4 Secrets of IKEA's Innovation Culture

IKEA has become a household name associated with affordable design. That’s a result of its unique innovation culture. So, we asked one passionate IKEA leader for practical tips on building an innovation community.  

IKEA was founded 80 years ago in Sweden as a mail-order sales business. Today, it’s the world’s largest furniture retailer, known for its innovative cost reduction and continuous product development. Its total retail sales for FY23 reached EUR 47.6 billion, a 6.6% growth from the previous year. IKEA’s fundamental business model innovation is that customers assemble the products themselves. A Harvard Business Review study shows that this IKEA effect is a positive psychological process, explaining that consumers place a disproportionately high value on products they created themselves. Plus, this business model reduces costs, simplifies logistics, and allows IKEA to focus on functional design and cost-effective manufacturing.

Examples of innovation at IKEA

What is IKEA’s secret to innovation? One advantage is their organizational culture. IKEA encourages employees to adopt a continuous improvement mindset, seeking incremental improvements to how products are made and delivered. According to IKEA, the company’s values were shaped during a time in Sweden when living conditions were harsh. This fostered a culture of entrepreneurship that made people more pragmatic and mindful of resources. 

In a recent episode of the ITONICS Innovation Rockstars podcast, Justyna Baber, IKEA’s Innovation Community Leader for Retail Innovation, shared four of IKEA’s innovation secrets and valuable insights on bringing people together to solve problems at a global company like IKEA. 

Create regular innovation community meetings 

Dedicating specific time for collaborative innovation and creativity can be a game-changer, says Justyna, because it keeps everyone involved and active. Once a month, she gets people from different departments who are interested in innovation together in a video call. They then have an open conversation about initiatives that fit within IKEA's strategic focus fields. They also give the stage to the Insights Team to present big reports, which attracts a lot of interest.

Sometimes, people jump in and just open their microphones and talk. A lot of times, the participants comment in the chat, and it starts buzzing. Justyna says this creates banter and energy. People feel excited because the conversation is interesting and useful. It's self-perpetuating; the better people feel, the more they want to contribute. She also recommends highlighting success stories to provide examples of what's possible and celebrate innovators within the organization.

Facilitate. Don’t be the expert.

Justyna’s goal as an innovation leader is not to push a message; it’s to facilitate colleagues' communication and collaboration. She says, “This is the ultimate aspiration, to have the conversation going with only a slight kind of help from backstage. The community itself is made by people.”She points out that all communities are networks, but not all networks are communities. The difference is that a community has a common sense of belonging, a shared identity. An innovation leader’s role is to find this common denominator between people. This could be an innovation ambition for the company or a problem everyone wants to solve. 

Innovation teams need to shift from merely developing ideas to taking a facilitating role within the organization. The most effective approach is empowering colleagues to apply their creativity to propose innovative solutions to problems close to their area of expertise. Provide them with the freedom to be proactive while setting the company's strategic focus areas as guardrail limits to ensure what they come up with remains relevant and feasible. 

Don't portray yourself as the expert custodian of innovation in the company. Instead, become an accelerator of the ideas originating from individuals within the organization who likely possess firsthand knowledge of problems and opportunities. Foster creativity by creating a space that reduces the pressure to give the 'right' answer. Including more people makes them more likely to buy into your mandate and contribute valuable ideas.

Break hierarchical barriers

IKEA fosters an environment with flat structures and short communication lines, free from hierarchical barriers, where anyone can approach anyone else. Justyna says IKEA's organizational culture is shaped by its retail operations, characterized by a sense of urgency, a willingness to act, and a no-nonsense attitude. This openness sparks collaboration. 

Justyna describes IKEA as a disruptor with a culture encouraging every employee to think like an entrepreneur. The benefit of this mindset is that it empowers employees:  

Because of the flat structures, there is always a way to try to implement those ideas if you are really passionate about them. So I think IKEA has a fantastic ground for both collaboration and innovation, and all this is pushed with the low-cost attitude, which then makes things more practical.

A can-do attitude combined with a test-and-learn approach gets them the results. The innovation community they've created enables cross-functional collaboration, so people aren’t alone in the challenges they’re tackling.   

Get external perspectives

With such a strong internal culture of collaboration, IKEA has also developed a healthy external ecosystem for innovation. Justyna explained why:

“We can't solve today's challenges on our own. And this is true for any company. The world is too complex, and the issues are too systemic to try to solve them within the confines of one organization.”

Drawing from her background in consumer insight, Justyna emphasizes the importance of incorporating external perspectives into decision-making, especially in innovation. She believes that engaging with the outside world—whether for gathering insights, brainstorming, or developing solutions—ensures that innovation doesn't occur in isolation. So, how does IKEA’s external collaboration work, and what value does it bring? 

In one of their recent initiatives, the "Star of Tomorrow" program, IKEA collaborated with design students from the Technical University in Delft and Hyper Island in Sweden. They invited students to develop ideas together with IKEA, and while the results might not always be groundbreaking innovations, the true value lies in the process. Justyna says that engaging with students offers insights into how young people think, what they prioritize, and what excites them. She also appreciates the candidness of students, who usually provide straightforward and refreshing perspectives.

These external initiatives allow IKEA to tap into external knowledge and ideas, bridging the gap between academic and business thinking. It creates a two-way flow that enriches the students as well as IKEA.

Use ITONICS to enhance collaborative innovation

Justyna Baber’s examples from IKEA show the importance of the human side in creating an innovation community. At ITONICS, we’ve developed a software solution that enhances collaborative innovation. We’ve seen that organizations get better results when they have a centralized platform to gather insights, develop ideas, and execute innovation projects. To see how ITONICS provides a digital ecosystem for corporate innovation, book a demo with our experts today.