#370 The Founder of IKEA: Ingvar Kamprad

Highlights

• 2024-11-15 14:36 And the way that Ingbar spoke about this, it sounded and reminded me a lot of what Sam Walton would say about the importance of cost control in his autobiography. There’s multiple different quotes from his autobiography where Sam talks about this.

• 2024-11-15 14:35 Ingvar Kamprad founded IKEA when he was 17 years old and worked on it until he died at 91 years old. He wrote what they called the Ikea Company Bible. It’s a document. It’s called the Testament of a Furniture Dealer.

• 2024-11-15 18:45 And when he’s 22, he decides to try to advertise what he calls an armless nursing chair that he calls Ruth.

• 2024-11-15 18:44 And so when he’s 17, he founds the firm IKEA. The I is for his first name, the K is for his second name, the E is for the name of the farm he grew up on, and A is for his hometown.

• 2024-11-15 19:12 He’s very emotionally like his emotions are right at the surface. He describes his leadership as the noble art of hugging management and says he’s must have hugged several thousand IKEA employees.

• 2024-11-15 18:59 And so the wave that Ingvar Kamprad rode was the fact that Sweden’s countryside was quickly becoming depopulated, right when he started selling furniture. During the 1950s alone, 50,000 farms closed down, and those people moved into either the cities or the suburbs.

• 2024-11-15 14:57 That’s why I hope that we will never have two identical stores. Dynamism and the desire to experiment must continually lead us forward.

• 2024-11-15 14:56 Ingvar is saying the exact same thing here, and he’s not shy about this. Listen to what he says here. Do not forget that exaggerated planning is the most common cause of corporate death.

• 2024-11-15 14:52 A job must never be just a livelihood. If you’re not enthusiastic about your job, a third of your life goes to waste.

• 2024-11-15 18:55 You know what I would say, I guess about this is Ingvar has an unusual personality compared to many of the people that you and I study. Way higher levels of insecurity. He’s constantly crying. He’s very sentimental.

• 2024-11-15 18:53 It was to be one of Ingvar’s great sorrows and the cause of some soul searching. That business made him neglect his three sons as they grew up. He has done everything to make up for it since.

• 2024-11-15 14:38 There’s a line in Andrew Carnegie’s biography that describes him. It said cost control became nearly an obsession. Sam Walton, Andrew Carnegie Ingvar I talk about Henry Ford in this episode.

• 2024-11-15 14:43 It is about an outstanding and natural genius, an incorrigible capitalist so relentlessly obsessed by the lure of profit and power that he used a thousand tricks to endow his creation with eternal life.

• 2024-11-15 14:43 That was an excerpt from the book I want to talk to you about today, which is Leading by design, the IKEA Story. And it was written by Bertil Torkel, with a lot of close association with Ingvar Kamprad himself.

• 2024-11-15 14:46 All nations and societies spend a disproportionate amount of their resources on satisfying a minority of the population.

• 2024-11-15 14:53 Profit is a wonderful word. It is a word that politicians often use and abuse. Profit gives us resources. He says it again.

• 2024-11-15 14:54 Any designer can design a desk that will cost $5,000.Butonlythemosthighlyskilledcandesignagoodfunctionaldeskthatwillonlycost$100.

• 2024-11-15 15:00 Making mistakes is the privilege of the active. Making mistakes is the privilege of the active.

• 2024-11-15 15:01 Experience is a word to be handled carefully. Experience is a break on development. Many people cite experience as an excuse for not trying anything new.

• 2024-11-15 15:15 When he was a child, he realized, my obsession will fix the financial problems of my family.

• 2024-11-15 18:40 This point of his life, the fact that his grandmother was a fan of Hitler and sympathetic to the Nazi movement.

• 2024-11-15 18:45 And he would look at things in all these businesses, like, this just cannot be rational because it seems to waste time and money. Remember, he says wasting time and money is a mortal sin in ikea.

• 2024-11-15 18:48 So we were faced with a monumentous decision to allow IKEA to die or to find a new way of maintaining the trust of the customer and still make money. And so Ingor is having a bunch of conversations with early employees at ikea.

• 2024-11-15 18:57 And in the 1960s he said, this one, one mistake, this one tragic Investment cost IKEA 25 to 30% of their total assets at the time.

• 2024-11-15 19:10 Number one, a good cash reserve must always be insured. Number two, all property must be owned.

• 2024-11-15 19:11 So the original IKEA company becomes a holding company whose profits are moved to a tax exempt nonprofit, who then later moves that money into this foundation called Inca, which is based in the Netherlands.

• 2024-11-15 19:13 He said owning the properties might slow our pace of growth, but it provides security. No landlord can come in in 10 years time and raise the rent by 20%. He believes in the ability to wait out difficulties.