Succession planning
Lear has decided to retire. He has a plan, he has a map, and he has already made his decisions. What he stages instead is a loyalty contest, and the play spends four acts on the consequences of one badly designed meeting.
Here is the whole transition plan, delivered in a single speech.
Notice the sequence. He has already divided the kingdom in three. The map is on the table before anyone speaks. Then he asks which of them loves him most, as though the answer will determine anything. The allocation is done and the exercise is theater, which is the first problem. The second problem is worse: he has publicly attached the size of each share to a performance of affection, so he has told three people exactly how to game him and then asked them to go ahead.
Two of them do. The third declines.
According to my bond, no more nor less. It is an accurate statement of obligation and it is the only honest bid in the room. It costs her everything, because Lear has designed a process in which accuracy scores zero. The measure he chose rewards the thing that is easiest to fake and penalizes the thing he actually needed to know.
The person who says it out loud
What makes the scene painful rather than merely foolish is that someone tells him. Kent is not a rival or a schemer. He is the most senior person in the room and he says the quiet thing at real cost.
Duty shall have dread to speak when power to flattery bows. That is a description of what happens to candor in an organization the moment the person at the top starts rewarding praise. Kent is not saying Lear made a mistake in judgment. He is saying Lear built an incentive that made the mistake inevitable, and he stakes his own position on the reading.
Lear banishes him inside twenty lines. The last honest voice is removed by the same process that promoted the dishonest ones, and after that the play has nowhere to go but down.
What actually went wrong
It is tempting to read this as a story about a father misjudging his children, and it is that. But the failure is structural and it happens before any of the daughters speak. Lear divested rule and territory while keeping the title and the retinue, which means he handed over the authority and kept the expectations. He picked a selection criterion that could not measure the quality he needed. And he ran the whole thing in public, where reversing course would have cost him face, which guaranteed he would not reverse course when Kent gave him the chance.
Any one of those is survivable. He did all of them in a single afternoon, and by the time the storm arrives he is the only one surprised.