinate relation must be a
symbiotic partnership, where both gain by working together.
Neither can gain on his own, and both must recognize and
reward the contribution of the other.
I observed a case in point. A new manager
stated his intention to change the way of
working of a complex decentralized and matrix-
managed organization. He wanted to build a
team, and wanted the organization to work as a
team.
A good idea, but he was unable to implement
it because he continued to act like a hierarchical
manager; since he never treated his
subordinates like team member s, they never
became team members, and continued to act
like hierarchical subordinates. As one observer
said, "They always saluted but never reported
the condition of the trail ahead."
The manager wanted to gain for himself the
advantages of a team structure, without giving
anything up to his subordinates. It was a one-
way deal, and it was refused.

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 20. How Bosses Should Avoid Flatterers

I do not wish to omit an important topic, an

error that bosses avoid with difficulty, unless
they are exceptionally able. This error is to
come under the spell of flatterers, who abound
in all organizations.
Because people like themselves and their
own actions so well, they avoid this plague with
difficulty, and those who wish to avoid it risk
losing their prestige. For there is no way to
avoid flattery, except to let people know that
they will not offend you if they speak the truth;
but when everyone can speak the truth to a
boss, he loses his prestige. (XXIII-1)
Poets throughout the ages have warned against flattery and
against confusing it with helpful advice. Shakespeare
regretted that "men's ears should be to counsel deaf, but not to
flattery!" How can a boss keep his ears open to useful advice
while closed to flattery? And how can a boss avoid advice that
is sound enough but is unnecessary, time-wasting, and
therefore a drain on managerial authority? Here is a dilemma
that is hard to solve: how to encourage subordinates to speak
the truth, without losing all discipline and encouraging
continual griping on minor issues?
Does the reader believe that structured methods of
collecting comments are effective?

121
I know of one company that uses the
suggestion box very effectively. A committee
reviews the comments. Many are irrelevant,
and are discarded. But consistently, year after
year, some comments result in significant
operational changes and increased profitability .
In this company, an employee who makes an
accepted suggestion receives a financial rewar d
related to the amount of increased profitability .
Machiavelli again:
Consequently, a wise boss must find another
way: surrounding himself with wise people, and
giving them, and only them, the right to speak
the truth, and only on those topics that he has
chosen; but he must ask them about all
matters, and then listen to their opinions and
reflect on them by himself.
With these people he should act in such a
way that they know that the more freely they
speak on the topic he wishes them to speak on,
the better they will be accepted. Outside of
them, he should not listen to anyone, nor
second-guess firm decisions, and he should
stand by his own decisions. Those who do
otherwise will either fall prey to flattery, or will
change their minds often because of the
existence of many opinions; this wavering

122
 creates a low level of respect for the boss .
(XXIII-2)
That is, managers must maintain a certain distance from
subordinates, and must be wary of rewarding only those
subordinates who always agree with them. Can the reader
think of managers who have gotten into trouble by falling prey
either to flattery or to excessive familiarity with subordinates?
How does this trap differ from consulting a trustworthy staff?
I know one very talented manager whose
effectiveness is severely limited by his inability
to avoid flatterers. This individual's
subordinates are always "yes-men," with no
skills or ability to do anything except say yes .
As a consequence, the manager has to do
himself all the work that his subordinates
should be doing. Although he is very good, no
one person can be as good as an effective team,
so the performance of his department is not
what it should be.
As Machiavelli says:
A boss, ther efore, must always obtain advice,
but when he wants it, and not when others want
to give it; indeed, he must discourage everyone
from giving him uncalled-for advice. But the
boss must ask for advice often and br oadly, and
patiently listen to the truth r egarding the topics
he has asked about; indeed, he should become

123
upset if he notices that someone, out of r espect,
is not speaking the truth.
Now, many think that a boss who is held to
be wise might have that reputation not because
of his own nature but because of the good
advice that he receives. There is no doubt that
such people are mistaken. For the following
general rule is never wrong: a boss who is not
wise on his own account cannot be advised
well. The only way he could be advised well
would be by delegating all decisions to one very
wise person. This could happen, but it would not
last long, because the wise person in a short
time would take the boss's place.
If a boss who is not wise takes advice from
several persons, he will never get consistent
advice, and will be unable to impose
consistency himself; each advisor will think in
his own way, and the boss will not understand
and will be unable to integrate them.
It cannot be otherwise, because people will
always treat you badly, unless they are forced to
be good.
Therefore we conclude that good advice, from
whomever it comes, must grow out of the
wisdom of the boss, and that he wisdom of the
boss cannot grow out of good advice. (XXIII-4)

