#513 - VO - Jesper Brodin - IKEA - A $40 billion revenue empire built with no bank loans

[Music] My first week in Karachi, my quality manager was Kidnapped. No way. Yeah. You've been working for IKEA forever, right? I am an IKEA man since 30 years. It's been a pursuit. For life to be with a community that is actually the most important reason why I've stayed. So you're saying that in 2020 you are not selling online? In 2020 we were not selling them. The pandemic helped us to modernize the company. We didn't have a shop, like a two-year plan of getting online up and running in every place. We did it in six weeks. [Music] To design an expensive share for 300 euros, versus make a comfortable, safe, durable, beautiful folding share for 19 euros. That requires excellence. And that's what fascinates us. [Music] How many new products do you release every year? 800, 2000 products. IKEA wasn't just there. One day it's been a constant process of reinventing itself and innovating itself. Most people actually think about IKEA as the retailer and the home furnishings inside. We also have a very big investment side. We were one of the biggest food companies in the world. We have invested 4.2 billion euro in renewable energy, solar panels on every IKEA rooftop. We have invested in solar parks and wind farms. So we are today basically way beyond our own energy. [Music] We are the average of people we spend the most time with. My name is Mathieu Stéphane and I invite entrepreneurs, athletes and artists to raise my average in euros. Just before we begin this episode, I'll switch to French for a brief moment to thank my sponsors. I'm going to tell you something. Since we're in the event, there's been an event. And one after another. We've been doing more and more research in English. And today we're going to be talking about this. We're always going through the event. We're partners. If you don't know this event, it's really the leader of IKEA in the world. And the more powerful it will be for companies, it's with their E-Jones platform. 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And he's a lab, it's the certificate of offering a premium experience, even when your team loves it. So if you're a founder, you want to repair the experience that you have in your box, go and create your first agent in a few minutes. Helevenlabs.io/gedeigrèq It's Heleven. Heleveen. Labz.lbs.io/gedeigrèq Helevenlabs. Not only my new sponsor, but it's also your new team member. As we say in English, the one who never sleeps and who speaks all the languages. I hope Brodan, that's right. And I look at you. There's no looking into the camera right now. No, yeah, yeah. You look at it. Hello. I hope Brodan, that's how we say it, right? Yes, per Brodan. What about in Swedish? In Swedish, it's Jesper, so it's a very clean J, Jesper, Brodan. Brodan, okay. I don't know, the Swedish like to sing a little bit. Yeah, it's true. I like it. I like it quite a lot, actually. Actually, I was about to say, you know, but no, obviously you don't know. I started working. My only job for another company was actually for a Swedish company. You might know. It's called Chenevik. Chenevik, yeah, yeah. It's in the wood industry, isn't it? Yeah, yeah. It's interesting. So, I mean, that's an interesting story. My share person, Lars Shiu and John Heimer. He's a bit of a legend. So he worked with the Inva Kampra, the founder of IKEA. He worked with the founder of H&M. And he worked with the legendary owner from Chenevik, who actually died a little bit early in life. Yeah, but yeah. 2002-2001. Yeah, something like that. What's his name again? Oh. Chenevik founder. John. Yeah. And he's, I've met his daughter. He actually died, like, probably a couple of weeks before I joined the company. Because I was working for a modern times group, which is a subsidiary, within the Metro International, you know, the newspaper. And it was the first kind of startup I worked with, because it was a startup. What I actually figured out later on is that it was all linked to the wood industry, because it's very big. Yeah, from the beginning it was that. And then I think he was the tech person and the media person. Yeah. The revolution. John, oh, there we come. Okay. And actually, yeah, I understood that spreading, like, distributing a free newspaper worldwide would consume a lot of wood, which was a good way of selling wood to subsidiaries, actually. And at the end, they would sometimes these things are off the constructions, but you know. Yeah, it's true, it's true. But at the end, they were selling the newspapers to foreign companies in local, I mean, in France, in the US. And they will still have the newspaper distribution contract. So it was interesting. That's good. You have been working. John Stanbeck. John Stanbeck. And his daughter was Christina. Is the other guy? Yeah, that have met a few times. And then the guy worked with us called Peletonberg. Peleton, yeah. Yeah, yeah. I met him a couple of times. Yeah. Very special guy. Yeah. Very strong. Yeah. I loved Peleton. He was my boss for a few weeks, a few months. Okay. Yes, very. So. Sorry. 30 years. 30 years. Yeah. I, well, funny enough, I actually got an email from myself on 1st August. congratulating myself for 30 years with the company. I thought it was quite fun. There was an automatic email. Yeah. And I don't want to be an email. And giving me a lot of praise, how fantastic I've done and how I contributed. And how fantastic was your CEO, right? Exactly. And then offering me three days extra vacation after 30 years. I thought that must be the world record in cost consciousness. Did you take them? Did you take them? Did you take them? I haven't done that yet. No. But it was, it made me smile. That's not why I left the company. That email. But. Yeah. So basically I started in 95. I was 26 years old. I came, I came fresh from my master's degree in university. But I also worked actually during my university the time. I had some experience of building up supply for hotels. And the funny thing is, I see this ad in a newspaper that IKEA is looking for a country manager in Pakistan. So my first job was actually in Tarachi, Pakistan. And I decided not to apply for it. And then I came home to my then girlfriend now wife. And she said, I think you should apply for it. So I did. I went to interview after interview and you know