You can either befriend the Bully or focus her energy on other activities. If the Bully is your subordinate, your challenge is to find a way to use your authority to prevent the Bully from picking on your other subordinates. The worst use of your authority is to bully her, which might prompt her to abuse weaker and less aggressive people. Your authority is better used to help the Bully find alternative behaviors. It is within your capacity to alter - dramatically - the behavior of this difficult person.
DIVERT THE BULLY'S ENERGY ELSEWHERE
Observe the Bully's work to determine her skills. What type of work suits her best? What special training has the Bully received? What are her strengths? Hold constructive conversations with her; probe to figure out what she values about work and what kind of recognition she needs. Don't focus on the bad behavior. Instead, without asking in so many words, you want to find out what will make her feel important.
Use your authority to give the Bully additional, high-visibility responsibility in an area where she can excel. Make the assignment conditional and probationary but a real expression of your confidence. Set Bully up to win by assigning her to projects with others that use Bully's competencies and result in her strengths being recognized. Be patient as Bully tries to adjust.
BEFRIEND YOUR BULLY PEER OR BOSS
If you're being bullied by a peer, don't let the Bully sense that she has successfully intimidated you. Similarly, don't try and bully back. By her nature, the Bully tries to prove herself strongest, so if you escalate the conflict, you're only inviting disaster. Appealing to your boss might prove fruitless. In short, to stop the aggression, you need to befriend the Bully.
To win the Bully over, take a special interest in her work. Be patient; Bullies are not used to people taking an active interest in their life and work. Ask specific questions that you know she will be able to answer about work. Follow her lead. Don't give advice about future actions. Instead, talk about current projects, and ask her how she would like her responsibilities to grow.
If the Bully is your boss, there is no question of fighting back. You are powerless. You can seek help from human resources or others at or above your boss's level of authority, but if your boss is successful or popular, your best approach is to draw on the techniques you would use for a Bully peer. You will become a more skilled communicator in the process.
Respond to your boss's orders like any dutiful employees; you don't want to set yourself up as being insubordinate. Remember your work assignments and confirm them in an e-mail to create a virtual paper trail. Then over-deliver. Keep your work beyond reproach and give your Bully-boss every reason to believe that you care about her success. But don't respond to bullying tactics. Instead, make special note of what's important to your boss. Are there sports trophies in her office? Pictures? Or anything else that would indicate a special interest in what your boss does and how well she does it. Don't be put off by peers accusing you of kissing up. You're executing a proven technique for surviving an abusive boss. When she starts feeling appreciated and important, she will stop bullying you and your peers - something for which they will thank you.