IKEA’s Lars-Johan Jarnheimer: “In the world of algorithms and AI, it is crucial to truly stay close to the customer”
The world is changing faster than before, and companies need to adapt quickly.
Jenna Hakkarainen
The world is changing faster than before, and companies need to adapt quickly. At Strategy&’s event, keynote speaker Lars-Johan Jarnheimer emphasized that it is now more crucial than ever for companies to get closer to the customer.
Strategy& organized a networking event, ‘Venturing and Growth,’ at Hotel Kämp in the beginning of June. The event featured Lars-Johan Jarnheimer, Chairman of IKEA Group and former CEO of Tele2, and Eerik Paasikivi, having multiple board roles at Oras Invest, along with Juuso Laatikainen who is the Practice Leader and Partner at Strategy& Finland. The panel discussion was moderated by Jenna Hakkarainen from Strategy&.
“Stay close to the customer and take the newcomers seriously”
During his presentation, Jarnheimer shared his tips and insights on growing businesses and how to stay agile in the changing world, drawing from his own personal experiences.
Jarnheimer has worked closely with some of Sweden’s most successful entrepreneurs: Ingvar Kamprad (IKEA), Stefan Persson (H&M), and Jan Stenbeck (Tele2, Metro, Viasat). Nowadays, Jarnheimer serves as the Chairman of the Board in one of the world’s largest private companies: INGKA Holding, or simply IKEA.
What do Kamprad, Persson, and Stenbeck have in common? According to Jarnheimer, they have all been extremely interested in the interface between the company and the customer.
“In the world of algorithms and AI, it is crucial to truly stay close to the customer,” he emphasized.
Another piece of advice highlighted by Jarnheimer was that it is more important than ever for companies to take newcomer companies seriously, as they often have a much faster customer interaction compared to traditional companies.
“One of the biggest threats to a company’s success is having too many ‘holy cows’. Even traditional companies must be willing to challenge their established methods and ways of doing things”, he said.
As an example, Jarnheimer mentioned the airline Norwegian, whose innovative business model was initially regarded with arrogance by competitors like Scandinavian Airlines.
“Today, Norwegian has more airplanes than SAS. Newcomers should always be treated as potential competitors, or else they will run you over.”
“Don’t change your concept”
Towards the end, the audience participated in a panel discussion and asked, among other things, for the panelists’ perspective on M&A as a tool for value creation. Jarnheimer mentioned TaskRabbit, the for-hire service known for helping people put their furniture together, which IKEA acquired in 2017.
“Back then, we believed that there were many other players eating into our revenue stream. Especially in lower-income countries, customers don’t usually assemble their furniture themselves, unlike in Scandinavia.”
What advice does Jarnheimer have for internationalizing companies?
“Don’t change your concept. When entering new countries, there is often advice on how things are done differently there. However, at IKEA, our failures have occurred in the countries where we attempted significant national adjustments,” Jarnheimer said.
