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Jesper Brodin IKEA Interview with Jonathan MacDonald

Jesper Brodin IKEA Interview with Jonathan MacDonald

JONATHAN MACDONALD [00:00:08] Hello, this is Jonathan MacDonald here, welcome to Disruptive Live and I’ve been waiting for this moment for quite some time. About probably 10 years ago, I met a very impressive individual called Jesper over in, I think it was either in Almhult or Delft. I think somewhere I think it was in Delft in the Netherlands. And from that moment onwards we struck up a relationship that has ended in, well at the moment, not ended actually where we’re just beginning, but it resulted in in part in Jesper writing the foreword to my book, Powered by Change, which I was deeply honoured by but also the progress that his small little company has had in the last ten years, especially in the last few years with him at the helm, has been remarkable. And so it is with every single fibre of honour in my body to welcome to Disruptive Live, Mr. Jesper Brodin, the chief executive of INGKA which, of course, is the group company that includes all the IKEA retailers and everything else. And I think Jesper I just want to say thank you so much for for joining me today. How you doing?

JESPER BRODIN [00:01:19] Thank you, what an introduction. Thank you very much. It’s it’s Friday. I have the pleasure to for once I actually get to work at home so, so it’s just an excellent time, the opportunity to touch base with you Jonathan. Thank you.

JONATHAN MACDONALD [00:01:32] Can you just for 20 seconds give an overview of your role and what you’re in charge of and then we’ll dive into, to the Interesting stuff.

JESPER BRODIN [00:01:41] Yeah, so basically the actually when we met the first time, it was somewhere in between Almut and Delft, it was in Malmo I recall it when you had your erm your fire starting speech about the innovation that touched me and stressed me to be honest deeply. Those those days I was responsible for the product development, design and supply of IKEA. And since two years back, I’m leading a big part of the retail shopping centres, digital, the logistic side of IKEA, the customer side of IKEA if you like. So that’s what I’m up to. Yeah.

JONATHAN MACDONALD [00:02:19] Excellent. And so you and I have experience since we first met, all manner of change in the world. And I remember one of the first things I said to you guys, actually, when I first met you was that today is the slowest pace of change we’ll ever experience. And the change in the next five years will feel like the change of the last twenty five years. What are the main changes that you’ve witnessed from, you can say from an IKEA perspective, but also from personal perspective. What have you what have you observed that’s changed the most?

JONATHAN MACDONALD [00:02:51] Well, I think, again, going back back a couple of years, I still remember your narrative, your sarcasm around this might not be relevant for you in IKEA and you have a lot of time. And I think, you know, it was a very good message to us. And because in a way for for many years as it can be, your own success can be your limitations, over time. Now, basically, basically, what just happened is a couple of things that has been out of our influence in IKEA. Technology has shifted and as such, we have seen a major shift in competition, customer behaviour. So that’s one I would say one of two major changes that has partly brought us into some threats, if you like, as a concept and as a company. But then as we have made our journey, we’ve seen that on the contrary, there are so many opportunities for us to be a better IKEA thanks to those changes that we were maybe not curious to at the first hand.

JONATHAN MACDONALD [00:03:56] I commend you for your bravery in looking into those things. I have to ask you on the dawn of where we have this huge climate change protests happening right now in London and I was in Scotland this morning and it was problematic to actually get to the studio in time to make the interview due to the climate change protesters. But you have been going a large on climate change on on LinkedIn. And and I’m I’m fascinated to to get your opinion on the importance of the climate and your company’s activities. Are you, how how much are you prioritizing this topic?

JESPER BRODIN [00:04:31] You can say together with our friends, in inter IKEA, or suppliers of IKEA etc we have set up for three objectives in the new world. One is to continue, but in new ways to become affordable. The other one is we call it accessibility. And that’s all about how we, and which I’m happy to talk about, how we actually find new ways to make ourselves accessible to people where they are and when they want. Now, these changes are super exciting, but the big transformation really is about sustainability. And for us, and you know, it’s it’s interesting because and I want to contribute to this change of the narrative, if you like, because what we discovered is as much as we believe in sustainability and we believe in our our obligation to being a big company, to be in the forefront of resolution of the challenges. What I think people are missing is that this is this is their world 2.0. What we talk about. So IKEA serving the many people with big needs and dreams and thin wallets. We simply will not be able to be successful tomorrow unless we have a sustainable business model. We’re going to be too expensive. If energy is based on false sign, if if if the material equations are not in sync with the world that we’re heading, well we’re gonna be more people sharing the same resources. So it is actually also something that makes a lot of business sense. Of course.

JONATHAN MACDONALD [00:06:02] Do you have, obviously we’re both family men? Do you have a fear for the future of humanity from a from a from a personal perspective, so away from the business? Do you have, is there something inside you that has an emotional link to this, this topic of sustainability?

JESPER BRODIN [00:06:20] Yeah, absolutely. I think it is, It is a period where it’s, it can be easier to be driven by fear, because if I go back to 2008, I think it was one, wasn’t it, when Al Gore released the film, The Inconvenient Truth, right. There abouts some and I think it touched me deeply and my colleagues at that time. And we started to take some actions that we didn’t really at those days, which is quite recently, right. Only eleven years ago, realize the full impact of the risks that we together as a community, as a society have been taking. And it’s becoming more and more evident as we watch the evidence of climate change that It’s not only about speeding up to avoid issues, but actually how do we mitigate the issues that we we already have passed the date when we could, some say, avoid it. So, of course, it is a bit of a traumatic situation for everybody. But I must say, at the same time, you know, if if the boat is leaking and you have some people in the boat who deny that as I see it, then we see it. We don’t have time to discuss with those people. Now, some people debate what to do, but we tend to join forces now with people who are basically practical in looking into how can we resolve it. And there is a lot of optimism. I must say also, maybe so the ground feeling is not fear. It’s not even optimism. I would say its responsibility. But then we tend to lean towards the optimism.

JONATHAN MACDONALD [00:07:57] I like that. And so from a technological perspective, how do you how do you view that this extreme pace of change in terms of digital world. And is there any link between your kind of optimism or realism in the sustainable side? Is that linked in any way to how you view the challenges of technology? I mean, we’re living in a world now that, you know, there are X billion connected devices. In ten years time, there’s going to be 10 to 15, 20 billion connected devices, be that from smart furniture to the smart TV to the light bulbs.

JESPER BRODIN [00:08:36] I have three teenagers. I absolutely recognise that.

JONATHAN MACDONALD [00:08:39] Exactly. And I have two teenagers so yeah I’ll have two thirds of those as well. But and do you do you view technology as a threat or as a tool kit? What’s your how do you how do you view tech? Because when I first met you guys, there wasn’t really an opinion that had been formed that was cohesive yet. It was kind of an early days. In fact, I think when I came in, I was supposed to kind of talk about this whole digital world. What has that changed at all? What’s your view now?

JESPER BRODIN [00:09:07] Oh, yeah. I think we’re in a different place now, and to be honest, I think it’s a very humbling learning experience. I do believe that all of us. So I passed the big 5 0 last year and, you know, with leaders in my age, basically this idea that they have two choices, either you have to re-learn and re-learn quickly or you need to step aside and let people with that competence take charge because that tech will influence and it’s already influencing everything we do in new ways. Now, to be honest, a few years back when it comes to the customer meeting point for the competition, of course, we saw the emergence of platform driven companies, as something new, exciting and partly a threat. But then as our direction is right now we have we are on a journey quickly learning how we can use tech in all sorts of efficiency effectiveness, but predominantly going back to the roots of who we are, being as much as we want to sell furniture, we are at the heart, as you know, not a transactional company to start with, but a company who tried to improve lives at home for real and therefore the opportunity to interact with people not only through our lovely flagship stores, but actually to bring our knowledge, our inspiration. I know how on solutions your life at home in a digital way, whenever people want to and wherever they are. That that that was the starting point in a way for me when I joined this assignment. As I travelled actually for a month around the world, met, met people in our markets, customers and they all they were all basically telling us the same practical things that we would like to spend more time with you and possibly listen to more to IKEA and buy more from you. If you were only available when I’m on it. So in a way for us. Fundamentally, this is opening up an IKEA that can be accessible 24/7 and that’s the journey we are on right now yeah.