the stakes rise when you start to get excited. For every interview I got excited about the culture, about people, about the job. And in the end finally I got it. So one year into the road my manager came from Singapore to visit me in Tarachi. And I asked him late one night, I said, why me? No, no experience of IKEA, no experience of Asia. And 26 years old. And then he told me I was the only one who applied for the job. So that's actually how I started in IKEA. So we always think we're special. Well, it ended up well, but yeah, at the end. Was the IKEA, Karachi you said, was it opened when you arrived or did you open it? So there were two people who came before me. I think they were there for like one and a half year to set up an office. These are the days when IKEA was expanding into Asia for purchasing opportunities. It was a very gung-ho entrepreneurial period. Two amazing leaders set up the office, recouped the first group of people. For different reasons they didn't stay longer and then I was recouped. And one of the cool things was we had probably some 15, 16 offices all over Asia. And the leader of Asia Pacific, he went for a young, hungry talented leaders like myself. So I think most of the offices were run by leaders below the 30 years old. And then we had experts and a lot of support. But these were days where we basically was like a clone, like from a business perspective. We had a lot of fun. Did you have those trainee programs that work quite famous at the time? Well, I think we did or we did in IKEA afterwards. But this was like real life trainee. We were thrown into positions and given an opportunity to perform. And there was a support system for us. But I think it was like on the job training. I still remember, you know, the first week of my first week in Karachi, I actually had, we had an issue with my quality manager was kidnapped. No way. That was the first week. And I was looking in the IKEA manual, crisis manual. It was things like if you have an IT problem or if you have a, if the coffee machine is broken or something. But it was, I think it was a great school. It was a great opportunity. I think from both business and personal perspective, it was a wonderful time. Very challenging, but also an incredible school of life. So how do you deal with the managers kidnapping when you're 26 years old and it's your first job? I think like always, you have to trust people. You have to trust people in your vicinity and use your common sense. And of course, as always, the check is going to the galaxy. Don't panic. That is rule number one. I think it all went well. It's funny because trusting people is something that is underrated sometimes. But when you trust people and you get, I mean, hold you say, you get fooled, then you look like an idiot, right? And it's hard time to go through. What are the rules about trusting and getting fooled or how do you think? I think you said it. I think the, it's a choice I've made in my life. And I think it's a choice for anyone to either you accept being fooled sometimes. And you continue to invest in trust. But the other option is that you get cynical. You get defensive around relations and people. And I think at the quite early stage, I decided to, when I was fooled or when I was disappointed, I decided to, it's painful. But I decided to, well, I created an expression for myself, which I try to live by every day. And that is, I'm consciously naive. So I know that I am naive and I'm willing to invest. I'm willing to get disappointed that I'm not willing not to trust people. Because that's not simply how I want to lead. I love it. I think I can be really consciously naive and trust. And I'm trying to be that way. The problem, after words is that you have to be somehow hardcore if you get fooled, right? Which is the hard part, because probably when you're consciously naive, you probably have a good heart. Maybe, somehow. But being hardcore with someone who fools you is the tough part. Well, you know, I think when you end up in a situation, and it's perfectly, I think also, to a certain degree, I think when you need to take a decision to part with somebody or you need to act on maybe then a disappointment. When I was younger, I was, to be honest, I was quite afraid of conflicts and I would avoid, I would go at quite length to avoid dealing with such a situation, try to improve it and so on. And then over the years I learned, now, but I have to find my way of approaching the hard decisions and to say goodbye to somebody or to basically part with any way act on a disappointment. And then I think for me, what I try to do is one, be professional, and then the rest is only to be caring, because when you make up your mind and you act on a decision, watch out so you don't act in passion or in revenge, or in disappointment or any of those, because it will only hit back at yourself. So I think sometimes in life it takes you to the end of the road and then you stay professional in the decision, and then you can only care for people after that. Cold blooded, objective, somehow. Yes, spare, I have a thousand of questions and we don't have so much time, just a couple of hours. But before all of those questions may I ask you to introduce yourself. Very good. So yes, Pippity, I come from the beautiful city of Gothenburg, West Coast, Sweden. I am, as you said, I am a key man since 30 years, it's been a pursuit. For life to be with the community that is actually the most important reason why I've stayed with the companies, the people, and the purpose. So it's a purpose for the organization, led by the foundation, which has given me the opportunity to explore myself. And do what I think follow the advice of my mother when I was young. She used to say if you follow a path where you look for what you're good at, and what you love to do. And if you find both, you might find happiness. So I guess I can give me an opportunity to pursue those two objectives of many years. Marriage, three kids, they are now 19, 21, 23, so it's yet another exciting opportunity in life to learn again from your past and from your own kin. They're all in Sweden. They are in, currently they are in Brazil, Singapore and Sweden. What is IKEA today? Can you tell me more about the company, the numbers, the people? So IKEA today, it's, IKEA was actually the current construct of IKEA was founded around