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The best managers I know are people who know
what questions to ask. This is their technique
for soliciting honest advice.
I have never met an effective manager who
asks for general, unstructured advice. Nor have
I known a successful boss who relies on a single
advisor.
Recently, a business newspaper reported on
the expensive failure of a large and well-known
company to develop a ew type of compressor .
Senior executives did not receive low-level
reports on problems.
Says one top-manager now, in retrospect:
"I'd have gone and found the lowest damn level
people we had ... and just sat down in their little
cubbyholes and asked them 'How are things
today?'"

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 2 1. On Holding Power

The above precepts, correctly observed, make a

new boss appear seasoned and wise, and make
him quickly more secure in his position than if
he had been there a long time.
For the actions of a new boss are mor e
closely watched than those of an old boss, and
when they are seen to be wise, they inspir e
people more than past actions. Because people
are more concerned with the present than the
past, and when they find good in the present,
they are happy and do not seek further. (XXIV-1)
Machiavelli recognized the fact that bosses are judged by
their subordinates for present performance alone. Employees
are not much impressed by a boss's past triumphs, if he cannot
deliver the goods today. Indeed the human race judges most
individuals in this way. That hard fact causes some resentment
including bitter jokes like "Yesterday you saved my life, but
what have you done for me today?" Yet this psychological bias
is an inescapable truth in human experience. Past performance
may bring medals or honorary degrees, while only present
performance evokes confidence among superiors, peers, and
subordinates.
A boss that loses his power should not blame
bad fortune, but rather his own incompetence.
Indeed, if during good times he never thinks

126
 that times might change (and this is a common
failing of people: to neglect possible storms
during periods of calm weather), when adverse
times come, he will run away instead of
defending himself. (XXIV-3)
In other words, the time to start contingency-planning for
the worst case is when things are going well. Once things
degenerate, you will have no time to prepare counter-
measures. Have you been in an organization confronting
changing conditions?
Industrial history is filled with examples of
failures to prepare for change. In USA in recent
times, Big Steel; the Big Three auto makers; and
many computer companies including Wang,
IBM, and Digital are prime examples. On the
other hand, some defense contractor s
apparently made plans, before the end of the
Cold War, to cope with potential reductions in
defense spending.
A book publisher has told me of the impact
of revolutionary developments in printing
technology since the 1950s - he calls these the
"most fundamental changes in the five
centuries since Gutenberg invented printing in
the 1450s." Letterpress impressions from heavy
metal plates gave way to photo-offset
"kissing" from expendable plates, while

127
typesetting was replaced by computer
composition. The few publishing managers who
had prepared themselves (and their companies)
for the changes had an edge over the
unprepared majority.

128
 22. The Role of Luck in Human Affairs , and How
to Channel It

I believe it might be true that luck is decisive in

half of our actions, but nonetheless we ar e
masters of the other half. (XXV-1)
Fortune shows her power where there is nothing
to resist her, and turns her strength wherever
she knows that there are no dikes or dams to
impede her. (XXV-3)
While the precise allocation of luck and skill in successful
ventures is difficult or impossible to make, Machiavelli's 50-50
split is considered a good rule of thumb by many historians.
Machiavelli uses the image of building dikes or dams against
torrents as an example of channeling bad luck. Regarding
good luck, Shakespeare also uses a watery image when he says,
"There is a tide in the affairs of men, which, taken at the flood,
leads on to fortune." Dutch farmers used dikes to protect their
farms against unlucky flooding from the sea, while Dutch
explorers and traders took advantage of flood tides when
setting sail of voyages of discovery. Can you think of situations
where success was due to correct exploitation of a piece of
good luck?
Examples of success growing out of a
combination of luck and know-how are legion.
One case from the computer industry. A
company made a great piece of hardware, but it

129
was too expensive for the intended application.
Then Independent software houses discovered
that the high-resolution screen display of the
machine could be used in new and imaginative
ways to improve the human interface of their
software.
Sales of the machine took off, and it became
the standard hardware platform for that type of
application. The company cleverly exploited this
piece of good luck by realigning their marketing
and positioning themselves as THE company in
that field of activity.

