What do you do if you are told to do the impossible? Say no? Well, in this particular case it wasn’t an option for Paulina Pajak. She is a Product Developer in the Lighting department, which develops the global IKEA product range. The person looking for the impossible was IKEA founder Ingvar Kamprad, who walked into the department and said: “We’re going to sell LED bulbs for less than one euro.”
18 months in smoke and dust
Following some intensive years of expansion in the 1970s, IKEA suffered serious growing pains. Many new stores had opened in Europe, and the workforce was increasing dramatically. Meanwhile, the organisation itself had barely developed since the 1960s. Communication was slow, and costs rose while quality fell. The oil crisis was just the last straw. A serious concerted effort was now needed, before it was too late.
Swedish manufacturers did not have the capacity to meet Ingvar Kamprad’s demand. And a lot of the Swedish suppliers were also boycotting IKEA. So Ingvar decided to look for suppliers beyond Sweden. He had already begun working with Danish designers and manufacturers, but now it was time to turn towards Poland.
At the end of the 1950s, the IKEA catalogues looked completely different to the later editions, with their styled homes and well-planned rooms. In fact, if we’re honest, the photos in the early catalogues were pretty threadbare. A sofa, a rug and a lamp, pulled together into a little group, sometimes by Ingvar Kamprad himself. All that was soon to change when a certain Brita Lang made an entrance at IKEA.
Everything falls apart
Before 1989, production behind the Iron Curtain was a cornerstone of the long-term purchasing strategy at IKEA. Ingvar Kamprad came here back in the 1960s when he was boycotted by furniture makers and the sector as a whole in Sweden. Planned economies like Poland had raw materials at low prices, as well as state-owned factories with great capacity and a need to do business with the West, as eastern currencies could not be used in the West or exchanged for dollars. IKEA made major investments in run-down factories, installed machinery and spare parts, and built up skills. So what happened when the Iron Curtain suddenly fell?
How did a self-described failure from Småland become one of the world’s most successful entrepreneurs? In excerpts from our new Ingvar Kamprad exhibition, close coworkers share stories about his drive, curiosity, creativity, and the ability to see problems as opportunities. In the exhibition Hej Ingvar! at IKEA Museum, you can view and listen to many more stories.
Step into IKEA and of course you are met by all kinds of furniture and other stuff, but not before you’re greeted with a huge Hej!, Swedish for ‘hello’, at the store entrance. You might say that the entire corporate culture exists in this hej. Not a slick how-do-you-do-sir-or-madam-what-can-I-get-you, just a simple hej.
Ingvar in America
In the early 1960s, Ingvar Kamprad started planning for further expansion of IKEA in Scandinavia and the wider world. But before focusing on the company’s journey, he wanted to broaden his own horizons. He went to the US to learn everything he could about distribution. But could the Americans really impress a man from Agunnaryd?
Towards the end of the 1940s, IKEA started selling furniture, and it very quickly became the main business. Always thinking of challenges as opportunities brought about all kinds of innovations in purchasing, finances and distribution. The foundation for this was already in Ingvar Kamprad back in the days when he worked on a small scale with pens and pipes at home – but the power and opportunities in the gap between customer and manufacturer really materialised in the 1950s.
Meet Ingvar Kamprad
How did a regular young lad from Älmhult become one of the world’s most successful entrepreneurs? Classic Småland ingenuity and stubbornness are probably just part of the answer. Ingvar Kamprad was very much shaped by his childhood, which was filled with love and imagination. A childhood in which the grown-ups had time to play and listen. A safe world surrounded by forest and meagre soil. The ideal place to play businessman.
More than a low price
IKEA is a balancing act between seemingly conflicting ambitions. Sales machine or inspiration? Business or people? For IKEA, it’s never been about choosing one or the other, it’s always both. Ingvar Kamprad’s original idea to offer products with both a low price and good quality has grown into a strong culture and identity. It is still a driving force at IKEA today.
Ingvar Kamprad’s experiment in selling furniture went well. So well, indeed, that the traditional furniture industry felt threatened by the rebel from the province of Småland. A price war started, boycotts were introduced, and competitors used every trick in the book to stop IKEA.
In September 1964, a sensational article was published in a Swedish interior design magazine, claiming that a 33 kronor (EUR 3.30) chair from IKEA was better than a virtually identical chair that cost five times as much. IKEA was delighted, but the rest of the furniture industry was furious and threatened to boycott the magazine.
Involvement in philanthropic causes at IKEA can be traced back to the 1950s, when Ingvar Kamprad’s mother Berta fell ill with cancer, and Ingvar started a fund for cancer research. Later on, more funds and foundations were set up for everything from good design and children’s rights, to the climate and well-being for the elderly. What all these things have in common is a vision to create a better everyday life for the many people.
The birth of IKEA
The trading company IKEA was registered on the 28th of July, 1943. But it was a far cry from the furniture company we know today. In his early years as an entrepreneur, Ingvar Kamprad imported pens, watches and nylon stockings, learning the ropes of purchasing step by step. But after some problems with import licences he started looking for new opportunities, and decided to focus on furniture. A business model gradually took shape when he realised that there was a major, interesting opportunity between the customer and manufacturer.
The Testament of a Furniture Dealer
Long before the rest of the world started talking about corporate culture, Ingvar Kamprad wrote down his vision and ideology for IKEA. He called it The Testament of a Furniture Dealer. It describes how IKEA needs to act to remain a successful, vibrant company. So what exactly is it all about?