He's a CEO who gives his managers "permission to go crazy"... Previously, he was an assistant to the founder of Ikea. Someone who is not afraid to admit his wrongdoings. The founder of Ikea was not particularly keen on e-commerce. But Brodin...
Ikea has revolutionized retail since the 1950s. He convinced people to come and shop far from the city center, wander through labyrinthine stores to find the furniture they were looking for, bring the products home, and assemble them in person. But soon after Jesper Brodin took over as CEO in 2017, the truth emerged: Customers were fed up with these procedures.
Head of Ingka Group, which operates Ikea stores, Brodin traveled to Spain, England, Sweden, the USA, Canada, Japan, China, and Russia and spoke with customers. Their message was the same: we love Ikea, but it's not working for us. Their main complaint was that they could not find a suitable place for them.
Jesper Brodin (born November 9, 1968) is a Swedish business leader and the chief executive officer (CEO) of Ingka Group. During his career at IKEA, Brodin has held a number of different roles including assistant to Ingvar Kamprad, Business Area Manager Kitchen and Dining, as well as managing director for Range & Supply, Inter IKEA Group.
Brodin describes customer feedback: “I can't go to Ikea if I need two folding chairs when I come home from work on a Tuesday night after the kids eat and do their homework. If you do not offer opportunities that meet my conditions, I will stop choosing you.”
Swede Brodin, who has a calm speaking style, was once an assistant to the legendary founder of Ikea, Ingvar Kamprad.
He says he prepared a "travel report" based on customer feedback, and as a result, he realized that they needed to develop the new strategy that Ikea needed.
“We were the ones who disrupted the furniture world in the 1900s. The technology revolution and new retailing suddenly disrupted our order. So I clearly understood that the business would no longer depend on our decisions. Customers would decide our future.”
Brodin has led change on different fronts: Ikea has invested heavily in online businesses to catch up with competitors like Amazon and Alibaba, which have shut down many of their customers. He tried the small store concepts that the company had long resisted in big city centers and shopping malls. It offered new services such as home delivery and paid furniture assembly, for which it made one of its largest acquisitions, acquiring TaskRabbit.
One element that made Brodin's task difficult was Kamprad's presence. Kamprad, who founded Ikea in 1943 at the age of 17, created a unique culture by creating a corporate structure that was more challenging and complex than the company's furniture assembly instructions. This complex structure not only minimized taxes but also prevented the company from going on the stock market and being taken over by someone else.
Kamprad was not particularly keen on e-commerce. “Around 2005 or 2008, Brodin began to see concerns, not opportunities. He has taken a very clear stance that we should not take the e-commerce route due to fear of costs and the deterioration of the best aspects of our value chain.”
When Brodin took office, Kamprad was weakened and died a few months later. But he had returned to Sweden after living in Switzerland for decades to pay less taxes. Although his return put more pressure on Brodin, the new CEO saw no choice but to leave the past in the past and embrace e-commerce.
“There was a basic awareness that we were not the forerunner of the decision. Something had changed in society,” he says.
In his Ikea uniform of shirt and overalls, Brodin admits it took a long time to build the momentum for change within the company. “As a leader, you have to stay at the forefront, inspire and focus on the details. You also have to deal with problems that seem impossible to solve,” he says.
He talks about two main challenges in the transformation process: “We had to accept that we were going to change our business model, at least partially. On the other hand, there is the fear of the unknown. But the idea of doing nothing seemed unattractive either.”
The plan seems to have worked. The online sales share, which was 6 percent, increased to 25 percent. The new small store, located inside a mall in central Stockholm, has increased customer traffic in the capital from 6 million to 9 million. In the past, Ikea only had two stores outside the city.
They are preparing a book of mistakes
Although Kamprad does not share the same digital vision, many of the values he created continue to live in Ikea. Admitting mistakes is one of them. Kamprad would often stop meetings and ask the principals to list his mistakes. Following the same path, Brodin gave senior executives the "power to go crazy" to overcome their fear of making mistakes. The theoretical answer is this: If managers take a risk and don't get paid, they are forgiven by Brodin from the start. Employees compile a book of the best mistakes. The aim is to encourage entrepreneurship and innovation in a company that has grown this big (Ingka's revenues in the last financial year were 42 billion euros).
“Customers want to see everything”
Brodin doesn't set himself apart from the rest. He describes how he made three mistakes at the Madeleine store in Paris. Ikea initially decided to forgo the labyrinth layout for a freer design, but there was a backlash from customers.
Feedback was received as “I want to make sure I see everything”. The labyrinth has been rearranged with signposts announcing shortcuts. They also experienced logistics problems in the city center. Ikea learned the trade through trial and error.
Large stores also serve as warehouses for online
Another wrong decision was to focus too much on new small stores instead of the big ones that make up the main part of the business. “We fixed it,” he says. Some of the digital problems are solved thanks to the existing Ikea stores. Instead of building new warehouses to meet online orders, the company makes them more efficient by using its stores outside the city.
Brodin's motto is "Love the past, create the future".
Jesper Brodin's 24 hours
6:00 Departure. I wish I did yoga, but I don't.
7:00 Breakfast together if my family is at home. Juice, non-dairy coffee, and sandwiches. If my wife is at home, she reminds me to take my vitamin supplements.
9:00–10:30 Travel times I usually start the day by talking to managers and colleagues about what's going on and off at the Ikea store.
12:00–13:00 A simple and quick lunch like a salad or sandwich. If I am in an Ikea store, I also eat meatballs, I love them.
12:30–16:00 Meetings with my colleagues on how to get better. (Sometimes I wish we didn't have so many meetings.)
16:00–17:30 Emails, phone calls, and return if I've been to one of the offices. End of the day.
17:30-19:00 Sports hour. These days, I'm into padel tennis, we are playing with three of my close friends.
19:00–22:00 Dinner. I spend time with my wife and three teenage children. I play guitar. I am reading a book.
22:00 Time to rest. I try to sleep 7-8 hours because the days are hectic and I travel a lot.