Santa’s Succession Struggles – Visions of Sugar-Plums are no Substitute for Legacy Planning

Santa’s Succession Struggles – Visions of Sugar-Plums are no Substitute for Legacy Planning
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It’s arguably the most famous family business in the world, and technically the oldest – ahead of the Goulaine family’s 1020-year-old French vineyard, Château de Goulaine, and likely even a little older than the 1442-year-old Japanese Kōngo Gumi construction company, now in its 40th generation.

But despite this organisation’s ability to weather global instability, flourish through economic downturns and countless bear markets, the Santa Claus toy-making and distribution company has a serious succession problem.

Like many family business founders, Santa Claus, A.K.A., Kris Kringle, Father Christmas, Saint Nicholas (the constant ego-driven shift in titles likely a nightmare for his elfin staff and management) has not been immune to perpetually holding onto the reins of leadership, unaware of how the changing times threaten his organisation’s long-term sustainability.

Yes, Santa Claus has relied on “magic” and “immortality” to maintain his relevance in the business’ day-to-day affairs, but with his cookie consumption totalling 374 billion calories, 33,000 tons of sugar, and 151,000 tons of fat in one single night each year, a well-structured succession plan may be imperative to continue the level of service that has delivered consistent brand loyalty from his target consumers: little girls and boys. He could start with the following:

Identifying Objectives

In this critical succession first step, it is important that the Claus family determine a collective vision for the company. As is the case in many family businesses, a team of mythical, tiny, candy-cane devouring advisors may be required to help create a cohesive, workable plan.

santa succession strugglesEstablishing the Succession Plan

Key at this stage of succession planning is to acknowledge the active and non-active roles of everyone in the family as it pertains to the business. For the Claus family, Mrs Jessica Mary Claus’ responsibilities appear unworkably fluid. She is a resource that is woefully under-utilised. Her disregarded 1996 suggestion of collecting commercial airline points in the firm’s delivery phase instead of using a private aircraft remains one of the company’s most costly logistics blunders.

However, the most consequential and challenging task in this succession planning phase is identifying the future owners of the business. Despite having no children of their own, Mr and Mrs Claus have, however, been very open about their unique and somewhat awkward situation where “everyone who believes in Santa” is part of their family.

Beyond the complicated questions it raises about Santa’s personal life, the greater test to the business and their relationship will be in selecting an appropriate successor. Although none appear perfect, several potential leaders with tangential connections to the Clauses and a suitable pedigree should be vetted:

A Santa’s Helper – Already very familiar with the PR aspect of the business, one of Santa’s helpers seems like a worthy consideration. However, the workshop employees may see this type of candidate as a snow-white fluffy collar executive, unfamiliar with the manufacturing techniques and systems the business was built on, and communicating in the disconnected and unrelatable manner of “jolly”.

Frosty The Snowman – A veteran player in the Holiday sector, Frosty could bring seasoned experience to the Claus operation. But the move may draw resentment from Home Office staff who feel Frosty’s continued reliance on coal eyes and refusal to ditch the corncob pipe threatens the company’s environmentally friendly culture.

Scrooge – A seemingly counterintuitive choice, Ebenezer Scrooge possesses the fervent, spendthrift approach that might trim away production inefficiencies and fatten the firm’s bottom line. However, Scrooge’s open policy of hiring ghosts to save on employee health benefits and pensions might convey the wrong optics, and cause damaging friction with the elf union.

Creating a Transition Plan

Once future stewardship has been established, The Clauses must consider the choices for a smooth leadership transferral. Purchasing and financing options, management payouts, tax considerations and even passing the organisation along in the form of a gift under a tree are all avenues to be carefully and genuinely explored.

Given that St Nicholas is also the patron saint of banking, pawnbroking, pirating, butchery, sailing, thievery, haberdashery and New York City, this aspect of the succession process may pose a bigger obstacle for the incoming owner. The best structure might, in fact, involve turning the North Poll enterprise into a subsidiary that the Claus family controls through a parent entity known as a HO-HO-HOLDING company.

To All A Goodnight…

Many family businesses don’t survive beyond the first generation, but Santa’s legacy may ultimately be secure. The Claus family business, perhaps like no other, enriches the imagination of children and adults alike. Santa Claus has long established a relationship with his clients based on trust, joy and possibility. In the spirit of giving the world over, the Claus family may have already solved their succession problem.