August 2017 Download this article as a PDF

Q. Does Machiavelli’s The Prince have relevant lessons for modern high-tech managers and leaders?

A. When we think of Machiavellian conduct in technology companies, we think of cut-throat, cunning, behaviour. Cut-throat competition in technological innovations can be the barrier to market entry (Lee, 2014). The lean philosophy is that managers and leaders are to strive for the efficient and effective use of resources in order to overcome this barrier and gain competitive advantage. In order for there to be cut throats, there have to be cut-throat technology innovation leaders and managers. What the lean philosophy lacks is guidance on how to achieve an efficient and effective use of resources in a cut-throat competitive environment. The challenges posed by that type of environment do not go away and cannot be swept under the rug.

But can a 16th-century political treatise provide any guidance on today’s competitive environment? There are two camps among scholars regarding the relevancy of Niccolò Machiavelli’s book The Prince (Machiavelli, 1992) to modern day management and leadership. Some scholars argue that the book has never been or is no longer relevant to business management and leadership (Agbude, 2014; Fournel, 2014; Jackson, 2013; Tillyris, 2015). Some contend that it is indeed relevant (Konno, 2014; O’Sullivan, 2014; Rojek, 2014; Ruggiero, 2015; Soll, 2014; Thomas, 2014). Herein, it is argued that this work by Machiavelli is indeed relevant. In particular, it is widely accepted that leaders and managers are more effective if they have influence. However, Machiavelli has been wrongly associated primarily with the advocacy of vile tactics of manipulation. It is argued herein that The Prince has an over-arching emphasis on the importance of a leader’s or manager’s acquisition and sustenance of influence. A number of modern day examples of how Machiavellian lessons are and can be applied today in the high-tech arena follows.

Modern Day Applications of Machiavellian Lessons

It has been taught that The Prince attempts to separate power from ethics, and that having good character is not sufficient for leadership (Levine, 2014). This type of leader is only interested in being effective, and ethical goodness and effectiveness are not likely to go hand in hand. Individuals that take this view of The Prince may not think the book is relevant to modern day leaders that are under considerable pressure to engage in corporate social responsibility and ethical behaviour. Yet, morality and achieving business results are interconnected. Character is the combination of a person’s moral habits and internalized beliefs that shape his or her relationship to others (Kiel, 2015). Today, character-based business results have been coined “return on character” (ROC) and have been studied. The ROC has been identified as an element of a CEO’s formula for creating value (i.e., processes, products, raw materials in its value chain). Along with ROC, other elements in this formula for success include life experiences, character habits and beliefs, decision-making skills, readiness, and genetic dispositions (Kiel, 2015).

In addition, a few researchers have argued that “Machiavelli writes from the present, about the present, and for the present” (Fournel, 2014). Thus, The Prince would have been written for a Renaissance era audience and would not have been written by Machiavelli with the intention of being relevant to our modern day leaders or managers. Taking this position is in alignment with the belief that the building of character involves internalizing the moral principles of one’s society (Wilson, 1998). Thus, Machiavelli’s character would reflect the moral principles of the Renaissance era. However, others take the stance that there are universal moral principles that people internalize such as integrity, responsibility, compassion, and forgiveness (Kiel, 2015). Such universal moral principles would not be limited to any one society or time period.

There are sages that have argued that The Prince was written for politicians that struggle with “a dirty hand problem”, and that politicians are worse than others (Tillyris, 2015). Thus, through this lens, The Prince would not be relevant to modern day leaders and managers who are not politicians. The dirty hand problem relates to the idea that “in certain tragic circumstances, politicians may be required from a normative and prudential perspective to do or tolerate things that are immoral” (Tillyris, 2015). Proponents of this viewpoint argue that other leaders and managers would not face such circumstances and would not have to tolerate any of the immoral acts that Machiavelli espoused in The Prince. For example, these proponents of The Prince’s irrelevance to leaders and managers embrace how Machiavelli may not favour any innocent aspirations in politics given that such innocence would neglect the realities of power. Innocence would be antithetical to the political experience (Tillyris, 2015).

