Ingvar Kamprad. Not a household name, but a Swedish business legacy nonetheless. The world lost Kamprad – the founder of IKEA – in 2018. Kamprad founded IKEA at 17, by selling replicas of his uncle’s kitchen table. The chain now has more than 400 locations, $62 billion in revenue, and is a role model for cost control.
What are a few lessons that can be learned from this entrepreneur to increase both your bottom line and employee engagement?
- Lesson 1: Addressing consumer inconvenience can be lucrative. Shipping and transportation costs are furniture’s greatest cost drivers, so Kamprad “flat-packed” it to drive down the price. The result? Consumers would now have to assemble it, which research shows people love doing.
- Lesson 2: IKEA built warehouses on the outskirts of cities near major ports or transportation hubs to cut costs. Kamprad knew that with the right price and product mix, consumers would drive to IKEA as a destination shopping experience. Hence, the rise of IKEA restaurants and Swedish meatballs.
- Lesson 3: IKEA’s product lines rarely shift, so the company can fine-tune the production of each product to minimize cost.
- Lesson 4: Kamprad understood that furniture didn’t have to be like a family heirloom passed down from generation to generation. IKEA was furniture you dumped and bought new again. Environmentally unfriendly, but efficient and convenient for mobile young people.
And while no company or person is flawless (as a youth, Kamprad was a member of a far-right nationalist group and has a resistance to paying taxes), there are valuable lessons to take from this story.
WHAT CAN I DO? Identify a process in your organization with potential for improvement and re-invent it. But don’t do this alone. Gather your team mates or colleagues together and conduct a small focus group, where you brainstorm ways to do it cheaper, faster, better, and then implement your solution. In addition to helping your business improve, you’ll enable employees to have a voice, which drives higher levels of employee engagement. Leadership is possible at every level.