Reviewing IKEA Culture Design Canvas

Learn how IKEA transformed the home furnishing business with a people-first culture.

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By Gustavo Razzetti

September 16, 2020

How IKEA build a family-feeling culture to provide a better everyday life for everyone

Before I share IKEA’s Culture Design Canvas, it’s important to understand the origin of the company and how its founder approach to life and business help craft this unique workplace culture.

IKEA was founded in Sweden in 1943 by Ingvar Kamprad, who started the business when he was just 17 years old. The young Swedish entrepreneur had previously sold matches, fish, and Christmas decorations. Kamprad would become the eighth richest person in the world, according to the Bloomberg Billionaires 2018 Index.

The name IKEA is an acronym that consists of the founder’s initials (Ingvar Kamprad), the family farm where he was born (Elmtaryd), and the nearby village (Agunnaryd).

The company was created as a response to Sweden’s low average income and the difficulty acquiring decent furniture. During IKEA’s first 10 years, Kamprad further innovated through self-assembly, the use of a catalogue and a showroom to make furniture design available to everyone.

IKEA’s culture reflects Swedish roots of picturesque fishing villages and endless forests. Nature plays a key role in everyday life. People are hard-working, down-to-earth, and help each other succeed.

As of June 2019, IKEA has 433 stores operating in 52 countries with sales worth $44.6 billion (fiscal year 2018).

IKEA Company Culture Evolution

“Maintaining a strong IKEA culture is one of the most crucial factors behind the continued success of the IKEA Concept” – Ingvar Kamprad

Since its origin, IKEA has been a tribal type of culture – some say it was even a cult at some point – where belonging and tenure were highly rewarded. Employees who had 20 years at the company would earn more respect and privileges than those who only has 10 or 5 years. However, lately this has been changing.

After Kamprad died and his sons took over, IKEA went through a major reorganization that started to erode some of the traditional values and behaviors. The digital transformation process generated layoffs – something new for IKEA – and rewarded the new over traditions. Rather than upskilling existing talent, the decision was to replace them with new people with new skills and expertise.

The process also affected transparency, as many decisions – where the company wants to go and how to get there – are now made by the few at the top; people are just communicated instructions on a need-to-know basis.

Still, most employees feel proud about a company that feels like a family – one with lots of possibilities, and which offers people to do great work and to be themselves. Diversity and openness have always been vital elements of IKEA’s culture. People describe the company as one that has, “fantastic values with a strong business acumen.”

However, people are starting to feel a ‘double standard’ – when under pressure, the values are not respected as they were in the past. The management has become less transparent and more hierarchical.

Here’s a detailed analysis of IKEA’s culture, mapped using The Culture Design Canvas. As part of the process, we facilitated a session with a team of current and former IKEA employees and consultants from different – a combined experience at IKEA of over 70 years.

In addition, I reviewed various sources (listed below) and hosted interviews with former and current employees. Special kudos to Dr. Alicia Medina from Quini AB for all her contributions – sharing invaluable insights, reviewing this article, and making the workshop happen, among other things.

Note: The sources are listed at the end of the article.

IKEA’s Culture Design Canvas: The Core

“The most dangerous poison is the feeling of achievement. The antidote is to every evening think what can be done better tomorrow.” – Ingvar Kamprad

IKEAS’s Company Purpose

“To create a better everyday life for the many people.”

In the booklet The Testament of a Furniture Dealer – which captures the essence of the company culture and its purpose– Ingvar Kamprad wrote in 1976, “To create a better everyday life for the many people by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.”

IKEA’s founder explained how the company has sided with the many – what’s good for its customers is also, in the long-run, good for IKEA.

IKEA’s Core Values

IKEA believes that every employee has something valuable to offer. Its core values help people work together, collaborate, and create better solutions for the many. The guiding principle is, “What’s good for our customers, is good for the company as well.”

IKEA’s core values guide people’s work to build an inclusive, open and honest culture.

Togetherness

Togetherness is at the heart of the IKEA culture. We are strong when we trust each other, pull in the same direction, and have fun together.

Caring for people and planet

We want to be a force for positive change. We have the possibility to make a significant and lasting impact – today and for the generations to come.

Cost-consciousness

As many people as possible should be able to afford a beautiful and functional home. We constantly challenge ourselves and others to make more from less without compromising on quality.

Simplicity

A simple, straightforward and down-to-earth way of being is part of our Sm책land (*) heritage. It is about being ourselves and staying close to reality. We are informal, pragmatic and see bureaucracy as our biggest enemy.

(*) small country in Swedish.

Renew and Improve

We are constantly looking for new and better ways forward. Whatever we are doing today, we can do better tomorrow. Finding solutions to almost impossible challenges is part of our success and a source of inspiration to move on to the next challenge.

Different with a meaning

IKEA is not like other companies and we don’t want to be. We like to question existing solutions, think in unconventional ways, experiment and dare to make mistakes – always for a good reason.

Give and take responsibility

We believe in empowering people. Giving and taking responsibility are ways to grow and develop as individuals. Trusting each other, being positive and forward-looking inspire everyone to contribute to development.

Lead by example

We see leadership as an action, not a position. We look for people’s values before competence and experience. People who ‘walk the talk’ and lead by example. It is about being our best self and bringing out the best in each other.

IKEA’s culture priorities

Economical sustainability even over quick profit

Functionality even over low price

Customer satisfaction even over being right

Behaviors that are rewarded and punished at IKEA

Making mistakes is the privilege of the active. It is always the mediocre people who are negative, who spend their time proving that they were not wrong

– Ingvar Kamprad

IKEA punishes/ doesn’t welcome:

Those who are too critical
Status symbols (fancy cars, overdressing, expensive hotels, etc.)
Not fitting in (those who don’t belong to IKEA’s family)

IKEA rewards/ welcomes:

Loyalty (even though its importance has been fading)
Sharing knowledge with others and giving them a hand
Heroic actions: people who go beyond the normal
Newcomers: people who bring new skills and expertise

IKEA’s Workplace Emotional Culture

IKEA’s Rituals

Design reward: the product and design teams get together to honor their best work in different categories such as design, product sustainability, etc. The ceremony is taken so seriously that people dress up for the occasion.

Hugging each other is powerful ritual at IKEA, especially considering that this is anything but common in Sweden. When people run into each other or at the start or end of a meeting, hugging reinforces the strong emotional connection between IKEA’s member. This ritual has spread across the world.

Celebrating openings: at the central office, they celebrate when new stores are opened in any country.Similarly, every Wednesday at 10 AM – via speaker – sales from the previous week are celebrated, highlighting stores and countries individual results. The data is then shared in physical boards in every office for people to track results and understand how the company is performing.

Welcome the weekend: every Friday at 3PM, music takes over the cafeteria and common areas, creating a vibrant atmosphere to remind people that the weekend is around the corner.

Prinsesstårta: this traditional Swedish layer cake or torte has become a staple of IKEA’s celebration regardless of where their stores are located. When launching a new project or celebrating the accomplishments of specific KPIs, IKEA’s celebrations always happen over a Prinsesstårta.

Food plays an important roles in IKEA’s culture. In addition to the above examples, teams celebrate the end of a project by dining together. The company provides a specific budget to team leaders so everyone can celebrate the successful completion of a project.

The launch of a new catalogue release with new offerings is also an excuse to celebrate, or the new year celebration on August 31. The same happens during Christmas eve where people not only have time (and food) together but the CEO gives the much expected annual talk including a reflection of the ending year and an outlook of the year to come.

Feedback Practices at IKEA

IKEA practices 360 annual reviews.

Employees also have regular check-ins with their managers – plus three other colleagues – to get feedback and see how they can improve.

Every quarter, teams hold a “We-Talk:” a collective feedback practice to discuss what’s working, what’s not working, and what they can improve.

In addition, the company used to run an annual employee survey called “Voice” which has now been replaced by “Ishare.”

How IKEA promotes Psychological Safety

IKEA is a company that provides a very human, family-feeling type of environment. People appreciate the opportunity to be themselves and that no one tries to standout (not much room for egos).

The home furnishing retailer has high mistake-tolerance. People are encouraged to make mistakes (as long as they learn from them. One of the company’s mottos is, “Only when you are sleeping you are not making mistakes.”

