ikea hrm case study

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Inside IKEA’s Digital Transformation

• Thomas Stackpole

A Q&A with Barbara Martin Coppola, IKEA Retail’s chief digital officer.

How does going digital change a legacy retail brand? According to Barbara Martin Coppola, CDO at IKEA Retail, it’s a challenge of remaining fundamentally the same company while doing almost everything differently. In this Q&A, Martin Coppola talks about how working in tech for 20 years prepared her for this challenge, why giving customers control over their data is good business, and how to stay focused on the core mission when you’re changing everything else.

What does it mean for one of the world’s most recognizable retail brands to go digital? For almost 80 years, IKEA has been in the very analogue business of selling its distinct brand of home goods to people. Three years ago, IKEA Retail (Ingka Group) hired Barbara Martin Coppola — a veteran of Google, Samsung, and Texas Instruments — to guide the company through a digital transformation and help it enter the next era of its history. HBR spoke with Martin Coppola about the particular challenge of transformation at a legacy company, how to sustain your culture when you’re changing almost everything, and how her 20 years in the tech industry prepared her for this task.

• Thomas Stackpole is a senior editor at Harvard Business Review.

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IKEA's Innovative Human Resource Management Practices and Work Culture

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Unlocking skills and growth: how ikea is empowering its workers.

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Ulrika Biesèrt, the chief human resources officer and global people and culture manager at Ingka ... [+] Group, the parent to Swedish furniture company IKEA

Employee engagement in the United States is dropping. A recent survey by McKinsey & Company reveals that worker engagement fell to 32% , down 3% from the prior year. While these individuals fulfill the basic job requirements, they do just the bare minimum. Factors that lead to disengagement include feeling undervalued, poor work-life balance and a toxic workplace culture.

In a conversation with Ulrika Biesèrt, the chief human resources officer and global people and culture manager at Ingka Group, the largest IKEA retailer, the executive shared how she looks after her 170,000 workers in more than 31 countries.

Biesèrt is committed to strengthening workers’ employability at Ingka through lifelong learning, development and reskilling. The CHRO emphasizes employee values, kindness, collaboration and prioritizing mental health and emotional wellbeing.

Values Are As Important As Performance

Employees, specifically in the tech sector, dread being subjected to a performance improvement plan, fearing they’ll be pushed out the door. In stark contrast, at IKEA, performance evaluation is equally weighted, with a 50% focus on the business KPIs, deliverables and performance goals and 50% on values and leadership.

Leadership expectations at the company cover the following topics:

• “I communicate with impact.”
• “I communicate in an inclusive and straightforward way.”
• “I act with honesty and transparency and show my vulnerability in dialogue with others.”
• “I lead by example.”
• “I live our IKEA values while performing in our business as what we do and how we do it is equally important.”

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“We ground our work in our vision and values, striving to take responsibility and take care of people,” Biesèrt said.

IKEA has several initiatives to support its workers' mental health and emotional wellbeing. The international retailer offers flexible wellness days to its employees and has a “co-worker experience manager” tasked with fostering a great workplace for employees to facilitate a great customer experience. This entails focusing on areas such as health and wellbeing, employment practices and reward structures.

Looking After Workers

The company champions the concept that everyone is a learner, has talent and can lead, referring to this movement as “leadership by all,” in which the organization empowers individuals to help lead the business together.

Employees are encouraged to share their career goals and take ownership of their development. For example, an IKEA employee can meet with their manager and openly state, “I want to become a team leader. What do I need to do to achieve that?” Nearly 90% of the company’s managers were hired from within , according to Alejandra Piñol, who is responsible for talent at Ingka Group.

Piñol said about the company’s inclusive leadership initiatives, “We want to encourage each of us to lead, to feel trusted and take decisions, so that, in turn, we better serve our customers.” She added, “Giving everyone the opportunity to lead allows for real entrepreneurship, which is in the DNA of IKEA.”

The company has a program in which staff at all levels try new assignments to gain new skills and a sense of appreciation for the jobs being carried out by colleagues. If you pop into an IKEA store one day, you may see Biesèrt or Piñol onsite doing manual tasks.

Deploying AI to Help Managers And Increase Retention

In an evolving business landscape, the company must contend with trends like digitization, automation, e-commerce, diversifying workforce models and changes in traditional retailing.