JONATHAN MACDONALD [00:11:13] And I see that as an admirable aspiration because it’s what the consumers want. And you’re doing this from people, you’re people backwards rather than company forwards. I remember we met for breakfast once in Marlebone in St. Christopher’s place. And you had just come back from this Consumer Electronics Show in Las Vegas, I think. And I know you said and you said that. Can you recount that story? Actually, because it’s better that you say the story because it was awesome when he said it. So do you remember? Do you remember the story you told me about the stands that companies that you’d seen one day and then that they they’d gone the next day. Do you remember that?

JESPER BRODIN [00:11:51] Yeah, that was interesting. That was actually was so on that journey, we took out of IKEA of Sweden the design product and design company in IKEA, we made the journey to meet start-ups, big companies and we also spent a day at the tech fair and nobody was true. We had a couple of the appointments with some of the interesting companies that we had booked some time with. They were simply not there in the morning because some of the big dragons were there acquiring these companies with light speed, I would say. So that was an interesting wake up for us. Now a reference point to fast forwarding to today. We are having the third day in in Copenhagen, today of IKEA’s Digital Festival, and which is actually a manifestation of both what we’re doing and the collaboration in the whole of IKEA now to get this together. And I was acutally yeah the other day I was looking out over the exhibition hall, looking a little bit like the tech fair in Las Vegas, except this time we are the ones who actually had acquired or invested in many of the companies that were there.

JONATHAN MACDONALD [00:13:04] That’s progress. I’ll take that as progress. I love that. And and and in closing and I’m conscious of your time and and I but I would like I have to I have a trivial question and I have an important question. But from the trivial side of things, I have to, I saw a news article about the furniture that can just clip together. This is my trivial question right, I will get to the proper one in a second.

JESPER BRODIN [00:13:29] It’s not trivial at all I can tell you.

JONATHAN MACDONALD [00:13:31] It’s not trivial, it’s great because the thing is, I want to know whether or not it’s going to be easy to put IKEA furniture together. That’s all. That’s the first question. Using that clip together stuff, what’s the what’s the deal with that?

JESPER BRODIN [00:13:42] So basically you can say the the whole self assembly concept is, of course, connected to being able to provide the low price to customers from the beginning and taking off the legs from the first table and man flat pack meant low cost of transportation and bringing products to people. And then, of course, you have to do part of the job yourself. Now, I think today we are more or less, you know, in touch with the having DIY customers in our base, whether, of course, has always been a certain customer group that don’t have the time or feel that they lack the skill to do some of the assembling. I would argue that for the most products, any one of us don’t need them expertise for it. But I’m an IKEA man, so maybe maybe that’s my my point of view. But what we actually came up with this innovation that basically makes it possible to click furniture together without any tools, without any fittings. Now, the benefit is massive on a sustainability point of view, but it’s also massive because I think in the film that you might refer to, I tried to assemble a table in three minutes and I almost made it. Yeah, that was the table that takes about twenty five minutes, maybe two to assemble normally. So that is the ease you can say, but the other benefit is also that these furniture can be disassembled as easy, moved and then assembled again. And this this enables it for people that are moving to actually increase the likelihood that you keep furniture longer, that you don’t have to throw away. So it has a lot of interesting wins and at the moment in the supply chain, the suppliers and the supply chain of IKEA is working on making investments to implement it. It’s gonna take a couple of years before the bulk of IKEA’s products are there. But already today, I know that parts of our wardrobes, tables, chairs are already possible to click together.

JONATHAN MACDONALD [00:15:44] Brilliant. Good. Okay. So in fact, yes, it turns out it wasn’t a trivial question. I’m glad about that. Because now I’ll get to my important question, which is probably gonna end up being trivial. So I need to, I have to end on this one statement that you made that seems to be quite profound and that is that, that your position of being carbon neutral and then carbon positive by 2030. Can you repeat that statement just for the record here? Because it’s a cool statement.

