For fans of Shakespeare, our blog is taking a literary bent again. Our first Shakespeare post related the lessons from King Lear. Now we turn to Hamlet. We all know that one of the biggest struggles of a family business is surviving succession. According to Lloyd Steier, Professor in the Department of Strategic Management and Organization at the University of Alberta School of Business and Director of the Alberta Business Family Institute, William Shakespeare’s writings are inspirational in presenting strategies for survival, or consequences of ignoring those strategies. “Shakespeare offers us eternal lessons and shows us that these issues have been around for hundreds of years.” For his analysis, Steier labels the next generation in family business succession as the “curious” generation, offspring of the family leaders who are not necessarily wedded to the roles that are expected of them.
Steier cites the experiences of modern family businesses as illustrations of Shakespeare’s legendary writings. The strategy for surviving generational succession that can be drawn from Hamlet is understanding that a family business legacy may continue even if members of the next generation choose to pursue careers elsewhere. In fact, some very successful family businesses require that family members work outside the family business and familiarize themselves with other cultures before they are eligible for consideration for future leadership in the family business. Thus, the curiosity of the next generation is encouraged and rewarded.
The premise of Hamlet is succession to the throne of Denmark, but that premise is analogous to a family business dealing with a next generation that is looking to gain experience outside of their family business. Hamlet, Prince of Denmark, returns from university study and is haunted by the demands of his late father, King Hamlet. The King seeks vengeance against his brother Claudius, who murdered the King before seizing the throne. The pressure from the King drags the Prince into the depths of chaos. Like the King, “parents can put all kinds of pressure on kids to, for instance, take over the family business,” says Steier.
What happens when the curious generation experiences this kind of pressure? Like the Prince, they often attempt to take over the business, not because they want to, “but they do so because they feel this stewardship legacy and obligation,” says Steier. Although acting with good intentions, a reluctant generation may not be properly equipped to meet expectations. King Hamlet expects his son to heroically avenge the newly crowned Claudius and rule Denmark. Yet the Prince, like many offspring of the leaders of family businesses, fails to assume the role his father asks him to play. The truth of the matter is that there are generational differences in aspirations and perspectives, and those differences must be part of any family business’ succession plan.
Hamlet is known for an intense and tragic ending that illustrates what can happen when succession planning is unsuccessful. The business can go off the rails. But your family business can avoid tragedy by accepting the curious generation, their curiosity about the non-family world, and their aspirations. Pressuring them, like the King pressured the Prince, is not likely to achieve success in the long term. Identify and evaluate ways that the legacy of your family business can continue with or without the participation of the curious generation.
Keith Baldwin is a business transactions and securities lawyer with a forty year history of serving clients’ legal needs. Keith focuses his practice on business relationships, including mergers and acquisitions, agreements among owner-entrepreneurs, and best practices for corporate governance. Keith can be reached via email at firstname.lastname@example.org or directly at 425.646.6133.