In 2017, the Ikea Group had sales of just over SEK 350 billion, made a profit of around SEK 30 billion and had almost 150,000 employees. In the same year, the Group had 400 department stores, most of them wholly owned, in 29 countries. Ingvar Kamprad founded IKEA in 1943 and was active in the company until his death in 2018. Kamprad became 91 years old and spent almost 75 years with the company. In 2017, the magazine Veckans Affärer valued Kamprad’s fortune, then controlled by the Stichting Inga Foundation, at SEK 620 billion ($76bn) and the Ikea founder was listed as number one on the list of Sweden’s billionaires. Despite living in Switzerland for over 30 years, Kamprad always had a place in the Swedish people’s soul.
STARTS IN THE 1940s. Ikea was launched after the Second World War and during a time when many young families, with hope for the future, wanted to build their own homes with new furniture. Inherited furniture belonged to the history. Ikea’s successful growth coincided with the development of the Swedish record years and the “folk home” during the 1950s and 1960s. But the success was not painless. Competitors were outraged by Ikea’s low prices and had suppliers terminate their partnerships with Ikea. This led to Ikea being forced to seek suppliers abroad in the early 1960s and began cooperating with manufacturers in Poland – which in the long run made even lower prices possible.
EMIGRATES IN THE 1970s. After two decades of development, growth and profitability, the Swedish society came to a halt during the first oil crisis in 1973. By then, the corporate tax had crept up to 52% and the dividend tax was around 75%. In addition there was hefty inheritance taxes and wealth taxes. This made it virtually impossible to run individually owned companies in Sweden. Wealthy individuals and business owners who had not taken measures to reduce inheritance tax could lose both their businesses and their wealth. To enable further development of their companies, Tetra Pak’s founders Ruben Rausing emigrated in 1969 (to Great Britain), Kamprad in 1973 (Denmark) and Erling Persson of H&M in 1982 (Great Britain). During the early 1970s, Ikea opened its first department stores outside the Nordic region, and at the end of the decade there were department stores in large parts of Europe as well as Japan, Australia, Canada, the USA, Hong Kong and Singapore.
” Every krona that can be saved must be saved. That also shapes our view of taxes” – Ingvar Kamprad
GROWTH PICKS UP AGAIN. During the period 1986–1998, Ikea’s sales increased by 16% per year, from SEK 10 billion to SEK 60 billion. The first Chinese department store was inaugurated in Shanghai in 1998 and became department store number 137. The wave of globalization that swept across the world during the 1980s, 1990s and early 2000s suited Ikea perfectly. In 2019, Ikea’s most important markets were Germany and the USA, with over 50 department stores in each market.
MISTAKES ARE PART OF THE PROCESS. Making mistakes is the privilege of the energetic – the one who is able to change and correct. Fear of making mistakes is the cradle of bureaucracy and the enemy of all development. One of the reasons why Kamprad often spoke about mistakes was that he knew that he could be punished if he bragged about successes. In addition, he wanted to spread the message that one can learn something from making mistakes. It is a sign of a weak and negative mind to be negative and spend time proving that one was not wrong. The strong are always positive, work forward and are the ones who win in the end.
WATCH OUT FOR BUREAUCRACY. Historical burden, fear and unwillingness to take responsibility are the bureaucracy’s breeding ground. Indecision leads to more statistics as well as more investigations and meetings. Bureaucracy complicates and paralyzes. Excessive planning suppresses your freedom of action and reduces your time for implementation. Instead, let simplicity and common sense characterize your planning.
A NATURAL CRISIS MANAGER. Kamprad has over the years been skilled at crisis management without having PR consultants around him. Once confronted with the facts, he acted quickly and clearly. Kamprad put the cards on the table and apologized. Regarding the “Nazism problem”, that Kamprad as a 17-year-old was a member of the Nazi-sympathizing party “Nysvenska rörelsen”, he stood up for what he did and told straightforwardly that he was young and naive. He also never tried to hide that he drank too much.
DID NOT SWAGGER. In Kamprad’s leadership philosophy, there were two important starting points: humility and the importance of being a good role model. Employees do as the leader does, not as the leader says. Kamprad said “we should not exalt ourselves” and it was forbidden to use the words “The world’s best furniture company”. Kamprad, for his part, thought he had more shortcomings than skills. A strong driving force was that Kamprad wanted to show the world that he could achieve something.
MOST IS STILL UNDONE. A company that considers itself at being at the finish line stagnates quickly and loses its vitality. Kamprad’s motto was “Most things are undone, wonderful future”. Only by constantly asking ourselves how what we do today, can be done better tomorrow, can we move forward. If you are satisfied, the risk is great that you dared too little.