What Entrepreneurs Can Learn From HBO’s ‘Succession’

Entrepreneurs Can Learn From HBO’s ‘Succession’ – HBO’s succession centered around Logan Roy—an archetypal patriarch in declining health who runs his family and business with a cold iron fist—and his four dysfunctional children: Kendall, Roman, Shiv, and Connor. The family owns a controlling stake in Waystar RoyCo., a media conglomerate that may have been privately owned by Logan Roy that is now publicly traded. While completely fictional and full of over-the-top drama, the series focuses on a very real dilemma many entrepreneurs face: what happens to the empire they build when they retire or die?

Business succession planning can be complex and requires a lot of attention and advanced planning to be carried out effectively. Also complicated is wealth succession and inheritance succession planning. The problem is that business, wealth, and inheritance are too often combined into one big problem.

Business succession planning involves caring for the next generation of leadership who will take over the company when the current leadership retires or dies. This is the essence of HBO succession storyline, as Logan Roy contemplates who he will choose to replace him as CEO of Waystar Royco while the family plots and plots against each other to be selected for the role. Wealth succession, on the other hand, focuses on preserving the family’s wealth for generations. This has proven historically challenging, as statistics show that there is a 70% chance that a family’s wealth will be lost in the third generation and a 90% chance it will be lost in the fourth generation. Wealth succession usually involves a combination of estate planning and taxes, as well as investment and wealth management. Finally, legacy succession is about defining and preserving your purpose in life and the impact you have on the world.

While viewers are never told exactly how Waystar Royco was built into a multi-billion dollar public company, it appears that it was Logan Roy who created and originally owned the news-media company before going public. In other words, Logan Roy is an entrepreneur who started and grew a successful business. In fact, Waystar Royco seems to be Logan Roy’s most significant contribution to society and culture and embodies the work of his life. Like many entrepreneurs, his business generated extraordinary financial fortunes—much of which continued to be tied to the company he founded. As a result Waystar Royco is an asset owned or controlled by Logan Roy which has implications for business succession, wealth succession and inheritance succession. Unfortunately, Logan Roy couldn’t tell the difference between the three. But even more unfortunate is the fact that too many true entrepreneurs make the same mistakes.

Your legacy is the impact you have on the world and the people around you. This is the meaning or purpose of your life. While we know that Logan Roy created Waystar Royco, what we don’t know is why. Apart from wanting money and power, we don’t know Logan Roy’s purpose in life. Neither money nor power is the goal. Both are tools or resources that must be applied to achieve a particular goal in order to have value. This is a fundamental weakness of every character in the story—none of whom has a real purpose in life. The whole series is an exercise in what happens when you accumulate financial wealth for the sake of accumulating financial wealth: disaster. The crazy thing is that’s what we’re taught to do in life—just to make money. With rare exceptions, a child is encouraged to find out how they can make a difference in the world or impact society. On the contrary, from a young age we are all driven to find out what we are going to do to make money. We were asked “what” you will become when you grow up, not “why.”

So, we set out to make as much money as possible with the dream of becoming as rich as Logan Roy. Why? Because that’s what makes us believe we should do it—to make money. Then, if we are lucky enough to be super rich, we want all that money to last for generations. Why? Most would say because we want our kids to be happy and have opportunities that we didn’t have growing up. As a result, the wealth management and estate planning industries generate tens of trillions of dollars each year growing and seeking to preserve family wealth. The problem is that they failed—too bad.

As mentioned, statistically (and despite the efforts of estate planners, wealth managers, and other professionals) 70% of wealth is lost by the second generation and 90% of wealth is lost by the third generation. The often cited reason for this colossal failure is the lack of communication and trust among family members and the lack of heir preparation, not that the family does not have an inheritance or wealth succession plan. While these are clearly contributing factors, they stem from one bigger problem—a lack of purpose. Without a clear purpose, there is very little to communicate to your heirs except the amount of money they will inherit. Without a clear goal, it’s easy to speculate and begin to question the motives of other family members who have been taught to care about nothing but having as much money as possible. Without a clear purpose there are no instructions or directions on how to prepare an heir. Purpose is everything; however, goals are almost always lacking.

That’s the world we live in, and that’s the world depicted on HBO succession. The result is a very dysfunctional, and very unhappy family. After Logan Roy’s inevitable death, it’s likely that the financial fortune he’d worked so hard to build will be lost. So, pay attention to entrepreneurs. If you want to leave a lasting legacy and for your business to continue to thrive, if you want to create generational wealth, the Roy family is an example of what no do. Here are some concepts to keep in mind:

Don’t Confuse Your Inheritance With Your Financial Wealth.

Your inheritance is not your financial asset. A financial asset is a resource that must be used for a specific purpose. Preserving your legacy is an example of purpose, as is giving your family members the opportunity to thrive and live fulfilling lives. Therefore, assets you own that embody your goals and legacy (for example, a business like Waystar Royco) should be treated differently and managed separately from other assets.

Don’t Expect Your Kids To Take Over The Business.

One of the most common mistakes entrepreneurs make is insisting on choosing family members to succeed them in controlling the business that embodies their legacy. Everyone has goals in life that will bring them fulfillment. Rarely is your child’s goals the same as yours. Your children need to be supported and encouraged to go out into the world and find their own purpose. Business succession planning—that is, preparing the next generation of business leadership—should only involve qualified individuals who see the role as fulfilling their purpose. This will ensure they have the passion, talent, skills, drive, values, etc., necessary to ensure the continued success and growth of the business, and to ensure the business continues to meet its intended purpose and impact.

Make Sure Your Financial Wealth Serves Your Family, Not The Other. Instead of

worrying about how you will make your money last for generations, you should worry about how your money will improve the lives of your family for generations. This means that instead of making your family serve your family’s wealth, you should make your family’s wealth serve your family.