When companies hit turbulence, or worse – if their survival is threatened – it’s striking how often they go back to the source of their greatness for inspiration.
What originally made them special? How can those values be given contemporary resonance that restore past glories?
Similarly, when a new chief executive takes over at a big-name retailer, they frequently immerse themselves in the company archives searching for the secret ingredients that kept a business recipe appetising.
The value of relentless pursuit of the original business promise leaps out from the story of Ikea, whose enigmatic founder Ingvar Kamprad died this week.
Kamprad was a complex character, with as many flaws as strengths. The worst of them that he was associated in his youth with the Nazis, something he later described as “a part of my life which I bitterly regret”.
His failures acknowledged, he will nevertheless be remembered as a consummate retailer whose legacy in Ikea is a business that put the customer at the heart of all it did – and it’s that which other retailers can learn from.
Kamprad set out Ikea’s principles back in the 70s, as it began to grow into a global powerhouse, in The Testament of a Furniture Dealer, his business manifesto.
His goal was “to create a better everyday life for the many people by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”.
Ikea stuck unerringly to that ambition, focusing as much on low business costs as low prices for shoppers but never compromising on standards.
Another extract from Kamprad’s Testament epitomises the detailed approach he, and Ikea, took.
He wrote: “Quality must never be an end in itself: A tabletop, for example, needs a harder-wearing surface than a shelf in a bookcase.
“It has something in common with value grocers Aldi and Lidl in fidelity to its basic retail model, and shares with Asos an ability to tap into global consumer desires”
“In the first example, a more expensive finish offers the consumer long-lasting utility, whereas in the latter it just hurts the customer by adding to the price.”
He maintained: “Any designer can design a desk that will cost 5,000 kronor. But only the most highly skilled can design a good, functional desk that will cost 100 kronor.”
Undeviating pursuit of its vision allowed Ikea to extend its retail reach internationally.
It has something in common with value grocers Aldi and Lidl in fidelity to its basic retail model, and shares with Asos an ability to tap into global consumer desires – in Ikea’s case, the shared hope for a better life.
The stats speak for themselves. In 2016 there were 915 million visits to Ikea stores and 2.1 billion visits to its website. The retailer generated sales that year of €36.4bn.
The company has become a cultural icon, famous for making ‘flatpack’ a part of everyday vocabulary and for its meatballs as much as mattresses.
The ongoing success of Ikea is testament to the fact that, while much may change culturally, politically or economically, adherence to guiding principles and brilliant execution can make all the difference.
Per Heggenes, chief executive of the Ikea Foundation, maintained that the death of Kamprad, who has not been operationally involved for two decades, will have “no impact” on Ikea.
He said: “It has no impact beyond the loss of him as a founder and an icon. It’s a huge loss but if you look at the company structure, nothing will change.”
All business leaders, or entrepreneurs, want to create companies that will outlast them.
Kamprad offers lessons in simplicity, focus and customer understanding that are relevant in retail whether times are good or bad.