www.SantiagoIniguez.com, Dean of IE Business School

An old father wishing to retire summons his descendants to announce how
his properties will be distributed. His plans consist of transferring
his businesses, achieved after a long and laborious existence, while he
is still alive. The beneficiaries will be his children, who -he is
convinced- will continue his legacy and further expand it. In doing so,
he acts according to his own principles, respecting tradition and
trying to being fair to each but without prior asking his successors
about their wishes and aspirations. To his surprise, he learns that one
of his daughters rejects her assigned inheritance and rather prefers to
look after her ailing father. Shaken by the news, he reacts angrily and
not only strips her of everything but even expels her out of the family
domains.

Does the plot sound familiar? It is, as you have correctly guessed,
the beginning of King Lear, one of the greatest tragedies of
Shakespeare. However, similar episodes happen more than expected at succession times of many other family businesses.

I wonder if, when you first read Shakespeare’s play, you judged King
Lear’s attitude towards Cordelia, his selfless daughter, as an
overreaction, as I did. He mistakes ingratitude for generosity, an
error that subsequently causes a tragic sequence ending in his ruin and
solitude. His other two daughters, who pretended to respect his desires
and to care about him, leave him in abject poverty.

Interestingly, I have found that some business founders –few, I
hope- think that an offspring’s refusal to work at the family business
is a sign of ingratitude. I remember an unfortunate fellow who, on
finishing his MBA, declined his father’s job proposal and explored
other opportunities in consultancy. His father not only opposed him but
even tried to dissuade potential recruiters from hiring him. A cruel
action, but his parents believed they were doing their best in helping
their son’s future; an example of “King Lear’s blindness syndrome”.

Succession is a key time at family businesses and experience shows
that parents should not take for granted what their descendants want to
do as professionals. Property and management are two spheres that are
often confounded in the realm of family businesses. Company heirs
should ideally decide whether to unite both functions or leave
executive positions for the more competent and willing. At the same
time, second and ulterior generations of family businesses may do well
in collecting outside managerial experiences before they rejoin the
family company.

One of the enjoyable characters of Shakespeare’s tragedy is
represented by The Fool, the only one that dares to tell the truth
about family matters openly, even defiantly, to his King. Strangely
enough, Lear listens to him but is not moved enough to reverse his
original, mistaken decisions. The Fool plays the role of best advisors
to top management. In Lear’s age, only jesters could advise objectively
and independently. Fortunately, organisations have become more
democratic and advisors do not need to pretend they are foolish to say
what they believe, or do they?