Ikea has always been one of the companies which I respect tremendously. Much of the furnishings in my home come from the privately held Scandinavian giant, which has some 313 stores in 38 countries. Its legendary founder Ingvar Kamprad, known for his extreme miserly manner, is one of the richest persons in the world.I
Having heard so much about the Swedish furniture conglomerate, I couldn't resisting borrowing the book The Truth About Ikea: The Secret behind the World's Fifth Richest Man and the Swedish Flatpack Giant from our library. Authored by 20 year Ikea veteran Johan Stenebo, it provided a fascinating insight into what "really" happened behind its hallowed blue and yellow walls.
An insider who was once Managing Director of Ikea Greentech AB, Stenebo writes with strong conviction. The book is divided into three main sections - Ingvar Kamprad, The Company, and The Future. In the chapters on the founder, Stenebo's perspective as a former assistant of the company chief gave him a unique perspective into his leadership style. One gets the impression that a highly driven, intelligent and cunning corporate leader lie beneath the public facade of Kamprad as a bumbling old gentleman who is always smiling, "alcoholic", and extremely stingy.
Stories of Kamprad's miserliness seem to be mostly true (according to Stenebo), and company executives are forced to ride economy on long flights and stay in cheaper hotels worldwide. Kamprad himself lives rather squalidly for a man of his means, and the story of him driving a beat up Volvo prevails. The founder's management savvy could also be seen through how he manages meetings, allowing senior managers to say their piece before making the final decisions.
I found the section on the company itself the most interesting. Here, one could learn how supply chain management and consumer oriented design and production of furniture ranges play pivotal roles. While most of us are familiar with the retail shopfronts of Ikea with its characteristic flatpack and DIY style furniture, it is the extreme efficiency of its raw material sourcing, production, logistics, and purchasing machinery which helped the retail megastore to achieve success.
Stenebo also writes about Ikea's winning culture which is supposedly embodied in the surprisingly simple theses of its Testament of a Furniture Dealer as follows:
1) The Product Range - Our Identity
2) The IKEA spirit - a strong and living reality
3) Profit Gives Us Resources
4) Reaching Good Results with Small Means
5) Simplicity is a Virtue
6) Doing it a Different Way
7) Concentration - Important to Our Success
8) Taking Responsibility - A Privilege
9) Most Things Still Remain to Be Done
Perhaps the juiciest part of Stenebo's Swedish accented narrative (admittedly, his English took some getting used to) was the final chapter on how the company is heading towards uncertain time. Here - and perhaps throughout much of the book - Stenebo writes about the different characters in the "Kamprad-Sphere" and appears downright pessimistic about Peter, Jonas and Matthias Kamprad. These heirs to the Ikea empire are painted as highly incompetent managers who lived forever under their father's huge shadow.
The final chapters also illustrated how Ingvar Kamprad disguised his wealth through complex company structures formed in different countries with the aim of avoiding taxes. It also shared candidly what being environmentally friendly truly meant for Ikea, and how it used donations to NGOs and clever public relations to appear more sustainable than it truly is.
Swinging between admiration and criticism, it seemed clear that Stenebo has a love-hate relationship with his former employer. While the book is generally quite readable, once you get used to its writing style, it appears at time to employ heavy rhetoric in getting a point across while making mountains out of molehills. Despite its cover, I didn't really find it that sensational. However, it does help me to understand the human dimension of managing a large MNC and the issues that are faced by huge retailers like Ikea.
Labels: book review, discount retailing, ikea, Johan Stenebo, retail strategy, supply chain management, The Truth About Ikea, warehouse retailer