Ikea's Mistakes: A Good Sign

As I get deeper into graduate school, this blog might start to look like a roll call of interesting speakers. Well, chalk one more onto the list: Mikael Ohlsson, President and CEO of IKEA Group. I attended his talk recently at Columbia, where he was accepting the Botwinick Prize in Business Ethics.  The most interesting aspects were around Ikea’s culture and approach to business:

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1. Look for values – even before competence

A corporate culture cannot be shaped by a memo, no matter how tempting it might be to executives to issue emails and assume cultural issues will be instantly resolved. A corporate culture is an aggregate of each employee’s outlook and behavior; therefore shaping it is a conscientious and time-consuming process. When asked the most important aspect in crafting Ikea’s culture, Mikael responded that he focuses on finding potential employees with similar value mindsets – even if they don’t yet have the needed job knowledge. Skills/knowledge can be provided through training; values such as an entrepreneurial mindset, respect for colleagues, intellectual curiosity, and a collaborative work ethic cannot.

2. All colleagues are important colleagues

So what is important to Ikea’s culture? I haven’t spoken with other Ikea employees, so feel free to take the CEO’s speech with a grain of salt, but the purported focus is that all coworkers are important colleagues. The dress even at corporate headquarters is casual (read: jeans) and there are no large offices or exclusive board meeting rooms so that all employees feel like they have equal access to the space. A thought provoking comment from Mikael is that they try to go “from strategy to detail in every conversation” – meaning that they don’t assign strategy issues to upper management and detail follow-through to “lower-level” employees.  Each worker is responsible for tackling both strategy and detail aspects of problems.

3. Empower employees – don’t make them check with a supervisor

One of my favorite lines of the evening was when Mikael said “If we are not making mistakes, we are not doing enough.” His point was that mistakes are not only natural, they are an indicator that the company is trying new things and empowering employees in new skills. Ikea works hard to empower its employees, encouraging them to make decisions without having to check in with supervisors. Yes, this results in mistakes at times, but it also provides valuable learning experiences for employees and helps workers have ownership in their areas.

4. Creativity can be quantitative

The actual award focused on Ikea’s “Business Ethics” – both its drive to provide “smaller wallet” customers with a high quality standard of living, and for ecological/reforestation initiatives. An important point Mikael noted here is that the ethics of business and the profits of business can be aligned; for example, by constantly redesigning furniture to consume fewer materials, the company saves costs, the environment saves trees, and customers save money through lower prices. A focus on creativity, innovative and innovation provide both quantitative improvements for the bottom line and qualitative improvements for customers and the environment.

Now, completely unrelated to Mikael, a bit of Ikea humor to end us on a lighter note: