Ikea's Former CEO on How to Collaborate
How do you do collaboration well? It's a question that vexes anyone running a business, because everything we do involves other people, whether employees, customers, or vendors. The topic came up recently when I was talking to Anders Dahlvig, the former CEO of IKEA. He's emphatic that a collaborative culture is central to the company's success. But it's easy to talk about collaboration—how do you make it happen?
"When you grow from scratch, you develop in functional boxes: sales, product development, that kind of thing," Dahlvig told me. "It's how all businesses starts off. But then they reach a size where that doesn't work any more. You can't cooperate because you're stuck in your boxes. So the earlier you build cross-functionally, the more effective you will be. A lot of companies wait too long."
"In the beginning, people join a new business because it is entrepreneurial and there's a lot of scope for individual contribution. They like doing their own thing—that's the very nature of entrepreneurship. So when you have to change the culture to become more cooperative, it feels to them like you are questioning the fundamental values of the business. You necessarily find yourself in a kind of cultural crisis and some companies don't overcome this; They end up with a mess."
IKEA, I suggested, had somehow gotten through their cultural mess. So what made the difference between survival and failure at this critical moment?
"You have to know really what you want. Lots of CEOs don't know! You have to be very decisive and strong and cross this river—that is a really tough process. We managed to do that because we set our minds on it. It was a ten year process and I'd say we are still not through it yet. But I think the key thing was this: You have to be prepared not to promote strong performers who are great alone but not great collaborators. I see that all the time: People who are good at optimizing themselves but cannot work with others. It's really tough to say, "You have to go.' But if you don't get rid of these people, you will never overcome your demons."
It's encouraging, I think, to know that IKEA found it hard to create a collaborative culture—and took it slowly. It is, in my experience, phenomenally difficult, and the pushback you get can be enough to wear down the stubbornest CEO. But while it's tempting to imagine that exhortation alone will force people to collaborate, it won't. You need the right structures. You need the right people. You need the courage to lose the people who may well have given you your start in the first place.
In his new book, The Ikea Edge, Dahlvig writes eloquently about the importance of choosing the right employees and nurturing them. IKEA was famous for promoting from within. Doing so, of course, reduces your costs but I think it works primarily because it reduces your risk. You know your internal hires far better than you can ever know someone you meet through recruiters. Even the best interview in the world can be misleading; Watching someone develop over the years shows you far more.
So what did Dahlvig look for in employees? What made them great collaborators and contributors?
"It wasn't formal education. In home furnishing and retailing you don't need to be a scientist! The traits that stand out are energy, social confidence, common sense, the ability to learn from experience. Of those, I'd say energy and being able to work with other people were the most important. You can learn everything else."
Margaret Heffernan is an entrepreneur and author. She has been chief executive of InfoMation Corporation, ZineZone Corporation, and iCAST Corporation. In 2014, she published her fourth book, A Bigger Prize: How We Can Do Better Than the Competition.