“These changes mean that life-long learning and innovation are prerequisites, and our future needs are about unlocking skills and driving growth,” said Biesèrt. To meet the demands of the future, IKEA is leveraging artificial intelligence to improve its operations and enhance the customer experience.

Biesèrt is focused on upskilling and reskilling workers for resilience in the age of AI. For instance, the company uses AI to transform call center employees into interior design advisors.

Other Use Cases For AI

• Support managers with automated retention analysis customized for their team
• Help pinpoint the employees in most need of attention and suggest topics to address
• Keep track of agreed actions
• Enables follow-up that managers take their responsibility to act on employee turnover

The deployment of AI to help increase retention has been rolled out to 122 stores in six countries, with more coming. The results from the first three countries showed an improvement of voluntary turnover by 2.7%.

Managers will conduct a probability analysis using data, such as time in their position, salary, schedules and more, to determine who is at high risk for voluntary turnover. Armed with this valuable insight, supervisors can initiate a dialogue with the employees regarding their work life.

For example, if the data shows that hours worked is the most significant contributing factor to an employee potentially voluntarily separating from the company, the manager can touch base with the employee and inquire if everything is okay and whether they feel they are working too much and any adjustments are needed. This practice also holds managers accountable for making the necessary improvements to ensure employee retention, engagement and happiness.

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IKEA Human Resources Report

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Introduction

The IKEA Corporation founded in Sweden is one of the world’s biggest companies and is listed in Holland. The firm strategises and trades in ready-made furniture, pieces of equipment, and home-based fittings (Starkey 99). In fact, IKEA is renowned for its devotion to incessant product expansion, operating details, and cost control.

The above firm attributes indorses IKEA to lessen its rates through an average of 2-3% for over one decade in anticipation of global expansion in the fiscal 2010 (Starkey 206). In essence, the department of strategic HRM is typically intended to empower IKEA to accomplish the employees’ wants in an operative way (Sadler 107). Equally, the strategic human resource management aims at realising the administrative objectives at an appropriate time (Sadler 110).

The IKEA human resource executive manages all the aspects in the corporation that influences the workers. The human resources management aspects comprise of engagement, matters of payments, advertisements, and employee training (Henry 76). The IKEA HR administrator is engaged in the inspiration of personnel, provision of awareness regarding safety measures and other employee well-being.

The aim of this is to place the corporation at a better competitive advantage for profitability (Henry 88). Thus, this paper analyses the strategic human resource management practices of IKEA including aspects such as culture, performance management, leadership style, and innovativeness (Starkey 122).

Vision and Mission of IKEA

The IKEA products are designed in Sweden but mainly produced in most of the emergent nations to help in cutting down the costs (Starkey 216). The customers execute the ultimate assembly for the majority of IKEA products. The IKEA vision is to generate a healthier and unremarkable daily existence for several individuals across the globe. The predominant mission of IKEA is supported by the corporate idea that outlines the firm’s marque to the customer (Sadler 10).

The mission of IKEA Corporation is to offer widespread well-made and serviceable home-based furnishing merchandises at reduced prices (Sadler 136). Therefore, the mission of IKEA Corporation is a comprehensive vision. Backing the corporation up by means of strategic HR makes the mission of IKEA achievable and its products to appear real (Sadler 100).

Approaches in managing 4 SHR axes

IKEA employs diverse approaches in managing the administration capability, staff prospective, and skill echelons. The personal administration, performance reward, as well as talent ensure proper expectancy and age-band gap organisation.

The corporation manages people based on diverse backgrounds, preserve and nurture motivation, and lead groups of experts (Henry 84). The approaches used by IKEA helps the management in studying the requirements of employees and customers to ensure that they possess the capabilities and resources necessitated for performance (Henry 87).

The management is committed in ensuring that the IKEA styles, norms, values, and beliefs are intact (Henry 89). The held and fixed manufactured article, rites, norms, outlooks, expectations, and morals have direct influence on administration. Thus, the management involuntarily adjusts and sustains the organisational culture through stakeholders and employees (Henry 67).

The IKEA procedures in which operations are executed encompass the decision-making, processes, and system structures. The firm employs proper human resource database and inventories that might be needed for legality submission (Sadler 16). The inter-IKEA systems enable the valuation and evaluations of value addition besides augmenting efficiency through traceability and consistent operations knowledge. The systems foster the mainframe systems (CRM and ERP) prompt growth (Sadler 13).