JESPER BRODIN [00:16:12] I was hoping it could say it was trivial but it’s actually very far from that. That is at the heart of what we tried to do. So as we phrased it. We used to we used to express our ambition or vision, if you like, to become people and planet positive. And recently, our strategy took the fundamental step that you say. Now it’s become a goal for us. So by 2030, we aim to across all of IKEA and with the majority of the work being done in our supply chain as well. But it’s actually stretching our responsibility from the forest, if you like, all the way, including products used in the home. So from a climate perspective, our commitment then is that we will we will start to say retract more CO2, Is that English? Than we emit. And then you might ask yourself, is that even possible being a business. Now, if you look at the calculations around how we aim to go there, it’s a quite it’s quite advanced model because you need to do different things, of course, in the whole value chain. And so it includes then, for example, science based targets where independent organisations are helping us to put the goals and verify it. So is also meaning that there is high level of trusting that this is something that is not empty promises, but it’s actually scientifically calculated. It’s it’s includes, for example, one of the first steps that we reached now was that we have invested 2.5 billion euros in renewable energy, predominantly wind, and we reached that target one year early on. And that means we are now having more renewable energy invested than what we consume in our operations in the retail side and the distribution side of of IKEA. We continue by 2025, we’re going to do only electrical vehicles in home deliveries seen in all of IKEA cities. We managed to get the first city Shanghai done actually, this year we have that. Let me see New York, Los Angeles, Amsterdam, Paris is going to deliver 2020, we hope. And then all cities, including London, Oslo, Lisbon a couple of places somebody said that this week are working on our own resolution of that. And, you know, you know, if you ask me am I sure we’re going to get there, maybe you know we might be half a year late in one of those cities, or maybe we’re going to be early, but it’s happening. And finally to say, how does that take us? We don’t have plans to take us all the way, but our plans takes us very far, 80 percent in in the production side of IKEA in the store environment, 70 percent in the product side, 50 percent, if I remember right on co-worker transportation etc. So we still have a gap to fill with them with different ways of sequestration of carbon dioxide. But we are confident that the years we have ahead, we’re going to find the solutions to deliver.

JONATHAN MACDONALD [00:19:15] Brilliant. Well, more power to you, and if I can help in any way than you know where I am and and thank you as well for writing the foreword to Powered By Change. I’ve thanked you many times, but did you know that it became a Sunday Times best seller. You know, it went best-seller.

JESPER BRODIN [00:19:33] I didn’t know until today, actually, because I saw the statements so big congratulations to you and I’m not surprised.

JONATHAN MACDONALD [00:19:41] I think it’s because of your foreword. It’s only because you wrote the foreword. Otherwise no one would buy it.

JESPER BRODIN [00:19:44] No, it’s not, It’s not at all. I think it’s a brilliant handbook, which I think for people like myself a few years ago, who didn’t have the tools when it came to innovation. And who was afraid of admitting it, It gave me I think a very good start in understanding the elements of, of innovation. And we have applied that a couple of times and and it works. So kudos to you.

JONATHAN MACDONALD [00:20:11] Thank you, Jesper. Well, I’m I’m at your your service whenever required, and I promise I won’t try and get you to write the foreword to my next book because it was you’ve done enough. But I if there’s anything I can do, you know where to find me. But thank you for coming on the show and being so patient as well with me getting through the climate protesters to get here, ironically but I really, really appreciate your time.

JESPER BRODIN [00:20:38] It’s requires a teamwork from all of us to make these things happen. So thank you so much.

JONATHAN MACDONALD [00:20:43] Thank you, Jesper and for anyone watching this, please do follow Jesper Brodin on LinkedIn because the content is killer. He’s a video star in the making. So thanks, Jesper and thanks everyone for watching.

JESPER BRODIN [00:20:53] All the best now.

JONATHAN MACDONALD [00:20:54] See you next time on Disruptive Live. Cheers guys, see ya everyone.