The Bolt that Holds the Ikea Empire Together
Ingvar Kamprad is no ordinary multi-billionaire. The founder of the IKEA furniture empire travels economy class, drives a 10-year-old Volvo and buys his fruit and vegetables in the afternoons, when prices are often cheaper. Ask him about the luxuries in his life and he says: ˝ From time to time, I like to buy a nice shirt and cravat and eat Swedish caviar.
Mr Kamprad is one of Europe’s greatest post-war entrepreneurs. What began as a mail-order business in 1943 has grown into an international retailing phenomenon across 31 countries, with 70,000 employees.
Sales have risen every single year. The IKEA catalogue is the world’s biggest annual print run-an incredible 110m copies a year. And Mr Kamprad has grown extraordinarily rich. He is worth $13.4bn (£8.7bn) and is the 17th richest person in the world, according to Forbes, the US magazine.
The concept behind IKEA’s amazing success is unbelievably simple: make affordable, well-designed furniture available to the masses. And then there is Mr Kamprad himself- charismatic, humble, private. It is his ideas and values that are at the core of IKEA’s philosophy.
Best known for his extremely modest lifestyle, he washes plastic cups to recycle them. He has just left his long-standing Swedish barber because he found one in Switzerland, where he lives, who charges only SFr14 (£6) for a cut. ˝That’s a reasonable amount,˝ he chuckles.
All IKEA executives are aware of the value of cost-consciousness. They are strongly discouraged from travelling first or business class. ˝There is no better form of leadership than setting a good example. I could never accept that I should travel first class while my colleagues sit in tourist class,˝- Mr Kamprad says.
As he walks around the group’s stores, he expresses the feeling of ˝togetherness˝ physically, clasping and hugging his employees. This is very uncharacteristic of Sweden. ˝Call me Ingvar,˝ he says to staff. The informality and lack of hierarchy are emphasised by his dress style, with an open-necked shirt preferred to a tie.
Mr Kamprad has had both personal and business battles. He has fought against dyslexia and illness.
One of Mr Kamprad´s characteristics is his obsessive attention to detail. When he visits his stores, he talks not only to the managers but also to floor staff and customers. A recent visit to six of the group’s Swedish stores has produced ˝100 details to discuss˝, he says.
By his own reckoning, his greatest strength is choosing the right people to run his businesses.
He is determined that the group will not go public, because short-term shareholder demands conflict with long-term planning. ˝I hate short-termist decisions. If you want to take long-lasting decisions, it’s very difficult to be on the stock exchange. When entering the Russian market, we had to decide to lose money for 10 years.˝
Mr Kamprad has been slowly withdrawing from the business since 1986, when he stepped down as group president. He maintains that he is still ˝too much involved and in too many details˝, although he admits to a distinct reluctance to withdraw altogether.
The question is: can there be an eternal IKEA without Mr Kamprad? Does the group depend too much on its founder? Will the empire continue, as control of IKEA gradually moves to Mr Kamprad´s three sons?
From the Financial Times
Answer the questions
1. Why is the founder of IKEA not an ‘ordinary’ multi-billionaire? What are
luxuries for him?
2. How did his company start?
3. How many people are there in the IKEA furniture empire?
4. What’s the main philosophy of IKEA’s success?
5. Prove that Ingvar Kamprad leads an extremely modest lifestyle.
6. What is the best form of leadership according to the IKEA’s executives?
7. How is the company’s feeling of “togetherness” expressed by the author of the
article?
8. What is Ingvar Kamprad’s greatest power, according to his own words?
9. What was the company’s prediction when they entered the Russian market?
10. What’s Ingvar Kamprad’s attitude towards short-term decisions?
11. Would you like to work for him?
12. When is the correct time for a leader to leave his company?
13. What does abbreviation IKEA mean?
14. What winning formula is behind IKEA's success?
Read the article again and make notes about Mr Kamprad under these
headings.
Wealth /Personality /Lifestyle /Leadership style
Find words or phrases in the article that match these definitions.
1 an awareness of the price of things . . ..
2 the feeling you have when you are part of a group of people who have a close
relationship with each other . . ..
3 a relaxed and friendly situation without too many rules of correct behavior
4 the lack of a system in an organization where a group of people have power or
control . . .
5 an extremely strong focus on every small fact or piece of information
Discuss these questions.
1 What, in your opinion, are the strengths and weaknesses of Ingvar Kamprad?
2 Would you like to work for him?
3 When is the correct time for a leader or founder to leave his or her company?
Summary making practice.
Steve Job’s speech.
“I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I’ve ever gotten to a college graduation. Today I want to tell you three stories from my life. That’s it. No big deal. Just three stories.
The first story is about connecting the dots.
I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?
It started before I was born. My biological mother was a young, unwed college graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set for me to be adopted at birth by a lawyer and his wife. Except that when I popped out they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking: “We have an unexpected baby boy; do you want him?” They said: “Of course.” My biological mother later found out that my mother had never graduated from college and that my father had never graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would someday go to college.
And 17 years later I did go to college. But I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents’ savings were being spent on my college tuition. After six months, I couldn’t see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all of the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back it was one of the best decisions I ever made. The minute I dropped out I could stop taking the required classes that didn’t interest me, and begin dropping in on the ones that looked interesting.