Appreciation of the positive is rewarded. Speaking up is encouraged, but without being too critical. Considering that loyalty has traditionally been cherished at IKEA, expressing a challenging opinion can backfire.

IKEA’s Culture Design Canvas: The Functional Side

How People Make Decisions at IKEA

Traditionally, authority was well distributed at IKEA; people were not just empowered, but had the ability to make decisions. Kamprad believed that there are no right decisions; the energy put into it determines whether or not it’s right.

IKEA’s founder designed a culture of freedom and responsibility – no one should hide behind the decisions made by others. He believed that common sense should guide planning. If people could provide a clear ‘why’ behind something they wanted to do, the company encouraged them to go and try it.

Cost plays a vital role in how decisions are made at IKEA, considering that cost-consciousness and simplicity are at the core of the Swedish company. Kamprad believed that, “Wasting resources is a mortal sin.” Before approving a decision, employees must really understand the costs and financial impacts.

IKEA applies consensus as a decision method though that has been changing after the reorganization. Decisions made at the top are no longer transparent and inclusive. When it comes to defining what the transformation would look like, a few peole are calling the shots with a top-down, and secretive approach. People are not only not involved, but are not being made aware of the ‘why’ behind many decisions either.

Employees who work at the store have freedom to make decisions to address issues in the moment. However, they have lost the level of independence they used to have. In the past, each store was meant to look differently; today, there’s more control from HQ.

IKEA’s Meetings Culture

IKEA’s meeting culture is informal and vibrant. Employees express that they have way too many meetings with too many participants and endless discussions. That’s very common in tribal companies.

Meetings at IKEA might lack structure, clear purpose and agendas, but teams still get work done. People enjoy the good atmosphere and strengthening bonding among team members. Participation is great; everybody talks and has a voice.

The home furnishing company is bit sloppy capturing meeting discussions and agreements.

Fika (coffee in Swedish): IKEA employees invite colleagues to have small talk over coffee and a small piece of cake. Usually, the conversation goes to unexpected places and helps people solve work issues.

IKEA’s employees have been practicing check-ins at their meetings since before it was cool.

Most IKEA offices have a large staircase in a central space that acts like a hub for collaboration and bonding. Colorful cushions add some comfort and invite people to work in this more informal setting, allowing impromptu encounters that help people solve small issues on the fly. The space is also used to make company-wide announcements, reinforcing the idea of an open culture.

IKEA’s Key Norms & Rules

Since its origin, IKEA’s founder was not a fan of rules. Kamprad believed that complicated rules limit people – they paralyze employees and welcome bureaucracy.

“Never with your empty hands” – building on the ‘give and take responsibility’ value, employees at IKEA are encouraged to take action and fix anything at the store. If a a product is missing, an article is broken, or something is dirty or not looking, people just take care of it regardless of their role, seniority, department, or expertise.

Inexpensive: IKEA expects employees to be mindful of business expenses. Status symbols such as luxury hotels, business class travel, and expensive cars are not accepted; things should look inexpensive. People must choose average hotels or airfare – some people express that the company sometimes is too cheap and has put people in sub-par accommodations.

Simplify: when presenting an idea or solution, people are expected to present complex issues in very simple terms.

Dress code: people are expected to dress casually, not overdress. No one wears a suit or formal business attire.

Employees are the brand: people are banned from posting controversial opinions on social media – even during their personal time or accounts – as this could affect IKEA’s reputation. People are expected to be ambassadors of the brand inside and outside of work.

Also, consultants cannot use IKEA as a reference for future clients. All the company rules promote humbleness, cost-consciousness, and modesty.

IKEA’s success is strongly linked to its simple, humble, human, and family-feeling culture. However, the magic seems to be vanishing; employees are not as excited as they once were. People who have spent most of their lives working at IKEA are starting to feel that they don’t belong there– or are not even welcomed – anymore.

The LeadWorkOrganize (LWO) transformation program that has been happening over the past two years is meant to accelerate IKEA’s path into the future – but at the expense of killing the foundation of what turned this unique culture into a global business success.

If you need help designing a culture for your company join our Culture Design Masterclass or reach out to learn more about our Culture Design consulting services.