Tech Business is Political

Some scholars have simply argued that Renaissance Florence is not our modern world and that the political world espoused in The Prince is not the business world today (Jackson, 2013). Other researchers contend that Machiavelli’s teaching that political leaders are to act as beasts seems to be a dangerous proposition for the corporate world to enact (Agbude, 2014). This literal interpretation argues that beheadings would not be allowed today and that politics is cutthroat, unlike business (Jackson, 2013). Yet, to think that business is not as cut-throat as politics is simply naïve. Business can easily be more political and more cut-throat than politics.

Scholars that argue that Machiavelli’s book The Prince is still relevant note that he observed power first hand and how it really works. These timeless power dealings and the notion that ambition can lead to corruption still exist today (Harris, 2010). Machiavelli is a realist who teaches the harsh truth about leading and managing people from a position of power. More importantly, he teaches what leaders need to do in order to hold ground and sustain their power positions with the exercise of good governance (Zuckert, 2014). For example, Machiavelli teaches leaders to: i) appreciate goings on – don’t avoid it, hide from it, or say you are not political; ii) recognize that lobbying is important; and iii) scan the organizational system to assess issues and train staff to cope with change (Harris, 2010).

Heated Legal Disputes

Some savants have pointed out the irony in The Prince and how what Machiavelli condones seems unjust but are his reasons or rationale for justice (Quaglioni, 2014). The word justice never appears in The Prince and some scholars believe that Machiavelli evaluated politics as a power independent of law. However, Machiavelli does indeed mention laws and taxation throughout The Prince, and he teaches that there are two ways of fighting: by law or by force (Agbude, 2014). Reasoning about justice is central to Machiavelli’s ethics and political thought, and his “thought is applicable to all times” (Quaglioni, 2014). Although this application to ethics, laws, and justice is not directly intended for leaders and managers, it is indirectly relevant. And it is relevant today because today’s business leaders and managers fight by going to court and battling out disputes. An example is how Larry Ellison, CEO of Oracle, publicly attacked Hewlett Packard (HP). HP then sued Oracle about trade secrets when Ellison hired Mark Hurd away from HP (Mendleson, 2011).

In a review of Erica Benner’s 2014 book entitled Machiavelli’s “Prince”: A New Reading, it was noted that, in The Prince, there are powerful, reasoned undercurrents of substantial ethical thought, which “nowadays passes for conventional morality” (Connell, 2015). This is ironic. An example is how Machiavelli actually did not praise or tolerate vicious rulers, but rather urged that they be good, pious, and merciful princes (Konno, 2014; Machiavelli, 1992):

“To slaughter fellow-citizens, to betray friends, to be devoud of honour, pity and religion, cannot be counted as merits, for these are means which may lead to power, but which confer no glory.” (Machiavelli, 1992)

An example of a hypocritical leader is Microsoft’s Bill Gates. Although he spoke openly as an advocate for entrepreneurial innovation, he worked ruthlessly to gain an anti-competitive monopoly control over his industry sector and the government went after Microsoft in an antitrust dispute (Kapor, 1998). The US Department of Justice (DOJ) and Federal Trade Commission (FTC) investigated Microsoft in the early 1990s and required Microsoft to sell its Internet Explorer software separately from the Windows operating system. A 1995 consent decree served to stop Microsoft from creating operating system market entry barriers with its intellectual property licensing practices. A 1997 case against Microsoft by the DOJ accused them of violating the consent decree continuing to tie Internet Explorer to Windows, and Microsoft won in 1998 (Burtis, 2001).