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 23. On Organizations That Need Leadership

I know an organization where there is great

quality among the employees, but not among
the managers.
Compare these employees individually with
competitors, and you will see how superior they are
in knowledge, skill and intelligence. But, when
compared as an organization, they cannot hold up.
This is entirely due to the weakness of the
management, because those who know
something are not obeyed, and everyone thinks
he knows best. Up to now there has not been
someone who knew how to stand out and use
skill and luck to assume leadership. (XXVI-4)
Every sports fan knows that two-dozen superstars do not
make a winning team without a strong coach. Conversely,
strong coaches have been known to knit so-so players into an
unbeatable team through the magic of leadership. Have you
seen this happen in business?
The most successful leaders are both task-oriented (concerned
with results) and employee-oriented (concerned with people),
according to research by Robert Blake and others.21 Machiavelli's
analysis of his experience reached the same conclusion.

21 Robert R. Blake, Jane S. Mouton, Louis B. Barnes, and Larry E. Greiner,

"Breakthrough in Organizational Development," Harvard Business Review

(winter, 1964)

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 Pos tscr ip t:
Machiavelli's Life and Times

I. Machiavelli's Life
Niccolò Machiavelli was born in Florence, on May 3rd, 1469.
His family was of noble stock and had its ancient origins in the
small town of Montespertoli.
Niccolò started writing comical poems and songs in his
youth, showing already that lack of concern for prejudice and
convention, and that ability to observe the world as it is, that
would reach its apex in Il Principe. Humanity should not fear,
he wrote, "as if the world to its end was near" "for when the
devil for real you see/with fewer horns, and not as black is he".
In June 1498 Niccolò was appointed head of the Second
Chancellery of the Secretariat of the Republic of Florence. This
office acted as the ministry of war and internal affairs, and
reported directly to the ruling council. Republican leaders had
regained power in Florence in 1494 after almost a century of
rule by the Medici family.
Marcello Adriani, Secretary of the Republic, was an
academic, more interested in oratory than in practical affairs,
so young Machiavelli had considerably more freedom and
power than would have been normal in his subordinate
position in the Secretariat.
For the next fourteen years he served the republic faithfully
and energetically. When he was part of a foreign embassy, he

132
was often a non-speaking observer, preferring to let others do
the talking, while he watched and learned.
In 1500 he travelled to France, to the court of Louis XII, to
report on some unrest among the King's mercenary troops in
Italy. He visited France three more times, after 1504, writing up
his observations in the short pamphlets De Natura Gallorum
and Ritratto di Cose di Francia. As in his youthful writings, he
observed and reported on reality, with no regard for anyone's
pre-conceived notions; the French, he wrote, "are most humble
when fortune is against them, and insolent when fortune is in
their favor."
In 1502 Niccolò was sent twice as envoy and observer to
Cesare Borgia. Cesare's methods for increasing his power
fascinated Machiavelli; he described them in the Descrizione del
Modo Tenuto dal Duca Valentino nello Ammazzare Vitellozzo
Vitelli, Oliverotto da Fermo, il signor Pagolo e il Duca di Gr avina
Orsini. We find these observations again, later, in Il Principe.
In 1506 Machiavelli was in Rome, envoy to Julius II. This
strong-willed and powerful Pope also earned Niccolò's
approval and admiration. The following year, he visited the
court of Emperor Maximilian, and spent some time among the
noblemen of the Tyrol valley, whose frugal habits he praised in
the Ritratto delle Cose della Magna .
From 1505 to 1507 Machiavelli was secretary of the Nove
della Milizia, the body in charge of recruiting and arming local
citizens, in order to avoid having to depend on the unreliable
and rapacious mercenaries of the time.

133
 The year 1512 brought the Medici family back into power in
Florence. Faithful servants of the republic were dismissed from
office. Niccolò tried hard to stay in power, but in vain. Not
even his great book, Il Principe (1513), was enough to impress
the Medicis.
He retired to a house in the country, and devoted himself to
writing. First the Discorsi sopra la Prima Deca di Tito Livio , then
Il Principe and the Dialoghi dell'Arte della Guerra. Later, he
wrote the Vita di Castruccio Castracani, a biography in which
Machiavelli projects his own ideals. The Istorie Fiorentine were
commissioned by Giulio dei Medici, who would become Pope
Clement VII, and were composed between 1520 and 1524.
In his own time, Machiavelli's historical and political essays
were not well received, but he became well known as the
author of the comical play the Mandragola (1520), a satire in
the best classical tradition. Even more popular was Clizia
(1525), a play openly derived from Plautus.
Niccolò Machiavelli died on June 20, 1527, at the age of 58.

