Ingvar Feodor Kamprad was born in 1926 on a small farm in the Swedish province of Småland. He had an austere upbringing and the lessons he learnt in frugality stayed with him thoughout his life.
At the age of six, the boy started a business selling matches to neighbours. He bought the matches in bulk and sold them in small inexpensive packs. He went on to sell seeds, pens, pencils and even fish in this way. In 1943, he founded IKEA using his initials and those of Elmtaryd Agunnaryd, his childhood home.
In 1947, he began buying and reselling furniture but, by the mid-1950s, his local suppliers complained that he was selling their goods too cheaply, so he decided to design and make his own products. Kamprad came up with a new concept. He took apart assembled furniture and developed flat pack kits from which customers could assemble their furniture. They were simple and affordable for customers. The packs took less space than regular furniture, so they saved IKEA money in transport and storage. Kamprad believed that everyone should be able to afford stylish modern furniture and that IKEA could meet this need.
The business grew, expanding first across Scandinavia and then the world. At the IKEA opening in Shanghai, there were 80,000 people keen to visit the store. In 2016, IKEA could boast over 370 stores with over 880 million visitors a year in total. Kamprad achieved this growth without ever borrowing money or issuing stock.
Kamprad has become one of the richest men in the world, yet he retains and embodies a frugal approach. At the age of 85, he still travels the world to visit IKEA stores. He drives an old Volvo car, stays in cheap hotels and flies economy class. He addresses IKEA employees as coworkers and encourages everyone to dress informally, enjoy work, give excellent service and keep costs down.
Innovate the process by transferring some of the job to the customer. Clients in IKEA stores act as warehousemen when they collect their goods and they act as furniture assemblers when they put their flat packs together. This saves costs, but the customers do not complain. They enjoy the competitive prices and the challenge of assembling the units.
Practise frugal innovation. Most innovators have limited resources, so it is important not to waste them. Kamprad has set an example all his life of keeping costs down, keeping prices down, minimising waste and maximising customer satisfaction.
Retain a distinctive culture. Although IKEA is a global brand, it has a very Scandinavian culture and atmosphere. For example, the same product names are used worldwide. Beds have Norwegian place names, sofas have Swedish place names, tables have Finnish place names, whilst chairs and rugs have Danish names.
DID YOU KNOW?… Every IKEA store has a play area for small children. It is called Småland, the name of the Swedish province where Kamprad was born, meaning small land in Swedish. Parents can stay in touch with their children through mobile devices.