Bullies, Hostile Takeovers, and Injurious M&As

Hypocritical leadership is detrimental to a leaders’ relationship with their employees because employees want to be able to trust their leader. Employees pay close attention to what leaders value and the behaviours that the leader rewards, promotions, who gets to work on the best projects, causes that get support, who gains influence with the leader’s support (Markman, 2016). Thus, although a few scholars interpret The Prince as not teaching leaders to exercise virtuous character, other scholars disagree and would argue that it teaches that, in order to be effective, leaders need to be people with virtuous character (Konno, 2014). The Prince is still relevant from the perspective that the methods espoused therein are to be used for political effectiveness. The use of prudence and virtue is not merely for moral, ethical action, but to gain effectiveness (Soll, 2014). It is not uncommon for modern day leaders and managers to strive to be both efficient and effective in their human interactions (Yukl, 1999). In an attempt to be more effective, some modern leaders use cruelty to instill fear in their employees. In the 1950s and 1960s, fear tactics dominated until the shift from industrial to more information-based economies (Snook, 2008).

The irony is that this virtue may manifest itself as being just as ruthless as the technology industry’s Steve Jobs, Meg Whitman, and Larry Ellison are depicted (Konno, 2014). Meg Whitman is notorious for cutting a total of 85,000 jobs as part of a turn-around strategy to save the HP brand (Darrow, 2016; Tobak, 2015). Apple’s Steve Jobs was reportedly controlling and ruthless, had strained relationships with employees, instilled fear and control over employees, was obsessively secretive, ruled with an iron fist, and pushed products out before they were ready (Gibbs, 2014; Mendleson, 2011; Tate, 2011). Larry Ellison, the CEO of Oracle, is also notorious for cut-throat tactics such as ridiculing the competition and hiring a private investigator to snoop through Microsoft’s garbage (Mendleson, 2011). Like Steve Jobs, Larry Ellison misrepresented facts and told customers that a product was available when it was just a thought and not in the design phase yet (Pfeffer, 2014). In the early 1990s, Ellison also misrepresented Oracle’s actual sales numbers in financial filings. In addition, he is known for his ruthless, aggressive hostile take-over manoeuvres (Nisen, 2012). Oracle made two hostile takeover bids for Peoplesoft and the US Department of Justice had to step in to address antitrust concerns resulting in the 2004 merger of the two companies (Weinberger, 2016).

A lesser known Machiavellian-type CEO is Mark Pincus of the computer games company Zynga. Pincus reportedly obsessively tracks analytics for all staff, sets harsh deadlines, and aggressively pushes his employees to meet them (Nisen, 2012). There is also former Microsoft CEO Steve Ballmer who is known for his temper. Given that Microsoft has lost to Google and Apple in the iOS and Android tech spaces, when the former Microsoft employee Mark Lucovsky announced he was leaving Microsoft for Google, Ballmer threatened to “kill Google” and hurled a chair across a room (Enderle, 2014; Nisen, 2012). There is irony because Machiavelli teaches on the one hand that leaders that act in the name of virtue will be destroyed, but encourages princes to use vice if to gain security and prosperity (Ruggiero, 2015). Machiavelli taught to only be harsh if necessary (Kessler, 2010). This is exactly how some modern leaders operate and therefore, The Prince is indeed relevant to modern day leadership.

Some scholars have taken the viewpoint that any reference to the cruelty indicative of the Renaissance era in which Machiavelli lived simply does not apply in a modern western democracy. Yet, the lessons about human interaction remain relevant and enduring (Corrow, 2014). Further, it would be quite easy to view references to cruelty in The Prince metaphorically today. For example, references to the viciousness of war and combat are commonly compared to cut-throat business competition today (Galie, 2006). For example, automaker Volkswagen’s CEO Martin Winterkorn fostered a corporate culture that was cut-throat and insular (Dishman, 2015). Winterhorn reportedly called employees out with public criticism and pressed employees for perfectionism. This is believed to have led to the faulty reporting of vehicle emissions (Fortune, 2016). An example of one of the largest high-tech hostile takeovers was integrated circuit designer Daisy Systems of Mountain View’s offer to buy 11.7 million shares of Cadnetix, the creator of equipment for designing circuit boards that hold the chips (Frantz, 1988). This was a $94 million deal. Daisy Systems then went by the name Dazix, suffered financial losses and filed for Chapter 11 bankruptcy. Then Integraph bought it for only $14 million (Frantz, 1988).