II. Machiavelli's Times

Turbulence, war, and homicide are the words that best
characterize the world in which Machiavelli lived.
At the time, Italy was divided into numerous small states,
each competing with the others for territory and power. Strong
foreign armies from France and Spain intervened in the affairs
of these petty states, increasing the turbulence. The two great
powers fought each other, on Italian territory, for hegemony

134
over the rich and populous kingdoms of Naples and Sicily and
for control of the independent cities of the North, Milan in
particular.
Bands of mercenaries roamed the country, pillaging, raping,
and murdering when they were not fighting, and when their
leader, the condottiere, was not trying to establish himself as
the head of one of the petty states by usurping the power of
the previous head. Keeping control of an Italian city-state
required strong leadership.
The Pope tried to extend his own domains, continuing the
centuries-long struggle with the Holy Roman Emperor for
nominal sovereignty over Italy. Fierce Swiss mountaineers
descended into the fertile Italian plains to conquer portions of
them for themselves. Only Venice remained above the turmoil,
safely isolated by the lagoons between it and the mainland,
participating in the Italian wars only when it was to her
advantage. Thus Venice was the commercial gateway from Asia
to Europe.
In spite of, or because of, the political turmoil, great artists
flourished, and produced works that we cherish to this day.

135
A few key events:
1494 Charles VIII, King of France, invades Italy,
and the Medici, rulers of Florence, are expelled.
The Republic is proclaimed. Charles conquers the
Kingdom of Naples, but is soon forced to
abandon it by a league comprising the Pope, the
Emperor, King Ferdinand of Aragon, and others.
1497 Leonardo da Vinci paints the Last Supper.
1498 The Dominican monk Girolamo Savonarola,
demagogic leader of the democratic party in
Florence, is excommunicated and burned at the
stake. Charles VIII, King of France, dies and is
succeeded by Louis XII. Machiavelli starts his
political career.
1499 With the aid of French troops, Cesare Borgia,
son of Pope Alexander VI, becomes Duke of
Romagna.
1501 Michelangelo Buonarroti sculpts the David.
Louis XII, King of France, and Ferdinand, King of
Aragon, conquer the Kingdom of Naples.
1503 Pope Alexander VI dies and is succeeded by
Julius II. End of Cesare Borgia's power.
1504 Death of Isabelle, Queen of Castile. French
expelled from Naples. Ferdinand of Aragon and
Castille assumes full power.
1505 (approx.) Leonardo paints La Gioconda
(Mona Lisa).

136
1506 Bramante designs the new Basilica of St. Peter
in Rome.
1508 Michelangelo starts to paint the ceiling of the
Sixtine Chapel. Raphael Sanzio starts to
decorate the Stanze in the Vatican.
1509 Henry VII, King of England, dies and is
succeeded by Henry VIII.
1510 The Holy League is formed by the Pope, King
Ferdinand of Aragon and Castille, and others, in
order to expel the French from Italy.
1512 The Medici return to power in Florence, as a
result of the victories of the Holy League.
Machiavelli's political career ends.
1513 Pope Julius II dies and is succeeded by Leo X, a
Medici. The Swiss defeat the French at Novara.
1514 Death of Bramante.
1515 Louis XII of France dies and is succeeded by
Francis I. Francis I defeats the Swiss at
Marignano and conquers Milan.
1516 Ferdinand, King of Aragon and Castile, dies and
is succeeded by his son, Charles I (later Emperor
Charles V).
1519 Death of Leonardo. Death of Emperor
Maximilian. He is succeeded by Charles V.
1520 Death of Raphael.
1521 Emperor Charles V claims Milan, and starts a
long series of wars with Francis I, King of France.

137
1525 Francis I defeated and captured at the battle
of Pavia.
1527 The Medici are again expelled from Florence.
Michelangelo, elected member of the Nove delle
Milizie, works on improving the fortifications of
Florence. Machiavelli dies.

