IKEA’s Testament of a Furniture Dealer – Recollections
First up, a growth announcement we are quite excited about: Outside In has opened up a new ‘storefront’ (can I say?) on Instagram (@outsideinlens). They say that a picture (or a video in our digital age) is worth a thousand words and that was literally the inspiration behind opening up that channel for Outside In. There is tons of visual and video content out there which drives the urge to consume it spontaneously and maybe even more frequently than a weekly long-read newsletter. Agree that there is merit in maintaining both appetites in an omnichannel world – serving different needs of snackable content as well as multi-course content. So that is what we plan to do going forward – Weekly Newsletters on your E-Mail, Spontaneous Snippets on Instagram.
Now, let’s move onto our weekly deliberation below…
As IKEA India prepares to launch its Navi Mumbai store today (18 December 2020), there has been considerable buzz in the media and industry circles. More so, because it portends a better future for the beleaguered Retail sector, after nearly a year in pandemic.
Against this backdrop, I could not help recall an admirable piece of vision and growth roadmap for IKEA outlined by Founder Ingvar Kamprad way back in 1976 in a note titled – The Testament of a Furniture Dealer. I have read it quite a few times earlier and I read it again this week. Allow me to share select notes that strike a chord and touch deep indeed.
The IKEA Testament Recollections
Purpose: 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.
Approach: We have decided once and for all to side with the many. What is good for our customers is also, in the long run, good for us. This is an objective that carries obligations.
Ambitions: We know that we can be a beneficial influence on practically all markets. We know that in the future we will be able to make a valuable contribution to the process of democratisation outside our own homeland too. We know that larger production runs give us new advantages on our home ground, as well as more markets to spread our risks over. That is why it is our duty to expand.
Described below are the 9 rules and methods (testaments, if you will) that we have worked out over the years as cornerstones of the framework of ideas that have made and will continue to make IKEA a unique company.
1) The product range – our identity
We shall offer 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.
Range: The objective must be to encompass the total home environment, i.e. to offer furnishings and fittings for every part of the home whether indoors or outdoors.
Profile: The main emphasis must always be on our basic range – on the part that is “typically IKEA”. Our basic range must have its own profile. It must reflect our way of thinking by being as simple and straightforward as we are ourselves.
Functional and technical quality: Whatever the consumer purchases shall give long-term enjoyment. That is why our products must be functional and well-made. But quality must never be an end in itself: it must be adjusted to the consumer’s needs.
Low price with a meaning: No effort must be spared to ensure our prices are perceived to be low. There shall always be a substantial price difference compared to our competitors, and we shall always have the best value-for-money offers for every function.
2) The IKEA spirit– a strong and living reality
The true IKEA spirit is still built on our enthusiasm, from our constant striving for renewal, from our cost-consciousness, from our readiness to take responsibility and help out, from our humbleness in approaching our task and from the simplicity of our way of doing things. We must look after each other and inspire each other.
Yes, the IKEA spirit still lives, but it too must be cultivated and developed to keep pace with the times. Development is not always the same thing as progress. It is often up to you, as the leader and bearer of responsibility, to make development progressive.
3) Profit gives us resources
Profit is a wonderful word! Let us start by stripping the word profit of its dramatic overtones. It is a word that politicians often use and abuse. Profit gives us resources.
The aim of our effort to build up financial resources is to reach a good result in the long term.
You know what it takes to do that: we must offer the lowest prices, and we must combine them with good quality. If we charge too much, we will not be able to offer the lowest prices. If we charge too little, we will not be able to build up resources. A wonderful problem!
It forces us to develop products more economically, to purchase more efficiently and to be constantly stubborn in cost savings of all kinds. That is our secret. That is the foundation of our success.
4) Reaching good results with small means
Wasting resources is a mortal sin at IKEA. It is not all that difficult to reach set targets if you do not have to count the cost. 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.
Expensive solutions to any kind of problem are usually the work of mediocrity. We have no respect for a solution until we know what it costs. Before you choose a solution, set it in relation to the cost. Only then can you fully determine its worth.
5) Simplicity is a virtue
There have to be rules to enable a lot of people to function together in a community or a company. But the more complicated the rules are, the harder they are to comply with. Complicated rules paralyse!
Exaggerated planning is the most common cause of corporate death.
Simplicity is a fine tradition among us. Simple routines mean greater impact. Simplicity in our behaviour gives us strength. Simplicity and humbleness characterise us in our relations with each other, with our suppliers and with our customers.
6) Doing it a different way
By always asking why we are doing this or that, we can find new paths. By refusing to accept a pattern simply because it is well established,we make progress. We dare to do things differently! Not just in large matters, but in solving small everyday problems too.
Maintaining and developing the dynamism of our business is one of our most important tasks. That is why I hope, for example, that we will never have two identical stores. We know that the latest one is bound to have several things wrong with it, but, all things considered, it will still be the best yet.
Dynamism and the desire to experiment must continually lead us forward. “Why” will remain an important key word.
7) Concentration – important to our success
The general who divides his resources will invariably be defeated.
Our range cannot be allowed to overflow. We will never be able to satisfy all tastes anyway. We must concentrate on our own profile.
We can never promote the whole of our range at once. We must concentrate.
We cannot conquer every market at once. We must concentrate for maximum impact, often with small means.
When we are building up a new market, we concentrate on marketing.
8) Taking responsibility – a privilege
Constant meetings and group discussions are often the result of unwillingness or inability on the part of the person in charge to make decisions.
Making mistakes is the privilege of the active – of those who can correct their mistakes and put them right.
Our objectives require us to constantly practise making decisions and taking responsibility, to constantly overcome our fear of making mistakes. The fear of making mistakes is the root of bureaucracy and the enemy of development.
Exercise your privilege – your right and your duty to make decisions and take responsibility.
9) Most things still remain to be done. A glorious future!
The feeling of having finished something is an effective sleeping pill. A person who retires feeling that he has done his bit will quickly wither away.
A company which feels that it has reached its goal will quickly stagnate and lose its vitality.
Happiness is not reaching your goal. Happiness is being on the way.
It is a splendid read, isn’t it? I have the full the Testament with me in my repository, in case you are interested in reading the full version. DM for receiving it in your Inbox.
References and Sources
1) The Testament of a Furniture Dealer – Ingvar Kamprad’s Note from 1976
2) IKEA Navi Mumbai Launch: https://www.moneycontrol.com/news/business/real-estate/ikea-to-open-its-navi-mumbai-store-on-december-18-6188671.html