CEO cut-throat behaviour occurs in the biotechnology sector as well. In 2014, after peaceful negotiation attempts, Pfizer proposed to acquire AstraZeneca with an unsolicited $119 billion bid, and Valeant Pharmaceuticals waged a $53 billion hostile take-over Allergan (Gelles, 2014). Valeant’s CEO Michael Pearson misstated financial results and was applauded for marking up drug prices and vilified for it as well because of shady tactics used to get customers to buy such drugs in the Philidor mail-order business (Fortune, 2016). In addition, the former CEO of Turing Pharmaceuticals Martin Shkreli was indicted for his business strategy of buying cheap drugs and selling them at outrageously marked-up prices (Dishman, 2015; Fortune, 2016).

Besides hostile take-overs, there are also high-tech mergers that result in ruthlessly depressed share prices and layoffs. In 2015, Dell bought EMC for $67 billion and Microsoft bought Linkedin for $26 billion (Weinberger, 2016). The Dell/EMC merger is now expected to result in 28,000–35,000 layoffs, although the original expectation was 2,000 (Mellor, 2017). The AOL/Time Warner merger resulted in 2,000–2,500 layoffs (Schiesel, 2001) but ultimately did not work out, and AOL was spun back out in 2009. When HP merged with Compaq in 2002, it resulted in 30,000 HP employees being laid off. Later, HP merged with EDS in 2008, which has resulted in a number of layoffs from 2008 through 2016 (Darrow, 2016; Weinberger, 2016). Machiavelli taught that leaders must follow up after conquests by figuring out how to deal with the lack of support that will follow if the leader gets rid of individuals that might cause them trouble (Machiavelli, 1992). Although, with mergers, the decision to lay off thousands of workers is a business decision to avoid financial trouble, the layoffs create enemies and bad press. Thus, per Machiavelli, leaders have to figure out how to deal with this diminished support.

Infliction of Cruelty – Balance and Blows

Machiavelli’s teachings provide an “appropriate picture of recent and societal and commercial leaders” (Thomas, 2014). According to the lessons in The Prince, the use of cruelty and fear are more effective than compassion (Thomas, 2014). This is the harsh reality of how many modern day leaders operate from the standpoint of attempting to be more effective in their leadership roles. Although harsh and ruthless and truly the way of the world, Machiavelli teaches balance. Some modern leaders strive for balance. They may start out with an urgent entrepreneurial spirit to drive hard and become powerful, and then over time mellow out like former Microsoft CEO Bill Gates and Michael Dell of Dell computers (Tobak, 2014).

When subordinates do not get their way or experience perceived or real deprivation, they label the leader cruel. Machiavelli teaches that a leader should inflict cruelty all at once and not persistently in a well-employed manner if necessary for self-preservation and later modify it to the advantage of the governed subordinates (Machiavelli, 1992). Modern day examples of such poor execution of cruelty include HP’s CEO Meg Whitman’s serial layoffs rather than one large cut in staff at once (Darrow, 2016). Yahoo’s CEO Marissa Mayer is also notorious for series of layoffs (James, 2016). Machiavelli teaches that ill employed cruelty is cruelty that advances over time from small beginnings and increases rather than diminishes. He also taught that a leader or manager that seizes possessions (in this case jobs) will have enemies in all of the individuals injured. Further, Machiavelli also espoused that the leader or manager would not be able to keep the friendship of those who helped them gain the position seized because the leader or manager cannot reward them as they might expect or injure these helpers (Machiavelli, 1992). This occurs when there are layoffs. The individuals who may have originally been helpers and helped these new CEOs get their positions of power, may lose their jobs.

