I have a confession.
I have a professional crush.
And the object of my affection is IKEA.
The Swedish retailer has long been a bastion of innovation and creativity. It doesn’t always get it right, and has its share of design fails and problematic ethical decisions under its belt. However, its approach to product, innovation, and strategy regularly stand out as beacons of light in a sea of business headlines that could be straight out of the 1980s book of management.
Here are four IKEA stories from the last year that I’ve been admiring.
Since 2021, IKEA has been training its 8,500 call centre teams as virtual interior designers, a new paid service that customers can access without the hefty price tag of paying an interior designer.
Why this is interesting: There’s a lot of noise about organisations looking to use AI as an excuse to lay off swathes of staff, so it was refreshing to see IKEA leading with a clever strategic move in a different direction. More recently, it has also announced its plans for training over 30,000 staff in AI, with the aim of harnessing the benefits of people using this technology at scale across the organisation.
By dealing with a proportion of easier customer inquiries with its new ‘Billie’ AI customer service system, they’ve been able to build a whole new revenue stream with the retrained call centre staff. This new paid virtual interior design service brought in €1.3bn of revenue in the 2022 financial year, or 3.3% of total revenue, which the company is aiming to get to 10% of total revenue by 2028. IKEA is clearly seeing this as a move to tap into the multi-modal ways that gen Z customers will expect to interact with brands.
The future of home, the future of work, gen Z customer habits, and AI, all in one example; what’s not to love?
With so much uncertainty in the world, instead of rigid budgets and financial forecasts, IKEA is using scenarios to plan for potential different situations, to make better decisions as and when the world changes around them.
Why this is interesting: Leaders are constantly looking for certainty, but in today’s world we cannot assume that the future will look like the past. Instead of fighting against this with fixed budgets and financial forecasts, the company is building scenario planning into its regular business operations, forcing leaders to think about a variety of potential situations playing out, and how they might respond.
This embedded use of scenario planning means that IKEA can be more prepared, and more flexible to anticipate and respond to change. Done well, they will be actively watching external signs that something is changing in order to know which scenario might emerge, and therefore what strategies to execute in response.
UK-based IKEA in-store staff will become ‘life at home experts’ as part of a partnership with the housing charity Shelter. The training will give IKEA staff the skills “to help people in precarious housing situations to understand their rights in the hope it will help them keep their home”.
Why this is interesting: Complex problems require multifaceted solutions, and from less obvious places. This insight that people who might be facing housing insecurity may also be visiting IKEA stores, is a great example of previously unrelated industries or groups coming together to solve problems.
This story also prompts an interesting thought around the future skills of retail workers. Could we see retail workers overlap more with the work of frontline mental health and domestic violence workers, as people might feel safer going into a retail space than they would be going to a dedicated support centre.
Late last year, IKEA Australia announced a suite of new benefits to its Australian enterprise agreements. These benefits included “a fixed rostering option, a four-day work week, full and part-time employment only with no casual roles, five weeks of annual leave, paid parental leave regardless of tenure, superannuation on unpaid parental leave”, and a number of new categories of leave.
Why this is interesting: Retail is an industry that faces a more difficult challenge when it comes to flexible ways of working, due to the inherent in-person nature of the frontline work. However, IKEA has shown that some of these fixed approaches to retail work can be challenged.
IKEA’s new policies move to reduce the flexibility gap that often exists between head office and store workers, reduce the instability that retail workers can experience, and give more leave options. These raise the bar not only for the retail industry but the expectations for Australian employers more generally.
There are many companies that take interesting, modern, progressive approaches to respond and shape the industries they operate in. Seeing companies like IKEA lead in the way they often do always makes me wonder about the secret sauce; is it just embedded into Scandinavian culture? Are IKEA leaders more courageous, and therefore more open to taking different approaches? Or are they just better at working out loud and sharing what they’re doing? Either way, when I see an emerging challenge I often wonder: what will IKEA do?
Steph Clarke is a futurist and facilitator based in Melbourne.
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Steph Clarke is a futurist and facilitator who helps organisations stay relevant for tomorrow. She’s also the host of Steph’s Business Bookshelf podcast. She has worked for, and with, organisations such as EY, Tyro, Hollard, Lifeblood, and Perpetual.
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