I was recently in Sweden and was interested in learning about the history of Sweden’s monarchy. The story of the Swedish monarchy delivers some very insightful lessons for family business.

It all really starts with a certain Gustav Vasa, who is a pivotal figure in Swedish history because he is considered the founder of modern Sweden. In the early 16th century, Sweden was part of the Kalmar Union, dominated by Denmark. After the Danish king orchestrated the “Stockholm Bloodbath,” a massacre of Swedish nobles (including Vasa’s father), Gustav Vasa led a rebellion to liberate the country. He successfully drove out the Danes and was elected king in 1523 and established the House of Vasa, a hereditary monarchy that would rule for centuries. He transformed Sweden by seizing the wealth of the Catholic Church, implementing a national tax system and creating the first standing army. His reign marked the beginning of Swedish independence and its rise as a powerful nation in Northern Europe. From a family business perspective, he would represent the founding entrepreneur—the visionary leader who builds an institution from scratch, defining its culture, consolidating power, and securing its place in the market.

From the time of Gustav Vasa until the early 19th century, the Swedish monarchy was passed down through the House of Vasa and its successor dynasties, following a clear, hereditary line. The first crack in the traditional succession was the assassination of King Gustav III in 1792. King Gustav III was a powerful, autocratic ruler who had centralised power at the expense of the nobility. While popular with the common people, his actions, including a costly war with Russia, earned him the bitter resentment of the aristocracy. He was assassinated at a masquerade ball by a disgruntled nobleman. This is a parallel to a family business leader who consolidates too much power and alienates other family members or shareholders, leading to a “coup” or forced removal.

This event thrust his young and unprepared son, Gustav IV Adolf, onto the throne. Gustav IV Adolf’s reign was a disaster. His disastrous foreign policy and perceived incompetence led to his overthrow and exile in 1809. In family business terms, this mirrors what happens when a leader makes a series of poor decisions that jeopardise the company’s future, leading to their removal.

With no suitable heir from the Vasa dynasty in sight, his uncle, the reluctant and old Charles XIII, took the throne. Charles XIII was a caretaker monarch, a temporary solution to stabilise the nation after the political turmoil. His ascension was a compromise with the parliament, as he had to accept a new constitution that limited his power. In a family business, a senior, often reluctant, family member may step in to fill a leadership vacuum, acting as a placeholder until a more permanent solution can be found.

Charles XIII was childless, and his chosen heir died unexpectedly. This desperate situation forced the Swedish parliament, or Riksdag, to make a pragmatic and strategic decision. They looked beyond the traditional royal lineage and chose a competent outsider: Jean-Baptiste Bernadotte, a French Marshal under Napoleon. This wasn’t a sentimental choice but a strategic one. Sweden essentially outsourced its succession to a professional, much like a family business hires an external CEO when no family member is a suitable candidate.

The story of Bernadotte’s ascent offers crucial lessons for family businesses:

• The Primacy of Competence: Bernadotte’s selection highlights the principle that competence must outweigh lineage when the institution’s survival is at stake. The Riksdag chose a skilled military and political leader over a royal relative, prioritising the kingdom’s needs over family tradition. In a family business, a new leader must possess the skills and vision to navigate modern challenges like digitalisation and market shifts. It is a mistake to force a family member into a leadership role they are not equipped for, simply to keep the business “in the family.”

• The Power of a Fresh Perspective: Bernadotte brought an outsider’s perspective, free from the entanglements of Swedish court politics. He modernised the monarchy and established a new, lasting legacy. An external CEO can similarly bring a fresh viewpoint, new governance structures, and professional management practices that may be necessary for growth or a turnaround. This shift from a family-centric to a more corporate model is often the key to a business’s longevity.

• A Planned, Not Reactive, Process: The Swedish succession saga, from Gustav III’s assassination to Bernadotte’s arrival, demonstrates that succession should be a proactive process, not a reactive event. The monarchy was forced into a series of panicked, short-term solutions due to a lack of planning. In contrast, family businesses should have a formal succession plan that prepares for a wide range of contingencies, including a lack of suitable family heirs. This plan should involve the next generation and other stakeholders to ensure a smooth transition and long-term viability.

The Swedish succession saga is a powerful lesson that adaptability is the key to an enduring legacy. It is a cautionary tale about the consequences of internal conflict and failed leadership but also an inspiring example of an institution willing to make difficult, pragmatic choices for its own survival. The ultimate goal for a family business is not just to keep the business in the family at all costs, but to ensure the business thrives and endures. This might mean making the difficult decision to remove an unfit leader, embracing a caretaker, or courageously bringing in a competent outsider. The true legacy of a family business is its lasting success.

The insights from the Swedish monarchy’s history serve as a powerful metaphor, underscoring a critical truth: effective succession planning is not about lineage, but about ensuring the long-term vitality of the family business. During the upcoming accredited course “Award in leading a Family Business” course, kicking off on the 25th September, we will provide a structured platform to master the very principles—such as competence, outside perspective, proactive strategy and succession planning—that history proves are essential for a family business not just to survive, but to truly thrive for generations to come. Click HERE for more details and to Register. We will also assist to gain funding to this course.