Securing Goodwill and Social Influence

Banker Mervyn King, formerly with the Bank of England, agrees that The Prince offers lessons for today’s rulers. Having served under three British prime ministers, King argues that Machiavelli’s teachings, especially the lesson about securing the goodwill of one’s inhabitants, is still very relevant today (Hamilton, 2014). Machiavelli’s influence is evident in his name being used in common parlance today in the spillover of his writings into business management (O’Sullivan, 2014). With respect to securing goodwill in order to keep key personnel from leaving, CEO Marissa Mayer gave them sizable retention bonuses. However, this attempt to secure the goodwill of key employees backfired because the other employees resented it (James, 2016).

The resentment and making of enemies were also espoused by Machiavelli. He taught that, when making changes, seizers of possessions would have enemies among all who were well off under the existing order (Machiavelli, 1992). In addition, Machiavelli espoused that leaders who take over by seizure need to make themselves respected and obeyed (Machiavelli, 1992). Respect and obedience are earned. Where there are resentment and enemies, respect and obedience are likely difficult to come by. Thus, Machiavelli also taught that since subordinates may lose their patience and loyalty, the leader should always hold out hopes to subordinates that any enemy cruelty in retaliation will be short lived and any complainers will be silenced (Machiavelli, 1992). Further, he taught that the leader needs to make sure that subordinates are well fortified, supplied, and armed (e.g., in business, it would be with knowledge, skills, abilities, financial resources, office space, comfort, equipment, hardware, software, and the like), for it is difficult to be attacked by enemies if the enemies’ domain is well fortified (Machiavelli, 1992). This diminishes subordinate animosity toward the leader. Yet, this is a balancing act, because Machiavelli advocates that benefits should be conferred to subordinates little by little so that they are more fully relished by the subordinates (Machiavelli, 1992).

Further, modern day leaders and managers strive for influence. Influence is a buzzword in modern business management and leadership. Many strive to gain influence through social media marketing and networking. Examples include: i) former Sun’s CEO Jonathan Schwartz with his use of open debates via Internet blogging; ii) Toyota’s CEO Jim Lentz using social media to openly address questions regarding Toyota’s recall of 2.3 million vehicles for faulty brakes; and iii) IBM’s support for its employees’ technology blogs (Stansberry, 2010). The idea is that the larger a leader’s or manager’s following, then perhaps the greater their influence on others. Thus, the notion of influence is related to Machiavelli’s teachings about how to hold ground and sustain a power position once it is acquired. Influence can help leaders and managers sustain their power positions. Modern day scholarship about gaining celebrity status has recognized The Prince as providing expertise in managing fame and self-promotion in today’s celebrity culture (Rojek, 2014). His prince-like figures wielded an incredible amount of representational influence and fame. The princes were to display symbolically the public appearance of goodwill, and per Machiavelli, this was to be genuine goodwill. However, Machiavelli has been characterized as being manipulative and teaching manipulation. A real-world example of too much self-promotion at the expense of the company is Yahoo’s CEO Marissa Mayer’s alleged concern with her own brand image rather than Yahoo’s (James, 2016).

Both influence and manipulation produce an effect in another person without force (James, 2013). To manipulate is to have control over others’ behaviour and actions by influence – by artful, unfair, insidious means, by playing to fear, and for self-interest (James, 2013). Influence is more positive than manipulation because it emanates from moral, spiritual roots – via charisma, admiration, considering the needs of others (James, 2013). Without virtue or prudence, cunning and malice lead to manipulation (Soll, 2014). Thus, influence needs virtue and prudence. This is advocated by Machiavelli in The Prince.

