IKEA Leadership: effective application of leading by example
The current IKEA leadership practices and patterns are based on leadership principles and life philosophy of its founder Ingvar Kamprad. Known to practice transformational and charismatic leadership styles, Ingvar Kamprad had been a driving force for many decades behind the phenomenal success of the home improvement and furnishing chain. Ingvar Kamprad founded the furniture retailer in 1943 and after leading the business for 70 years, he handed over control to his three sons. Nevertheless, work principles of the founder associated with frugality and effectiveness continues to serve as a basis for IKEA leadership practices in modern days.
IKEA founder Ingvar Kamprad
In 2017 Jesper Brodin became President and CEO of IKEA Group, INGKA Holding B.V. and its controlled entities. He is only the 6th CEO in The Swedish furniture chain’s history of more than 75 years. Mr. Brodin has worked as an assistant to founder Ingvar Kamprad and it is widely believed that IKEA CEO will not change the strategic direction set by the founder of the business.
The CEO of Inter Ikea that manages company’s brand and concept Mr. Jon Abrahamsson Ring has also served as founder’s assistant for many years. It has been noted that “former assistants of Mr. Kamprad have had a near monopoly on the leadership of the two main companies in the furniture empire in recent times”[1]. Apart from two executives mentioned above, former Ingka CEOs Peter Agnefjall and Anders Dahlvig were also former assistant to Mr. Kamprad.
IKEA leadership principles are based on the following pillars:
1. Leading by example. It is difficult to contain IKEA leadership style into a single classification due to a unique nature of the business in more than one ways. Perhaps, leading by example, may the most closely characterise leadership practices at IKEA. The famous quote by IKEA founder Ingvar Kamprad “if there is such a thing as good leadership, it is to give a good example” is a clear illustration of his leadership values, which relates to the global furniture retailer to this day.
2. Frugality. During his time at the helm, Mr. Kamprad was known to be very frugal person driving an old Volvo, flying economy class even for long-haul distances and using Stockholm’s subway and public buses. It has been noted that Mr. Kamprad’s frugality was not born of a desire simply to build up his billions, but also to offer a guiding example to thousands of IKEA staff.[2]
3. Intangible motivation. Another important characteristic of IKEA leadership relates to the effective application of intangible employee motivation tools to achieve enhanced employee performance. Mr. Kamprad had a habit of personally handing out Christmas presents every year to thousands of employees, earning their admiration and loyalty. All these leadership principles exercised by the late founder have their reflection on the furniture retailer to this day.
Changes appear to be inevitable talking into account increasingly dynamic nature of the global marketplace fuelled by increasing forces of globalization, increasing relevance and role of internet of things and other factors. The Swedish furniture chain has to respond to these changes in the external environment and the response may require certain changes in leadership practices as well.
IKEA Group Report contains the above analysis of IKEA leadership. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on IKEA. Moreover, the report contains analyses of IKEA business strategy, organizational structure and organizational culture. The report also comprises discussions of IKEA marketing strategy, ecosystem and addresses issues of corporate social responsibility.
[1] Milne, R. (2020) “Inter Ikea appoints founder’s former assistant as chief executive” Financial Times, Available at: https://www.ft.com/content/23617486-4cac-11ea-95a0-43d18ec715f5
[2] Sylt, C. (2005) “Ingvar Kamprad: Leader of the flatpack” Independent, Available at: http://www.independent.co.uk/news/people/profiles/ingvar-kamprad-leader-of-the-flatpack-483063.html