Organisation

IKEA manages organisation in terms of reporting lines, job roles, and structure. The proper organisational design makes IKEA to boasts of a well-driven regeneration and implementation strategy (Sadler 136). IKEA possess flat organisation with uncluttered and operator driven novelty challenge bordering the business (Sadler 133). The initiated approach helps IKEA to deal with any problems that arise from such challenges.

IKEA approach in resourcing

IKEA uses different approaches in resourcing. External outsourcing is one of the approaches that IKEA uses to perform its recruitment practices (Henry 66). Outsourcing is effectual due to extremely specialised workers who are needed for vocation in trivial organisations affiliated with IKEA.

The HR ensures that the strategy is appropriate and internal recruitment or campus hiring is used (Henry 77). The IKEA human resources management may find suitable candidates within the premises and nurture them for vocation. Equally, IKEA uses external sourcing and collaborate with other executive search corporations in recruiting specialised and managerial personnel (Henry 101).

Advertisement of employment opportunities

IKEA employs many strategies to advertise job opportunities. The different approaches in advertisement are targeted at inexperienced employees besides skilled technical and administrative staff (Starkey 116). The advertisement is done through recruitment organisations, social media including the Google, Twitter, Facebook, and LinkedIn (Starkey 21).

The Corporation aims at driving the passive applicants and fashions the IKEA product awareness through the HR. The strategic Human Resources stands a chance of reaching the qualified candidates for the position of professional and executive through advertisement (Starkey 212).

Changes in IKEA HR

Change is important in any competitive organization like IKEA since it convey development. Change is essential in business performance experiencing low consumer services, inadequate RIO, and deteriorating proceeds and incomes (Henry 96). External environment might influence the cultural changes in an organisation (Starkey 216). At IKEA, eternal changes like financial conditions, proprietorship change, legal and political situation, as well as marketplace variations triggers change in HR.

IKEA performance management processes

The IKEA performance management encompasses the majority tasks associated with performance. The strategic management identifies talents in all areas to ensure quality work (Henry 46). Besides, the corporation manages under performance, targets the imminent presentation, and engages its employees in achieving the maximum profits. At large, one may absorb that IKEA is known for rewarding its dealers, evaluating the past presentation, and complying with the entire business requirements.

IKEA resource base

The IKEA Corporation boasts a strong resource base that is rationalized by diverse facets of planning and management. These include both Succession planning and talent management which ensure that the approach of resource base remains important to both the organization and its employees. The contemporary organic resource base employed by IKEA enables it to invent a stronger competitive advantage.

The resource base allows for the auditing of talents and jobs to evaluate the expected future wants in relation to the reaction of the existing resources. The management employs assessment of surplus and regeneration, creates in-house job marketplaces with proper job description, and as well does financial forecasting and cost-benefit breakdown (Henry 46).

Development and learning opportunities at IKEA

The quick rate of technological changes requires regular training of the workforce to remain relevant in their respective roles. Training the workforce enhances skills and knowledge essential to development of new products. Organisations that are high performers invest time and financial resources in educating and training the workforce. The training, development and learning opportunities are aligned to the needs of IKEA.

Trained employees are typically competent based on the training they receive. Learning behaviors that make individuals to improve their performance necessitate rewarding to sustain competitiveness. The approach ensures that IKEA benefits from the training mediated by the workforce’s skills, behavior and attitudes.

Conversely, technology-oriented researches indicate that teamwork plays a fundamental role in eliciting innovation. Teamwork influences the organisational performance and improves productivity, innovativeness and morale. IKEA implements professional team development initiatives to encourage the teams to work as a unit (Henry 46). The IKEA’s holistic approach to conducting business begins with the philosophy that the strength of the organisation is based on respect for people, learning and development.

The business assumes that the more people it has the more the production and consequently the profitability of the firm. However, instead of having a massive workforce that is not engaged in research and development, innovativeness and engagement, the firm seeks to develop a workforce based on the aforementioned perspectives. As such, the firm attains competitive advantage and shared prosperity.

