The Testament of a Furniture Dealer

The 1970s at IKEA were characterised by innovation and expansion. The company opened new stores constantly, and created a raft of now iconic products – including LACK, BILLY and IVAR. It tested new materials, and started focusing more and more on the family’s needs in the home. The early 1970s were also a time when the company’s ideas really started taking shape: to make and sell home furnishing products at low prices. And in the middle of this expansive decade, Ingvar Kamprad and his family decided to move to Denmark. Given the restrictive Swedish foreign exchange regulations and prohibitive taxes, it became apparent that it would be hard to grow the IKEA business internationally from within Sweden. For four years, the Kamprad family lived close to the new group office in Humlebæk, after which it was time to move again, this time to Switzerland. But of course the move increased the distance to Älmhult. How could Ingvar see all his new and old employees? The ability to chat to his co-workers would virtually disappear. This at a time when the ongoing expansion made the need to talk about the corporate culture and the IKEA approach to work greater than ever.

To keep the IKEA culture going, Ingvar decided to write down the ideas behind IKEA in nine points. Summarising his thoughts about how IKEA should develop moving forward, even when he was no longer active in the company, enabled him to reach everyone who would shape the IKEA of the future.

The Testament of a Furniture Dealer was published in 1976. The document contained the most important cornerstones of the IKEA business. Ingvar formulated the overriding social ambition, the IKEA vision, as “To create a better everyday life for the many people”. And this vision would be achieved through the company’s business idea: “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.”

But how to achieve this goal? With the help of dedicated IKEA co-workers who share these values, according to Ingvar. He understood that a strong culture in the company would not only inspire but also challenge his co-workers. The culture would give work a bigger meaning than just a means of livelihood.

The first point in The Testament of a Furniture Dealer established that the product range is the company’s identity. This meant that the range should reflect IKEA. It should be simple and straightforward, hard-wearing and easy to get on with. Everything from sofas to frying pans should be perceived as typically IKEA in Scandinavia, and typically Swedish outside of Scandinavia. Functionality and quality should be good, and adjusted to needs. What’s more, the price shouldn’t be just any old low price, it had to be a low price with a meaning! IKEA should work actively on technical design, product design, distribution and materials in order to keep costs as low as possible, without affecting quality. Price was crucial since IKEA was targeting the many people, and particularly those with less money.

The words simplicity and together appear often in the IKEA culture.

The other eight points look at other areas, such as the IKEA spirit: a special sense of community built around enthusiasm, and a desire to help and take responsibility. A spirit based on humility and simplicity. The text talks about how profit brings resources, and how to deal with that wonderful problem: “If we charge too much, we will not be able to offer the lowest prices. If we charge too little, we will not be able to build up resources”. We learn that “Expensive solutions to any kind of problem are usually the work of mediocrity”. At IKEA, the key is to achieve good results with small means. You cannot respect a solution until you know what it costs. Simplicity is seen as a virtue, and exaggerated planning is said to be the most common cause of corporate death. The Testament has some quite powerful wording, far removed from the somewhat more polished management language of today. Both the language and the content made it clear that this was not just another company. This company dared to be different, while taking responsibility. It was optimistic too – the future was called ‘glorious’. Apart from the visionary content, the document was primarily a fairly concrete guide for how to conduct your work. The words simplicity and together appear often in the IKEA culture.

And what kind of people can achieve all these targets? Well, seeing as IKEA looks more at personal qualities than education when recruiting, the company is looking for a team of humble, strong-willed enthusiasts who value a simple, positive lifestyle, where people and togetherness are important values. And many IKEA co-workers do feel a special IKEA spirit.

What Ingvar Kamprad wrote down in 1976 in his ̒testament’, still very much applies today, and it can be regarded as a kind of constitution for IKEA. Later additions have been made, such as the glossary A Little IKEA Dictionary, in which Ingvar defined words that are an important part of the IKEA culture.

A lot changes in society and at IKEA, but the basic principles of The Testament of a Furniture Dealer never do: what IKEA is and how it conducts itself, these things are eternal. Ingvar was convinced that a strong, clearly defined culture is the most important factor in continued success.