Additional Machiavellian Lessons

Niccollò Machiavelli also taught that a leader or manager who seizes possessions must remove old familial lineages of leadership (Machiavelli, 1992). This may occur when a family-owned startup company is purchased by another company. The original family of leaders may have to step down from their positions of control. Machiavelli also taught that, when a seizure of possessions is being executed, the leader should send in support colonies of individuals as keys of the organization in order to deprive a small part of the community of possessions and leave the scattered remaining individuals quiet and afraid to make a false move lest they will share the same fate of deprivation (Machiavelli, 1992). In addition, he taught that seizers should lay foundations before acquiring possession of a built organization or do so later at great inconvenience, risk to the builder, and risk to the building. The foundation is laid by knowing the individuals who must be conciliated or crushed (Machiavelli, 1992). An example of this is layoffs. However, under Machiavelli’s strategy, Meg Whitman and Marissa Mayer would have had a different leader begin the process of layoffs before Whitman and Mayer became CEOs. In fact, this actually did occur at HP. Prior to Whitman, Mark Hurd cut 15,200 jobs in 2005 (Tobak, 2015).

In The Prince, Machiavelli stated that the seizer should make themselves the head and protector of feebler neighbourhoods and endeavour to weaken the strong and not let anyone as powerful as themselves enter the organization (Machiavelli, 1992). An example of this in the modern day high-tech arena would be a company leader or manager who does not give their stronger employees authority or resources, or who chooses not to hire anyone who is stronger than themselves with respect to knowledge, skills, abilities, and clout.

Machiavelli also taught that a seizer should find discontented individuals who are desirous of change who will be able to open the way for their conquest (Machiavelli, 1992). This occurred at HP when the Board of Directors supported Meg Whitman, an HP board member, on becoming CEO (Yang, 2011). Another related lesson is that Machiavelli taught that seizers need to study whether the changes they want to implement can stand alone; have to be implemented by force; or depend on the aid of others and have to be carried out with resort to entreaty (Machiavelli, 1992). In Meg Whitman’s case, she received the aid of the Board of Directors. Machiavelli also taught that, when nobles help a leader get into office against the will of its inhabitants, that leader must conciliate them by taking them under her protection and treat them well. That leader should also always be on good terms with the people that help them seize the organization (Machiavelli, 1992).

Further, Machiavelli taught in The Prince that those who gain their positions by good fortune with little exertion will need to expend considerable exertion to maintain their position. They have to answer to stakeholders and to be true to their own expectations. Therefore, these leaders are subjected to iterative qualifying, self-imposed, circumstantial, and political assessments and challenges in order to maintain their positions of power and authority over followers (Lansberg, 2007). In the high-tech arena, these tests would shape the stakeholder expectations of leaders.

Conclusion

We need to learn from flawed leaders because many corporate leaders have malicious or corrupt tendencies. Also, when leaders are coercive to maintain power and order, it is viewed as bad leadership because there is a yearning for feel-good stories (Kellerman, 2004). When examining the high-technology business leader examples put forth in this response, it is important to note that these leaders’ characters shape their workplace behaviour and business decisions. The examples are not sufficient to inform whether these leaders have the elements of the ROC magic formula for creating value. Some leaders want to create value plain and simple. They may honestly believe that their decisions are the right choices. Some of the leaders in the examples may be bad actors that are overly ambitious, greedy, and seek to gain at others’ detriment. Many do both by seeking to do right and create value, and act badly in the process. All people display both vile and kind motives and choices (Kiel, 2015; Wilson, 1998). Thus, the nature of character is as complex and varied as the real world. Having strong character requires finding balance so that the leaders’ behaviour promotes the most good (Kiel, 2015). To this end, a leader can be a complex person who is stern, insulting, and also inspiring and caring (Snook, 2008). Machiavelli teaches leaders and managers to manage the expectations of others and to manage the organizational system as a whole community at all times rather than piecemeal and only during crises. He teaches leaders and managers to strive for balance and to weigh the consequences of their actions in a strategic, tactical manner as if they are always in a military warfare stance whether in peacetime or otherwise. His teachings are timeless, and every student of leadership and management can benefit from knowing these lessons, because the reality is that there are individuals and circumstances in the business world that are harsh and ruthless. Leaders and managers need to be prepared to deal with this in an effective and efficient manner.

 


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Keywords: cut-throat competition, Innovation management, leadership, lean philosophy, Machiavelli, Machiavellian, management, technological innovation leadership, The Prince

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