Tuesday, January 29, 2008

Knowledge exchange key to IKEA's success



A recently presented doctoral thesis at Lund University School of Economics and Management in Sweden, "Knowledge across borders - a study in the IKEA world" by Anna Jonsson, concludes that employees willingness to exchange knowledge is the main success factor behind IKEA's global expansion (for Swedes, here's an article in Dagens Nyheter).

Anna Jonsson says that she got access to the world of IKEA to study the knowledge exchange when IKEA establishes themselves in new markets. Her main conclusion is that knowledge exchange within IKEA is the single most important factor behind their global expansion, and that the participation of the employees is crucial to their success.

To make the knowledge exchange work, the employees must be willing to share their experiences with each other. Anna Jonsson points out that many companies have a hard time getting their employees to share what they know since it is often not benefiting them to do so: “Within IKEA you learn that it is necessary to share knowledge and to be willing to learn new things – it can give you good career possibilities.”

Anna Jonsson has noted how important it is for information to flow easily throughout the IKEA organization and says that there are open channels between different organizational levels and units within IKEA.

I have worked at IKEA as a consultant and I believe I can sign to this. The clear IKEA vision and values which are communicated everywhere - even in the toilets! - and the open atmosphere with open-minded people certainly makes you more willing to share what you know with others. You are always sure that you will get something back when giving away what you have. Furthermore, at IKEA there is a reverse dress code – you dont see corporate suits, especially not accompanied by a tie. This way, management does not distinguish themselves from other employees. And everybody at IKEA, even the top management, have to work in one of the IKEA stores for a few days every year.

It don't think it is that hard to copy the IKEA business concept. In fact, they talk openly about it in their marketing communication. But, what would be really hard to copy is their culture. Then, why try to copy? If other companies would just allow themselves to get inspired by the IKEA culture, they would probably get much better at collaborating and exchanging knowledge.

Speaking of knowledge, a recent Swedish study concluded that the most commonly used phrase in Sweden is "I don't know", followed by "Where are you?" and "What's for dinner?". I am not all that surprised. At work, most of us are struggling with trying to find information or people that can help us do things we don't know how to do. That's how my day looks like before and after lunch. At lunch time, the big questions pop up; "Lunch anybody?", "Where shall we go?" and "What shall I eat?". My own standard answer to all of these questions is "I don't know" (or "I'm just goint to...").

I assume that if we all get better at answering these questions faster, productivity will explode.

2 comments:

  1. I'd argue that the core of the success is subtly different. Good knowledge-sharing is extremely important, yes; but here it's a more a symptom than a direct cause of IKEA's success. As you imply but don't actually state, anyone who tries to just copy the knowledge-sharing, without the culture that makes that knowledge-sharing not just possible but desirable, is going to get nowhere, yet have no means to understand what's going wrong.

    The vision and values are extremely important also; but again they in themselves are not 'the key'. The real key to how this happens is how all threads are integrated into a single whole - not how any one part works, but how they all work together.

    That integration is necessarily different for every enterprise, since each is inherently unique in some way. But at a slightly more abstract level, the overall map of how everything ties together is not unique - in fact it's clearly identifiable and measurable, in terms of 'ability to do work' in the broadest sense of 'work'. And from the work I've been doing for the past few years, that metric of 'integration' can be correlated directly with long-term performance (or lack of it) for commercial organisations.

    (Some years back I developed an online tool to elicit this metric in as little as fifteen minutes - see www.tetradian.com/semper, if you're interested.)

    Anyone who tries to copy IKEA's business-model in a mechanical way, item-by-item, is setting themselves up for disappointment. They'll do better trying to copy key components such as knowledge-sharing; they'll do better still if they try to recreate (but not simply copy) IKEA's culture. But to make it really work, they need to understand far more how these elements all weave together. Hence 'Enterprise 2.0' and the like.

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  2. Hi Tom,

    I'd say that the core of their success is their focus on their human capital - all the people who make it all possible. Their employees are their key to success and they know it very well. In is not just about recruiting and retaining the right people, but also about creating a sense of belonging and a common vision that is not just words but actually mean something. And making sure that these share the same vision and core values that make people want to help each other, such as simplicity and honesty. If you dig a lot deeper than that and analyze organizational structures, processes and systems, you will find that IKEA is not much more different than other companies. All too often, we think that we can "engineer" or "architect" an organization to make it succesful. Improve it, yes. But the foundation must be there. It always comes down to the people that have gotten together to achieve something together.

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