IKEA communication and employee engagement

IKEA continues to establish diverse policies and initiatives regarding communication and engagement of workers from different echelons of society. Essentially, diverse management policies have been critical in enabling the underprivileged people to access employment prospects.

The organisation and all its stakeholders appreciate the fact that they belong to the wider global corporate citizenship. The firm promotes initiatives that enhance development of communities in which it operates. Through such responsibilities, the firm shows close partnership with various communities and customers (Henry 76). All the employees are made to believe that appropriate corporate actions geared towards developing communities as well as customers are critical for the growth and progress of the firm.

IKEA working environment

IKEA consists of diverse workforce, customers, suppliers, and stakeholders. The diversity within the workforce is the central competency that provides increased competitive advantage. In the current global competitive market, engaging diverse employees and including all levels of business processes is critical for the attainment of the organisation’s objectives. IKEA tends to capitalise on the diverse competencies existing within the workforce to attain the set objectives.

Actually, all employees are made to acknowledge different roles they play in the organisation and orient their skills, strengths, and perspectives towards attaining the set goals. The employees’ competencies, strengths, and views are valued by the organisation. Moreover, IKEA tends to encourage participatory and inclusive workforce.

At the organisational level, the firm organises teams with complementary skills to achieve particular goals. As well, line managers are allowed to come up with individual strategies that enable the attainment of the required objective.

The firm promotes integrated teams of site leaders and line managers working together to generate an all-inclusive culture where respect of individual contribution is valued (Starkey 116). The teams provide leadership, knowledge-based opportunities, and enhance communication amid individual employees and immediate managements besides assisting in the realisation of the managerial multiplicity strategies.

The culture of IKEA

IKEA has practices, management behaviours, and activities that determine the culture of the organisation. For instances, the management embraces diversity within the workforce. Diversity is one of the cultural aspects that have led to the success of the organisation. In fact, being a large corporation the diversity within the workforce cannot be avoided. As such, the firm must embrace diversity within all work processes in order to be successful (Starkey 161).

The manner in which the organisation manages diversity determines its success. IKEA values diversity in all levels of the organisation and work processes (Starkey 161). Besides diversity and inclusion, the firm values other cultural aspects including corporate citizenship, trust and respect, safety, integrity, quality, hard work and success along with innovation.

IKEA rituals, artefacts, and vales

IKEA culture supports diverse aspects of artefacts, services, models, approaches, beliefs, expectations, and values. Actually, the employee interactions in regards to these aspects have direct influence on the brand and performance of the organization. The impressions are mechanically improved and sustained by the shareholders and workforces. The senior management of IKEA embraces the shared values, norms, beliefs and behaviours in the organization.

The open culture used by IKEA is strong enough for any fresh employee to identify his/herself with. The Company enjoys long term success owing to the innovative practices and behaviours linked to the culture. The culture is innovative, people oriented, aggressive, detail oriented, stable, team oriented, and outcome oriented.

Therefore, it characterizes employee habits, beliefs, symbols, systems, working language, norms, visions, and collective values. In strengthening the culture with employee, inter-group and employee’s interaction with stakeholder and customers is subjective (Henry 89).

IKEA leadership style

Leadership style plays a critical role in the motivation of employees. The management and leadership style removes obstacles that alienate employees from work processes. IKEA adopts the style that creates positive changes and inspires employees towards attaining goals of the organisation.

The transformational type of managing employees is one such style of leadership. Transformational leadership is characterised by its inspirational nature and positive changes it creates in an organisation. In order to achieve increased performance among employees, IKEA takes into consideration the concerns of employees. The leadership style focuses on encouraging workforce to attain the goals of the organisation. In effect, the leadership style is geared towards creating positive change among employees (Sadler 136).

Major transitions at IKEA

Transition revolves around reaching the target clients at the shortest time possible, in the most convenient way and at the least cost possible (Sadler 133). IKEA strives to create a channel of distribution that endeavours to attain the major operational goals. The transitions are based on the mission of providing value to the customers at affordable prices.

The strategic operations include modernised supply chain, customer oriented management, and corporate strategies. IKEA is currently focusing satisfying the customer shopping experience in all stores. The firm has streamlined and harmonised operations with supply chain processes in order to speedily respond to the needs and requests of customers (Sadler 153).

The program in the retail operations is to discover and disseminate best-in-class practices, procedures, and measures to guarantee continuous implementation of novel and innovative standards. Technology is the major driver to attain the required standards.

