Home furnishings brand Ikea defies easy categorization, in part because of its complex corporate structure (374 Ikea stores in 30 countries are operated by Ingka Group, while Inter Ikea Group, a separate entity, is the franchisor that controls the Ikea concept) and its penchant for experimentation. It co-owns an affordable housing company, it is exploring robotic furniture, and its research and lab released a futuristic food cookbook. Fast Company sat down with Jesper Brodin, CEO of Ingka Group, at an Ikea “planning studio” in Manhattan—another experiment—to talk about design, sustainability, and the future of the business. The conversation, which took place in September, during Climate Week NYC, has been edited for length and clarity.
Fast Company: Ikea is involved in a range of activities, from housing to the elderly to automation to food. What kind of company is Ikea? Is it a tech company? Is it a retailer? A real-estate company?
Jesper Brodin: These are not random expressions of entrepreneurship, but it is actually, believe it or not, part of a plan. Our mission is to create a better everyday life for people, and we have three problems that we want to solve. One is regarding affordability, not about selling cheap furniture, but really for people with dreams, how do we make a home happen for them? And we can work to improve the economics of our offering through technology, through production, through different types of innovation.
The second part is about bringing ourselves closer to customers. We were always [set] on our concept of big-box [retail locations], and the way you interacted with us was the way we decided it should be. And the result has been market share of approximately 10% in most places. There is an opportunity there, and it is about being accessible, and we do that in three ways: We are investing like never before in digital, so we can have a conversation with you—not only be transactional—how can we provide that home furnishing knowledge through digital interfaces. The second thing is services [such as] home deliveries and assembling furniture. And the third is about how do we bring ourselves closer to people in city centers. I’ve asked my organization to test everything you can dream of. This is not the moment you’re afraid of breaking some traditional roots of the brand. The danger would be not to test and trial. We’ve learned some things, and we also started to see some emerging concepts that would be born in the future.
Then the third part, which is I think maybe is the most important transformation, is about sustainability. We are committed to being “climate positive” by 2030. But the point is that our future customers are speaking out on the streets right now. They will expect that from every company. So there you have it: affordabilty, convenience, and sustainability. And when you see all the innovations we have, mostly it’s connected.
FC: As you’ve tried to get closer to the customer and tested new things, what hasn’t worked? What are the lessons you’ve learned?
JB: We have rediscovered some core things. One of them is that we actually provide everything [for a home] under one roof, so when we’ve been fragmenting our offer, then people are also getting frustrated. “Here you have kitchens, but not bedrooms, why is that?” So that probably won’t fly. But on the other hand we have learned that you don’t have to have everything for sale. So the two concepts that seem to be the future for us, which we now start to scale out in 30 big cities, are planning studios like this one where you basically don’t carry anything out with you. We support you so can experience live solutions for small spaces. We help you with the planning.
The second one is what we call the small superstores. I think the one so far that has been most successful has been in La Madeleine in Paris. We have had almost 10,000 people [visit] per day since we opened. There we provide everything under one roof, but you can buy a lot of things. But you wouldn’t buy your sofa and and carry it home from there. That experience is phenomenal, and now what we’re learning there is how to make it operational.
FC: Does Ikea’s corporate structure make it hard to innovate because there are so many layers?
JB: I wouldn’t subscribe to that. On the contrary, if you look at the last year now, we basically agreed on the direction from key stakeholders. There are two main stakeholders in the Ikea family: the Inter IKEA Group, the owner of the brand, and us, Ingka, [which runs] a lot of retailing and digital. Of course we share a direction, and what we decided one year ago was to go all in on innovation. Five years ago, we started to build that capability—innovation in material design. In retailing, we started about a year and a half ago.
[Ingka] represents 90% of [Ikea’s] business, so we have the assets. We have money in the bank, we’ve saved up for development. We have agreed with our board to invest more than ever. So I would say the challenges are not connected to our structures. The challenges have been about us rediscovering innovation in retail.
FC: How do you work with employees to help address these challenges?
JB: The Ikea culture is strong. We’re not competing each other, we’re supporting each other. And on top of that, people like being part of something that’s purposeful. Now, we can become much better at engaging people. We launched a corporation platform [for employee ideas], and actually it crashed after a few weeks. It was very embarrassing, and it took us a while to get it up and running again. It turns out it’s not only [used for] innovation and problem-solving, it is for sharing examples. It’s not directed [by management]. It’s free-flowing.
FC: Fast Company‘s Innovation By Design Awards recently recognized Symfonisk, a lamp-speaker collaboration between Ikea and Sonos. Do you anticipate more such partnerships?
JB: The Sonos project was part of a new initiative in which we said, “We need to reach out and collaborate.” That led to the design collections with people like Virgil Abloh. That has led to a renewed confidence in the idea that our brand will thrive from meeting other brands. Sonos is one of the best examples and what happens when one plus one can become two. What we tried to stay away from is fame and pop for its own sake. We try to zoom in on problems that we think are important. We seem to be finding like-minded people who love to be part of resolving those types of problems.
FC: Do find that your partners are learning a little bit more from you about affordability as part of collaborating with Ikea?
JB: In the case of Sonos, I think that’s for them to say. We’re trying to provide them with phenomenal scale of course, and visibility. I remember speaking to [British lighting and furniture designer] Tom Dixon. He was fed up with designing sofas for $2,000. How do you do a comfortable, lovely, sustainable sofa at a price that people can afford? [In 2016 Dixon and Ikea teamed up to create a modular daybed, and in 2017 released an expanded collection called Delaktig.] So, not everybody, but a lot of people want to join us because of that.