IKEA and the long view in strategic thinking
Image source: Ingka.com
What is long-term planning at IKEA? In an extensive interview with the Swedish newspaper Dagens Industri, Ingka Group CEO Jesper Brodin says that the founder of IKEA, Ingvar Kamprad, defined the long term as 200 years.
After starting as the CEO, Brodin saw the internet's importance and started investing in omnichannel solutions. According to Kamprad, like many company managers, IKEA should focus only on building the eponymous big stores.
Today, however, almost 25% of sales come online. In some large cities, such as London or Tokyo, the proportion has risen to 50%.
One of the reasons for opposing the internet must have been Kamprad's only rule of finance: the money must be earned first, and only then can it be spent. Kamprad famously disliked the use of debt.
Ingvar Kamprad's last big project was to take IKEA to Russia. Indeed, it had been a tremendous financial success before last year's withdrawal. Brodin hopes that IKEA could return to the country one day.
Finally, Brodin states that sustainability will be a bigger change for society than AI. Too often, sustainability is masqueraded by PR-like statements instead of real action. Brodin believes it is easier for IKEA to invest in responsibility because the company is not owned by public shareholders but by very patient owners (especially the IKEA Foundation).
Patience is a term that characterises all of IKEA. Brodin states that he does not want the company to grow too quickly. More than 10% growth is too fast for them. Appropriate and controlled growth is 5-9% per year. Many companies make the mistake of growing very fast when it is possible and then suffering the hangover-like symptoms of the rapid growth phase.