IKEA has continued to adopt system landscape, supply chain, and exchange demanding scheduling procedures (Sadler 133). The adaptation of the business processes has enabled the firm to enhance in-season flexibilities experienced in the fashionable products, attain increased responsiveness to varying trends, and accomplish the economies of scale. Essentially, the entire firm’s operations are focused on fulfilling the consumer needs.

The current strategic operations of the firm can be observed in an increased capital investment on the development and improvement of retail stores. IKEA has developed a large centre in its headquarters to combine all the products under one roof increasing the growth of sales.

The diversification processes of the operations require the supply chain to reflect on the customer needs, vision, and mission of the firm (Sadler 133). Furthermore, IKEA is focusing on the supply chain design that mirrors the client needs to enhance sourcing of the distinctive merchandise to the stores. The adaptation of the appropriate supply chain design results in increased competitive advantage.

IKEA change process and defining moments

Kotter 8 steps, step 1: creating sense of urgency.

IKEA teams assist in the realisation of the managerial strategies, provide leadership and novel visions, and enhance communication between individual employees and immediate organizations.

Step 2: Generating the guiding coalition

The Company heartens the leading team for change to be effective in decision making. Yet, it adequately clarifies the diverse values, reinforces visions, empowers performance, aligns communications, targets high impact zones, and underscores on achievement.

Step 3: Developing change vision

The firm has elastic, practicable, appropriate, conceivable, and contagious vision that enlightens the future success to every participant in the Company.

Step 4: Communicating the vision for buy-in

The IKEA airs its vision through organisations, social media including Google, Twitter, Facebook, and LinkedIn. The notion ensures that communication is invitational, repeatable, vivid, simple, and consistent with the vision and the organisation strategy.

Step 5: Empowering broad-based action

IKEA promptly deals with the change barriers through making the employees to comprehend the need for change. Similarly, the firm modifies its resources, reviews the formal politics, and motivates employees as a reward of organizational success.

Step 6: Generating short-term successes

IKEA puts in place standards like initiating fresh products that foster success within the shortest time possible. The Company makes such accomplishments vibrant, definite, and simple and champions the directors and other corporate frontrunners to destabilize the credibility of resistance of skeptics.

Step 7: Never letting up

IKEA has initiated more projects in different nations and employed many people to instigate change. Besides, the top management has implemented fresh practices and behaviours besides rewarding the employees to motivate and boost their morale during the process of change.

Step 8: Make it stick

The Corporation reviews and adjusts actions after the change developments. The Corporation celebrates its achievements after measuring the performance in change inventiveness among employees. The continuity of development of new products and services to ensure change is secured in the existing culture of IKEA after the management communicates the feedback from the change results.

IKEA set-ups change using various implements like power, management and leadership. Through organizational power, IKEA apply elements of pressure (sanction, coercion, punishment, and threats) to instigate change in the mind of employees. For success, the management provides information in its normal ritual, tradition, systems of measurements (Sadler 133).

However, IKEA management and organisational power has implemented change through operational processes, systems of control, role description, training, enticements, promotion, as well as hiring and firing. Conversely, negotiation, learning, strategic planning, and decision making marks implementation by both the management and leadership tools.

IKEA innovation

The firm encourages continuous improvements on the products and services (Sadler 133). In fact, the firm has put in place activities that promote excellence and innovativeness among employees. Inventiveness is one of the cultural practices that directly increase the firm’s competitive advantage. Besides, innovativeness among employees is encouraged particularly in the development of new products and services (Sadler 133).

As indicated, the strategic management structure as well as leadership style in IKEA remain critical factors that influence the work performances. The relationship between motivation, employee engagement, and communication other than work performance is direct. The likelihood of attaining increased performance on motivated employees is very high. In other words, there is high likelihood of attaining increased performance on highly motivated employees.

Works Cited

Henry, Anthony. Understanding Strategic Management. Oxford, UK: Oxford University Press, 2008. Print.

Sadler, Philip. Strategic Management. London, UK: Kogan Page Publishers, 2003. Print.

Starkey, Ken. Strategic Management: Issues and Cases. Hoboken, NJ: John Wiley & Sons, 2009. Print.

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HRM Practices in IKEA: A Case Study Review

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