A Furniture Dealer's Testament

Less Is More: How Great Companies Improve Productivity Without Layoffs
by Jason Jennings

(Page 5 of 6)

Imagine being worth a reported $30 billion and counting every penny like it was your last. Welcome to the world of Ingvar Kamprad, the founder of Swedish furniture retailer IKEA. His original simple business proposition was to bring affordable, well-designed furniture to the masses, people he refers to as the "many." And he's doing it with stunning success.

Kamprad's dedication and focus to IKEA's BIG objective manifested itself in a document he wrote in December 1976, entitled A Furniture Dealer's Testament. In it, he stated that "All nations and societies in both the East and the West spend a disproportionate amount of their resources on satisfying a minority of the population. In our line of business, for example, far too many of the fine designs and new ideas are reserved for a small circle of the affluent." Kamprad's business objective for IKEA grew out of that simple observation.

Like The Warehouse's Tindall, Ingvar Kamprad is a man of the people. His idea of a luxury vacation is riding his bike. He refuses to fly first class and, even though retired, he still visits IKEA stores to keep a feel for where the business really happens: in the store. Today, the world's only global furniture brand achieves sales per employee sales 50 percent greater than the industry average.

The son of farmers in northern Sweden, Kamprad had a modest upbringing. While in his teens he started importing small items like ballpoint pens and selling them for a modest profit. Tired of wasting money on middlemen to import, distribute and handle his goods, he eventually decided to import himself.

From belt buckles, pens and watches, Kamprad moved to furniture and as furniture sales continued to grow he began to experience a worrisomely high percentage of furniture damaged in transport-broken table legs, that type of thing. The European insurance companies were beginning to grumble.

One day in 1952, Kamprad's trusted jack-of-all-trades, Gillis Lundgren, came up with the idea that changed the furniture industry forever: "God, what a lot of space it takes up. Let's take the legs off and put them under the tabletop."

The rest is history. IKEA's flat-pack methodology rocketed them past the competition. "After that [table] followed a whole series of other self-assembled furniture, and by 1956 the concept was more or less systematized," writes Kamprad. "The more 'knockdown' we could produce, the less damage occurred during transport and the lower freight costs were."

And that value was passed on to IKEA's customers.

Driving him the entire time was his commitment to providing high-quality, affordable, stylish items to ordinary people. He recalls with distaste when he visited Italy and saw firsthand whom the "well-designed" furniture had been reaching. "I had an awakening," he writes, "when I went to the Milan Fair and visited a large carpet supplier. Thanks to him, I was able to see ordinary Italian households, the homes of simple clerks and workers. What I saw surprised me: heavy, dark furniture; a single lightbulb above a heavy dining-room table; a chasm between all the elegance at the fair and what could be seen in the homes of ordinary people."

Kamprad has always thought that it was laziness that created expensive furniture design solutions. "Any architect can design a desk that will cost 5000 kronor," he writes in A Furniture Dealer's Testament. "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."

Even though Kamprad no longer actively manages IKEA, his legacy, in documents like A Furniture Dealer's Testament, lives on. IKEA employees still refer to him as if he were actively managing the company. His BIG objective-affordable well-designed furniture for the many-has been so influential that it's outgrown his presence at the company and will most likely outlive him.

How many furniture retailers, or retailers period, out there think like Ingvar, and have such a fervent commitment to their BIG objective? According to our research . . . none!

Focus

Most people in business are only too familiar with the rants of the beleaguered CEO, general manager, sales manager or plant manager out to cover his own butt, who harrumphs, "The only thing that matters for the next quarter is maximizing profit" . . . or new business . . . or productivity . . . or whatever. And then proceeds to create an initiative with a lofty project name like PUFF-People United For Our Factory. The next quarter, of course, management is back again with another equally preposterous set of initials asking people to be or do something different. Most workers have been asked to focus and refocus on so many phony-baloney programs so many times by so many people that it's no wonder they become cynical.

To focus means to concentrate attention or effort. Unfortunately, most corporate leaders act as though they suffer from attention deficit disorder when it comes to keeping their companies focused on mastering a simple BIG objective.

This lack of clarity inevitably leads to that same old stuff every corporate employee has witnessed too many times: an inability to move quickly, hidden agendas, unhappy workers, turf wars, finger pointing, a constant need for phalanxes of outside consultants to try and sort things out, palace intrigue and eventually a CYA mentality. It's tough to be productive when there's a swamp full of superfluous man-made issues to wade through each day.

Copyright © November 2002, Portfolio Books, a member of Penguin Putnam, Inc., used by permission.

About the Author

Jason Jennings has spent more than twenty years teaching businesspeople how to build great organizations. He gives more than sixty keynote speeches every year and is the author of two previous business bestsellers: Less Is More and It's Not the Big That Eat the Small, It's the Fast that Eat the Slow. He lives near San Francisco.