Acorns, oaks, behemoths

What we can learn from Ikea and other big companies that were once small.

Thoughts occur to you in the strangest of places. The other day I was sitting in the cafeteria at Ikea and was attracted to a sign on the wall. I should have written it down because it read so well.

Anyway, the message was that customers could help keep prices down, and the way they could do it in relation to food was to clear their own table after they had eaten and place their tray and everything on it in the tray receptacles located strategically across the cafeteria. I paid $3.95 for a great shrimp salad!

Later on I saw stacks of their catalogues in receptacles with a suggestion written above it requesting customers to take one and use it but then leave it at the checkout counter before they left the store. When you read their literature, they are full of ideas as to how to reduce the cost to the customer. They are also full of ideas of how to be environmentally friendly.

The first thing that occurred to me about this was “what a great idea to constantly come up with ways to reduce the cost to the customer”. It is not the first time I have come across the idea. When we shifted recently we used a firm called Minimovers and they were full of ideas as to how to reduce the cost of moving and these ideas really helped us to reduce the cost. How often do we think of ways and means of reducing the cost of our product to the customer?

So, that was lesson one. Are we in the business of making a positive difference for our customer and constantly engaged in the dialogue of how to make things easier and less costly for them? Perhaps you can do an audit of your business to see what protocols you have in place, not so much to reduce cost of itself, but to reduce the cost to the customer.

Lesson two was slower in coming, but more profound. In the business schools I have attended in the USA, the emphasis is constantly on case studies of famous and big companies. Rarely do you do a case study on the unknown “one person” business or private partnership business that is doing pretty well in Phoenix, Arizona or Savannah Georgia, or Shepparton in Victoria Australia.

I found the programs in leading business schools in USA helpful in developing some concepts of management, but whenever I am involved with a client it is more likely to be that little unknown business to the point where I often wonder what benefit it is to study the cases of big businesses in business schools.

Sitting in the cafeteria at Ikea, I learnt the answer. If we want to grow, we can learn a lot from businesses that have grown from being very small to being very big, and there are oodles of them around the world.

Not only that, but the very nature of their operation constitutes an education program in growth. Ikea was founded in Sweden in 1943 and run from the founder’s home. His vision in those days was “affordable solutions” and that has been the mission of the business ever since. It has grown from a back yard business to the multinational giant it is today, driven by that simple mission of making things as affordable as possible for the customer.

Wal Mart is another example of a guy who had a little store in Arkansas which has grown into the behemoth that it is today. Once again, the mission was to bring products to people at prices as inexpensive as possible. In the early days, the people targeted were those in towns that were ignored by the big boys.

Microsoft is another company, despite the monopolistic activities of which it is suspected, that was founded virtually in a backroom with a vision of making computer technology available to everyone. Fundamental to this was the development of operating software that could be purchased for tens rather than tens of thousands of dollars.

Anyway, these were two lessons that occurred to me sitting in that cafeteria. We can learn a lot by looking at what big companies have done in the past when they were as small as ours or smaller, to become what they are today. The second is that a vision of constantly finding ways and means of making things less expensive for the customer is not a bad philosophy.

I believe, without any research but based on experience, that companies such as Telstra which are spin offs from being governmental monopolies, have no good lessons to teach us, but they do provide serious pointers to things that you should not do if you want to grow. But more of this later!

Louis Coutts left law and became a successful entrepreneur. His blog examines the mistakes, follies and strokes of genius that create bigger, better businesses. Click here to find out more.

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