138
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 THE FALL OF UBS
The Forces That Brought Down Switzerland's Biggest Bank
Dirk Schutz
ISBN 0-944188-20-6
"UBS CEO's Fall from Grace Tells a Tale of Euroland" Wall
Street Journal

"Why did Cabiallavetta, the CEO of the Union Bank of

Switzerland, agree to such a deal?" asked The Economist on
January 31, 1998. The deal was a merger between UBS and
Swiss Bank Corp., a smaller rival. One reason, The
Economist speculated, was that there was, "in UBS's London
based derivatives business, a hole of unknown (but possibly
huge) proportions."

What happened at UBS is a complicated story involving

power, ambition and vanity. It shows that risk management
controls in the largest of the Swiss banks had not extended far
enough from the experience. And the responsibility for the
failure falls principally on Cabiallavetta.

Essential reading for business and finance professionals: a

complicated story of power, ambition, vanity and a lack of risk
management controls at one of Europe's largest banks.

A bestseller in Europe : already over 35,000 copies sold. No.

1 on bestseller list in Europe for seven months !

140
 AIR GUIDE for the Frequent Flyer
The Official Guide to the World's Airlines and Airports
Edited by Aram Gesar
ISBN 0-944188-14-1
"Air Guide is a new one stop source for travelers seeking basic
facts on more than 100 of the world's major airlines and
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International Herald Tribune

The Air Guide is filled with tips and advice and provides the
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Air Guide provides indispensable, up to date information on

air travel and over 100 international airlines and airports,
including travel tips and advice, airline ratings and reviews.
Air Guide is the first of its kind. This guide is the one to have
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141
Who’s hot and who’s not in the air?

Who’s got the best check-in, the best seat,

the best food and wine, the best website?

All seats are not (air)born(e) equal, some

seats are more equal (180 degree recline)
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All the air travel info you want and need when
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AIRGUIDE MAGAZINE & AIRGUIDE ONLINE

The Best Source for Air Travel
Created for a global audience of frequent flyers, business travelers,
corporate travel buyers and travel agents.

Tel: +1 530 451 9405 | Fax: +1 320 215 1698

[email protected]
www.AirguideOnline.com
 THE INTERNET TRAVEL GUIDE
Surf the Web and Travel Right.
Edited by Kimberley A. Strassel
ISBN 0-944188-17-6
Here's the guide to launch you into cyber travel space. How to
navigate the web to make all your travel arrangements and
save time and money.

The Internet Travel Guide presents the best in combining

travel and technology. Instead of suffering through the
formidable information in travel cyberspace this book will
guide you to the sites that offer clear, concise and essential
data.

Travelers now have instant access to a rapidly expanding

galaxy of user-friendly systems that allow to plan and book all
their travel simply by pointing and clicking with a mouse. This
timely guide will give hands-on advice on how to make the
best use of the Internet to navigate the travel Web sites easily
to save time and money, plan and book one's own travel, book
airline tickets, air taxi, helicopter, hotel rooms, rental cars,
cruises and casinos, check for deals and steals.

About the author : Kimberley A. Strassel has been the

assistant editorial features editor for the Wall Street Journal.
and for the Wall Street Journal Europe.

142
WHO ?
WHAT ?
WHERE ?
WHEN ?
WHY ?
Today, the_right_answers are
more_important than_ever.
They can_change_your_business.

INFORMATION SERVICES
For Market & Business Intelligence
A comprehensive sourc of business intelligence and information on travel and air transport for global
corporate professionals to gain critical advantage in their daily communication and business activities.
Our experienced team of international professionals play a vital role in providing senior executives with information and
analysis on the fast-changing internatinal business climat. We provide hard information through our surveys of corporate
performance and developments. Perhaps most importantly, we provide ideas about how the industry will shape up in the
future helping our clients to stay ahead and make more informed decisions about their business opportunities.

Pyramid Media Group

+1 212 541 5530
[email protected]
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 ORDERING INFORMATION
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144
Reach the most important people in the
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A powerf u l audience of frequent flyers,

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Corporate travel spending topped

U S$200 billion in 2002.

The need to reach this valuable m a r k e t

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AIRGUIDE MAGAZINE & AIRGUIDE ONLINE

The Best Source for Air Travel
Created for a global audience of frequent flyers, business travelers,
corporate travel buyers and travel agents.

+1 212 541 5530

[email protected]
www.AirguideOnline.com