I = Interviewer G = Goran Nilsson
I And now to IKEA. The Swedish furniture retailer has just reported turnover of 56 billion Swedish kroner from its 150 stores worldwide. Now, IKEA puts its success down to corporate culture. So with me today to explain the secret of IKEA's culture is Managing Director of IKEA UK, Goran Nilsson. Good morning, Mr. Nilsson.
G Good morning.
I Now is every IKEA store really exactly the same?
G Well, in terms of culture they're pretty well uniform. Although our culture will naturally bond with the local culture to some extent, our core values such as simplicity and cost-consciousness are valid in all cultures. So we don't need to adapt the way we operate to run our stores. And as for products, although we make some minor adaptations to suit local tastes, we produce exactly the same catalogue in all 28 countries.
I And where do these values originate?
G It all goes back to Sweden in the 50s and 60s. IKEA's founder, Ingvar Kamprad, started the company at a time of democratic and social change …
I Are IKEA's values those of its founder, then?
G Well, they have evolved over the last 57 years, of course, but I think our mission statement 'A better life for the majority of people's still very much reflects the spirit of those early years. Having said that though, I think Ingvar's ability to relate to a co-worker in China today would be pretty limited, thought.
I You mentioned China. How does IKEA cope with such diversity amongst its employees?
G Well, funnily enough, I've been working for IKEA for 15 years in Sweden, Italy, Canada, the USA and what's struck me most is how much we have in common. People may interpret certain concepts such as responsibility and freedom differently but our core values such as humbleness exist in every country.
I So, what are the advantages of such a strong corporate culture?
G They're tremendous. For one, there's a real bond between our operations around the world. It's easy to transfer across borders because you know the values will be exactly the same. And from a marketing and positioning point of view it's very advantageous as well. But the real pay-off is that it makes IKEA unique. You can clone our products and our store concept but not our culture. It takes years to build and it has to be maintained daily.
I But how do you educate 40,000 workers?
G We begin by making sure people understand the values. That's why the IKEA Way seminars are so vital. All managers attend them and then it's their responsibility to pass the message on. Corporate culture also figures in meetings …
I Do you use educational videos and brochures as well?
G Videos and brochures are helpful tools but only if used in conjunction with 'walking the talk' and discussing values with management. We have various initiatives which regularly provide co-workers with the opportunity to participate and contribute to these discussions.
I So, does culture affect IKEA's recruitment process?
G It has a major impact. Although it's important for us to get highly-skilled people into the company, we're not interested if there's a conflict of value systems. Anyone expecting a flash car or status symbols has no future with us. Recruitment at IKEA's an extensive process, based on judgements about a candidate's value systems and attributes. We can add retail skills, no problem, but it's tough to change someone's mindset.
I Does that go for career advancement too?
G Yes, it does.
I So Swedish managers will always have more chance of promotion then?
G We find that many Scandinavians identify more easily with our culture but there is no written or unwritten rule concerning the nationality of senior managers. It would be impossible, however, for anyone to advance within IKEA without wholly understanding and buying into the company's philosophy and culture. So managers are encouraged to visit Sweden and learn the language etc. and management inductions include at least one week in Almhult, where the company began.
I And finally, Ingvar Kamprad stepped down as President in the mid-80s, replaced by Anders Moberg. What effect did this have on the development of IKEA's culture?
G Both Moberg and our current Chief Executive, Anders Dahlvig, worked closely with Kamprad for many years and have a deep knowledge and understanding of Kamprad's original vision and philosophy. Naturally, IKEA is different today than it was 10 years ago, primarily because it is three times bigger and has entered many more diverse and challenging markets. But our values and mission to provide quality, affordable products for the majority of people remain very much in situ.