The Consequences of Machiavellian Behaviour and What to Do About It

The Consequences of Machiavellian Behaviour and What to Do About It

So, with Machiavellian managers in an organisation, you have an extra human factor to contend with that can cause problems. At the most extreme end of the spectrum, you hear about psychopaths and sociopaths in senior roles.38 And (sadly) you may find bullies and managers who are racist, misogynistic, etc., and while these corrosive behaviours are being called out more often, they are still not always dealt with as many would like.39

But let's not forget ‘plain’ self‐serving (foxy or Machiavellian) behaviour, which can nonetheless be a key factor when understanding why things didn't go to plan, for example:

• Projects with goals widely thought to be unrealistic, which stakeholders later recognised as an ‘ego project’;
• Where concerns and risks were ignored or downplayed – so that ‘inconvenient truths’ were kept from senior decision‐makers;
• Budgets for risk, compliance, controlling, auditing or assurance activities deliberately constrained to limit independent and objective challenge;
• Shifting responsibility for things going wrong to others (you sometimes hear of ‘Teflon’ managers, where ‘nothing sticks’).

Andrew Wright highlights the importance of being on the lookout for Machiavellian behaviour and some of the factors that can make things worse:

‘My default expectation for staff and managers is that they will work to their best for the organisation's good. However, if I spot that someone is doing something that isn't that or get any sense of silos or factions, I will call out my concerns in no uncertain terms because it leads to all sorts of problems.

The senior managers I especially watch out for are the ones who appear to be unable to take on board feedback and change accordingly or who operate inconsistently upwards compared to more junior staff. Likewise, I am on my guard for senior managers who seem primarily motivated by their career advancement, self‐aggrandisement or greed.

In this latter case, bonus schemes can get in the way. The problem is that the more you “turn up the dial” on bonuses to “make things happen” that no one else could achieve, you start to encourage them to take risks they shouldn't. The pattern is simple and predictable – ask people to move mountains in the short run, pay them a big bonus and then find this has created an enormous avalanche risk in the longer term. It's depressing to see how often boards overlook this only to find, a few years later, “chickens coming home to roost”.’

Mindful of these sorts of risks, and a few years after the financial crisis of 2007–2008, the CPA Canada issued a director's briefing on board oversight of risks.40 It does not directly refer to politics but makes several statements highlighting that even at the most senior levels of an organisation, self‐interest, bias and lacunae can exist:

‘There are valid circumstances in which boards must take a leadership role in assessing risk. For example, a primary risk might be an ill‐advised strategy or a failure to execute strategy. How does management critically evaluate the very strategy it developed or objectively assess its ability to execute?

Similarly, the quality and effectiveness of an enterprise's leadership, including the chief executive officer, can pose a major risk. How is it possible for management to assess itself?’

The UK Walker review after the 2007–2008 financial crisis highlighted a related problem: board discussions being dominated by a successful CEO/CFO, making it hard sometimes for the board to slow down and think through the risks of different proposals. This is why the review highlighted the importance of independent board effectiveness evaluations.41

Also, the UK code for internal auditing has highlighted for several years that assurance over the information presented to the board and executive should be seriously considered in the audit planning process.42 This scrutiny could also have a deterrent effect; if a senior manager understood that a project forecast would be ‘pressure tested’ before it went to the executive or board, any attempt to ‘finesse’ forecasts or downplay risks might be thought about more carefully. However, from my vantage point, it appears only a few organisations have used this and similar techniques as a means of systematically ‘cleaning up’ what is presented to the executive and the board.

When regulators and managers refer to ‘a poor tone at the top’ or ‘a toxic culture’, they may be describing self-serving leaders and the governance arrangements that fail to constrain them.