It wasn’t all romantic. I didn’t have a dorm room, so I slept on the floor in friends’ rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on. Let me give you one example:
Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn’t have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating.
None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied the Mac, it’s likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards ten years later.
Again, you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.
My second story is about love and loss.
I was lucky — I found what I loved to do early in life. Woz and I started Apple in my parents garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4000 employees. We had just released our finest creation — the Macintosh — a year earlier, and I had just turned 30. And then I got fired. How can you get fired from a company you started? Well, as Apple grew we hired someone who I thought was very talented to run the company with me, and for the first year or so things went well. But then our visions of the future began to diverge and eventually we had a falling out. When we did, our Board of Directors sided with him. So at 30 I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating.
I really didn’t know what to do for a few months. I felt that I had let the previous generation of entrepreneurs down – that I had dropped the baton as it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I was a very public failure, and I even thought about running away from the valley. But something slowly began to dawn on me — I still loved what I did. The turn of events at Apple had not changed that one bit. I had been rejected, but I was still in love. And so I decided to start over.
I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.
During the next five years, I started a company named NeXT, another company named Pixar, and fell in love with an amazing woman who would become my wife. Pixar went on to create the worlds first computer animated feature film, Toy Story, and is now the most successful animation studio in the world. In a remarkable turn of events, Apple bought NeXT, I returned to Apple, and the technology we developed at NeXT is at the heart of Apple’s current renaissance. And Laurene and I have a wonderful family together.
I’m pretty sure none of this would have happened if I hadn’t been fired from Apple. It was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick. Don’t lose faith. I’m convinced that the only thing that kept me going was that I loved what I did. You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle.
My third story is about death.
When I was 17, I read a quote that went something like: “If you live each day as if it was your last, someday you’ll most certainly be right.” It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: “If today were the last day of my life, would I want to do what I am about to do today?” And whenever the answer has been “No” for too many days in a row, I know I need to change something.
Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.
About a year ago I was diagnosed with cancer. I had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. I didn’t even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months. My doctor advised me to go home and get my affairs in order, which is doctor’s code for prepare to die. It means to try to tell your kids everything you thought you’d have the next 10 years to tell them in just a few months. It means to make sure everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes.
I lived with that diagnosis all day. Later that evening I had a biopsy, where they stuck an endoscope down my throat, through my stomach and into my intestines, put a needle into my pancreas and got a few cells from the tumor. I was sedated, but my wife, who was there, told me that when they viewed the cells under a microscope the doctors started crying because it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and I’m fine now.
This was the closest I’ve been to facing death, and I hope it’s the closest I get for a few more decades. Having lived through it, I can now say this to you with a bit more certainty than when death was a useful but purely intellectual concept:
No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life’s change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.
Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.
When I was young, there was an amazing publication called The Whole Earth Catalog, which was one of the bibles of my generation. It was created by a fellow named Stewart Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This was in the late 1960′s, before personal computers and desktop publishing, so it was all made with typewriters, scissors, and polaroid cameras. It was sort of like Google in paperback form, 35 years before Google came along: it was idealistic, and overflowing with neat tools and great notions.
Stewart and his team put out several issues of The Whole Earth Catalog, and then when it had run its course, they put out a final issue. It was the mid-1970s, and I was your age. On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: “Stay Hungry. Stay Foolish.” It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.
Stay Hungry. Stay Foolish.
Write a 15 sentence summary of the speech.
Decision-making.
Discuss these questions.
What is decision – making?
1 How important are rational and emotional factors when making decisions about the following?
- a present for someone a new company logo a partner
- a holiday destination a new product to develop someone for a job
2 Think of an important decision that you have made. How did you decide?
3 Do you think men and women have different ways of making decisions?
4 Who makes big decisions in your household?
Which ideas below do you agree with? Which do you disagree with? Why?
1 Before making a decision it is advisable to:
a) write down pros and cons
b) take a long time
c) have a sleep or rest
d) consult a horoscope
e) consult as many people as possible
2 If a choice has cost a lot of time and money, stick to it.
3 Rely on the past to help you to make a decision.
4 Reduce all decisions to a question of money.
5 Be totally democratic in group decision-making.
Role play this situation. You are board members of a manufacturing firm.
As your company is making a loss, you must cut costs. Hold a meeting to decide
which one of these options to follow.
A Cut factory workers wage by 10% С Make 50 employees redundant
В Pay no end-of-year bonus D Reduce everyone's salary by 8%
Useful language - Asking for facts
Can you bring us up to date?
Can you give us the background?
Where do we stand with?
Making a suggestion
We should sell out as soon as possible.
Why don't we sell out?
Disagreeing
I don't agree with that at all.
I totally disagree.
Identifying needs
We've got to get more information.
We need more information about where we're going wrong.
Agreeing
You're absolutely right.
I totally agree with you.
Expressing doubt
I am worried about the store's location.
I'm not sure about that.
Making a decision
The solution, then, is to keep the store going.
I think, on balance, we feel we should keep the store going.
Stating future action
So, the next thing to do is ... .
What we've got to do now is ... .
Text 5.