"Mercenaries and auxiliaries are useless and dangerous, disunited, ambitious and without discipline, unfaithful, valiant before friends, cowardly before enemies."
From Chapter XII of Machiavelli's The Prince
In one guise, mercenaries and auxiliaries refer to your subcontractors. As Machiavelli observed, subcontractors have a potential conflict of interest with the contractor who employs them. The subcontractor has no obvious incentive to assist the contractor in its task of satisfying the employer beyond its obligations under the subcontract. This conflict of interests, coupled with the adversarial tendency of the construction industry, tends to leave main contractors exposed.
For example, subcontractor breaches can put the main contractor in breach of the main contract, but where the main and subcontracts are not drafted back to back, or the vicissitudes of dispute resolution produce inconsistent decisions, the main contractor may be unable to recover fully from the subcontractor the consequences of breach.
Unfortunately, Machiavelli's recommendation of total reliance on in-house resources is not a practical option for most modern contractors. The solution may lie with paying closer attention to drafting the contract and subcontract terms, and developing partnering down the supply chain.
The other parallel with mercenaries in construction concerns claims consultants and lawyers. Machiavelli put his finger on it in pointing out that their fee is earned irrespective of outcome. The solution to rapacious advisers is not obvious but, for larger organisations, procuring as much expertise as possible in-house may be part of the answer.
CONTROLLING COSTS
"There is nothing wastes so rapidly as liberality, for even whilst you exercise it you lose the power to do so, and so become either poor or despised, or else, in avoiding poverty, rapacious and hated."
Chapter XVI
Machiavelli is not advocating scrimping for its own sake, but warning against extravagance on the grounds that short-term generosity can lead to long-term rapacity. Prudence is his watchword. An application of it could be quoting too low a price in order to win business, with the subsequent effort to recoup losses or make a profit fixing a contractor with an unenviable reputation for being claims-minded.
PLAYING HARDBALL
"Is it better to be loved than feared or feared than loved? That prince who, relying entirely on men's promises, has neglected other precautions, is ruined. Love is preserved by the link of obligation which, owing to the baseness of men, is broken at every opportunity for their advantage, but fear preserves you by a dread of punishment which never fails."
Chapter XVII
While Machiavelli would undoubtedly have applauded the efficiency gains to be made from collaborative contracting, he would certainly have advocated an initially strong stance to make it clear that coercive tactics will not avail.
The policy is successfully carried out by a well-known subcontractor that negotiates its subcontracts extremely vigorously to obtain favourable terms but, having done so, completes the subcontract works in a cooperative way, not relying upon the advantage gained unless forced to do so.
Be feared: the dread of punishment never fails
Niccolo Machiavelli
ECONOMICAL WITH THE TRUTH
"Those princes who have done great things have held good faith of little account, and have known how to circumvent the intellect of men by craft, and in the end have overcome those who have relied on their word; and men are so simple, and so subject to present necessities, that he who seeks to deceive will always find someone who will allow himself to be deceived."
Chapter XVIII
Machiavelli is not advocating deception as necessary but pointing out that the naively honest tend to come second in this fundamentally dishonest world. As one cabinet minister said, "All politicians lie." It's merely an uncomfortable truth: in construction, as in many other areas of life, strict adherence to the truth may be morally commendable, but it does not necessarily maximise profits.
INNOVATION
"Fortune is a woman, and if you wish to keep her under it is necessary to beat and ill-use her; and it is seen that she allows herself to be mastered by the adventurous rather than by those who go to work more coldly."
Chapter XXV
Times have changed. The pedantic may argue that some women do not respond well to ill treatment, and that Fortune yields to those who woo her, but Machiavelli is here endorsing innovation and warning against inflexibility and over-caution. The 'I' in 'M4I' stands for 'innovation' and the rewards for innovation lie at the heart of Latham and Egan. Structure your contracts to give incentives for inventiveness, especially where the parties' relationship has partnering at its heart.
PARTNERING
"To keep his servant honest, the prince ought to study him, honouring him, enriching him, doing him kindnesses, sharing with him the honours and cares; and at the same time let him see that he cannot stand alone, so that many honours not make him desire more, many riches make him wish for more, and that many cares may make him dread changes."
Chapter XXII
This advice is an employer's guide to partnering techniques, recognising that building solid relationships, giving incentives, and working towards shared interests is at the heart of effective contracting. With only slight changes to the terminology this passage could well form part of an introduction to PPC 2000.
BEST ADVICE
"A wise prince ought to choose the wise men in his state, and giving to them only the liberty of speaking the truth to him, and then only of those things of which he inquires, and of none others; but he ought to question them upon everything, and listen to their opinions, and afterwards form his own conclusions."
Chapter XXIII
As true for today's chief executive as for an Italian Renaissance prince. It is perfectly possible to ask five people on a railway station platform when a particular train runs and to receive five different answers. Similarly, everyone in any organisation from the post boy upwards has ideas, generally inconsistent, as to company policy. At a certain level of management, advice can be heavily influenced by what the recipient wishes to hear rather than the truth. Wise construction managers will be very discerning as to their counsellors and the weight they give to their advice.
Conclusion
The model for Niccolo Machiavelli's prince was Cesare Borgia (1475-1507), whose political methodology was dubious even by modern English standards: Commanded to join him for supper, the well-advised guest made his will first.
Source
Construction Manager
Postscript
Julian Critchlow is a leading construction lawyer at law firm Fenwick Elliott. Email jcritchlow@fenwickelliott.co.uk
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