After eight years on the helm of Ingka Group, the working entity behind home-furnishing large Ikea, CEO Jesper Brodin is stepping down. Brodin explains why now was the best time to make the transfer, and shares how he’s steered Ikea via a whirlwind of adjustments, from rising tariffs to shifting public sentiments round DEI and ESG, in addition to an evolving relationship between world enterprise and governments.
That is an abridged transcript of an interview from Rapid Response, hosted by Robert Safian, former editor-in-chief of Quick Firm. From the group behind the Masters of Scale podcast, Speedy Response options candid conversations with in the present day’s high enterprise leaders navigating real-time challenges. Subscribe to Speedy Response wherever you get your podcasts to make sure you by no means miss an episode.
I’ve to begin with the information that you simply’re stepping down as CEO in November after 30 years on the firm. That will need to have been a tricky choice.
I’m transferring on, really. I’m not stepping down, I’m transferring on. Thirty years within the firm, eight years as CEO, and I feel it’s been a choice that’s been within the making for a yr or so on my aspect. I typically inform myself there isn’t a such factor as excellent timing. Both you’re just a little bit early or you might be too late, however I feel, mainly, the corporate is in an excellent place, we’re performing, and the transformations that I used to be requested to steer—sustainability and digital transformation—we now have come fairly a great distance, and I felt it’s an excellent time for me at hand over.
And your deputy CEO goes to be stepping up, the corporate’s first non-Swedish CEO. Is that vital? Is there something that we should always learn into that?
Nicely, I really haven’t mirrored on it, truthfully. I feel it’s actually nice as a result of it reveals . . . that we now have a succession plan within the firm, that we mainly breed leaders from inside. And this, I feel, is extremely vital that you’ve got individuals who can each keep related to the previous and the legacy and who can lead into the long run. Juvencio [Maeztu] has been my deputy and CFO for seven years, so are you able to think about a extra affected person particular person ready for his flip to steer the corporate? So I want him all one of the best of luck and I do know he’s going to be superb.
Nicely, yeah. Ikea is a world enterprise, so to have some illustration that’s not simply from one place, it’s not a nasty factor.
I feel, to be sincere, it’s attention-grabbing. We began a journey of range in all dimensions again in 2001. At the moment we’d’ve been a sometimes male and Scandinavian Swedish type of firm. The extra north you journey within the group, it could be male and it could be Swedish. And clearly, that was a difficulty on the finish of the day, and our means of assuming understanding of our markets, our prospects on the market. And as a lot as I feel it was a value-based choice, it’s additionally what’s the proper factor to do? That has opened up, in fact, an unlimited quantity of expertise that was already inside the system. Right now, we now have 50-50 in gender steadiness throughout the whole lot, and we now have, an excellent combine of individuals coming from all locations around the globe. So I feel we’ll in all probability see extra of a mixture of that. The Swedish legacy and heritage is vital for us, however in the case of values and connecting to that, I feel folks throughout all of the world can do this.
We’re recording this simply earlier than you come right here to New York for Local weather Week. I do know sustainability is essential to you. The tendencies right here within the U.S. appear to be transferring type of in the other way. I’m curious what kind of Local weather Week you suppose that’s going to result in. Is there something particular that you simply hope to get out of it?
Nicely, I feel in the case of local weather transformation, it’s transferring and it’s dashing up in all components of the world, within the U.S. as nicely. . . . So I feel the climate-smart transformation might be the largest transformation that we’ve seen since industrialization began. Perhaps AI can be proper up there as nicely, or digital transformation, however there isn’t a doubt as we converse in the present day that the climate-smart financial system shouldn’t be solely good from a planetary perspective, but additionally good for enterprise in its essence.
However I imply, that isn’t essentially the message that the present U.S. administration is continuing in its insurance policies on. Proper? So while you come right here to New York, is that one thing you’ll attempt to deal with publicly, privately with different enterprise leaders? How do you handle that?
Nicely, it’s an excellent query. I feel if I begin by shoppers or prospects in Ikea, we do that analysis, or evaluation, or survey throughout all our 34 nations. We ask, in the long run, one thing near 40,000 folks which can be interviewed. We do this biannually, so we now have an excellent, so to say, frequency of that.
The final years, throughout the globe, the subject that has sailed up as the largest concern on the planet is local weather change for peculiar folks on the market. There’s nothing else. Geopolitics, AI, work, the pandemic was there a couple of years in the past, as everyone knows, however nothing is definitely up on the identical degree as local weather change. So in the present day, you ask Ikea’s shoppers, 68% suppose that local weather change is the largest concern. There’s little or no distinction between Texas, Stockholm, Shanghai, and so forth. There are a couple of marginal percentages distinction. The distinction comes while you have a look at age teams, really, the world over. So for those who journey down in age teams, the notice and the fear is far greater.
The attention-grabbing factor, two extra attention-grabbing information factors on that may be a few years in the past most individuals didn’t act on it. They have been fearful, however they didn’t act. However currently, and I can’t absolutely clarify it, however currently 64% say they do take motion. Right here comes an attention-grabbing factor. If you ask folks, “Are you ready to pay additional for one thing that’s planet- and people-smart in that sense?” The reply is not any. So solely 6% of Ikea’s prospects are ready to pay extra.
Now, curiously sufficient, I began to satisfy some prospects who informed me, “It’s not that I don’t care, it’s simply that I can’t afford. Inflation has hit my household’s pockets.” It was a single mom with two jobs in Serbia who made it very clear to me that it have to be your job, Jesper, to current the answer so I should purchase that bunk mattress for my twins and afford it. Really, I feel they’re proper, as a result of for those who skim sustainability on the floor, it may cost a little extra, however for those who do a deep transformation, what climate-smart is all about, being resource-smart can also be about being cost-smart.
In Ikea in the present day, we now have about 36% of our price chain in uncooked materials, and near 40% in carbon. So for those who deal with carbon, you really deal with price. And I do suppose an increasing number of firms in the present day are benefiting massively from reusing carbon economically. And I perceive there are political points and matters round it, however this can be a pure financial reality, and that’s why we see in the present day, once we ask in UNGC, the worldwide community, 88% of all CEOs in firms worldwide are literally extra believers within the enterprise case for sustainability in the present day than 5 years in the past; 99% are equally or extra dedicated to go for the sustainability transformation. So once more, with all of the respect of political angles, it’s a indisputable fact that it’s a sensible factor for enterprise.
