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.
A new compass
In the mid-1990s, IKEA was rocked by accusations of child labour. At the time the company was the world’s largest furniture retailer, with almost 100 stores in 17 countries, and production in 70. As success for IKEA increased, so too did the media’s scrutiny. Revelations of child labour would lead to a new compass – cooperation with UNICEF and Save the Children, and codes of conduct on everything from child labour to environmental impact.
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?
Ingvar Kamprad loved mistakes, as long as you learnt something and didn’t make them again. “It must be allowed to make mistakes. It is always the mediocre people who are negative, who spend their time proving that they were not wrong,” he wrote in The Testament of a Furniture Dealer in 1976. The way Ingvar saw it, the fear of making mistakes was “the enemy of development” and “the root of bureaucracy”.
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.
IKEA in Stockholm
When IKEA opened its first store in Stockholm in summer 1965, it was Europe’s largest furniture store. It was big and it looked good, but it wasn’t exactly efficient. In fact you might say that it wasn’t until the store burned down five years later that IKEA really got the hang of the store concept. Along the way there were colourful little plastic balls, revolutionary posters, and a famous museum in New York. But it all began with a king in a muddy ditch.
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.