the 80s when the company has started to really take off. And I think our founder had a deep moment of wanting to realize his vision. He decided that the vision of IKEA, the values and the importance of IKEA's role in the world to, of course, to furnish homes for people with thin bullets, which is always at the heart of what we do. But also to try to contribute to the investment, to create a better life for ordinary people. That has always been the vision ever since. Back then, IKEA was set up as a foundation, you can say in its simplest form. So the founder gave away the company to the foundation and the foundation can only use the means, the accumulation of dividends for charitable purposes, for philanthropic. So it's a quite interesting construct, some companies have similar, but that's who we are. It's kind of like Rolex. Yeah, and you have a lot of Danish companies illegal and others are illegal too, I think so. And that construct gives you a certain long term perspective and better also the opportunity, I think, to contribute in a better way. We are 170,000 people today in the company I lead. We are running a business of a little bit north of 40 billion euro. It is a business with an integrated value chain. So in IKEA, you will basically from raw material to production to IKEA stores. To also more and more today, the areas of sustainability, circularity and so on is part of the universe of IKEA. And if you ask me, it's a quite modern culture to the point that it's believing strongly in people working together. It believes in simplicity, it believes in low levels of hierarchy, it believes in attracting people with both willpower and humbleness. So humbleness is an important value to us. And basically a company that sometimes I think in the capacity as a CEO, I've learned that it's not about managing a company. It's more like trying to influence a greater organization or even a universe in itself with a lot of stakeholders. Of course, suppliers and contributors to the business overall. We are 170,000 people in the group, I am responsible for. But it's a million people totally in IKEA every day who are since living from IKEA. So in the totality, it's a quite big, big, big and sometimes complex universe. What's the million, the 830,000 difference? It's people like suppliers. Mostly I would say production suppliers, but also more and more these days service suppliers in different ways. It can be people producing, I guess, products, people working with kitchen, installation, delivery. And then of course in different constructs, people upstream and downstream who are basically part of the ecosystem. So you just left your job as a CEO? Yes, what happened? It's a good question. Well, I accepted the job as a few years ago and we discussed the five year journey because it was like the seven or eight worst years of the year. Before, I think everybody greased to that. So when I look back at you though, well, hopefully. But I look back. I actually recently went back to look at the what we discussed then would be my job description if you like and the expectations for me. And along came, of course, I would say already when I signed up for this job, we underestimated the digital disruption of our industries that to start with. Of course, we have no clue about the pandemic. We have seen war, we have seen geopolitical fragmentation, hyperinflation, all-time loss, consumer confidence still in France and the other places. So it's been a ride and it's been a very exciting and incredibly challenging time and luckily I didn't know when I signed up. But I agreed to do five years and after five years, we agreed the border myself that on mutual terms that we would do two more years. The board asked me after seven years about another two and I said one and we said one and a half and we agreed. So I think there is no big logic more to say that I don't believe in perfect timing. I think either you're too early or too late. And for me, it was just a deep sense of that after eight years, it's time for somebody else to step in, take over. I could have done it for a few more years, but I also felt it's actually now exciting if somebody else comes in with a new perspective and fresh. Plus being 57 years old, I thought maybe there is something else out there waiting for me. So let's see. Is it exhausting being a CEO of such a brand company? Well, I never thought of it as exhausting. I think life can be exhausting, but I don't think it has to do so much with your role or capacity. It has to do with your mental perspective. I used to work for a CEO in IKEA and he was very clear on the democratic principle of that, all of us have 24 hours. And how we choose to spend it and how we choose to recharge and so on. I don't think it's naturally connected with the size of the role. Obviously, there's been moments. There's been some really really challenging moments where you can, and I felt the gravity of the role. Like the first weeks of the pandemic, the invasion of Ukraine and so on. When you stand before something drastic that happens to the organization and you don't have the answers, then I definitely can remember the weight. But I think you could feel weight in different capacities and roads. So it's more important how do you psychologically recharge yourself and stay sane? Did you have stores in Russia? We did. So you had to close Russia? Yeah, we had. It was, I think, yeah, it was by far the most difficult decision I ever had to take. We were having about 4% of IKEA sales, so we had big stores, big shopping centers in Russia. And there were two factors that drove the decision. You can say obviously a lot of the political landscape shifted overnight almost, but also the supply chain of IKEA broke down. So it was basically not possible for us to operate in any case. So we had to, we said we didn't close Russia. We said we pause. And the reason for that is we spent 25 years in building up IKEA Russia with the strong belief from our founder that Russians. With ordinary Russians need something like IKEA to furnish their homes and afford a better life at home. So we celebrate that the 25 years that we could contribute to people and we said for now we need to pause. And one fine day we don't know when we hope to be back in Russia. But what does that mean post of the stock closed? Yes. So there it's I think us being a bit optimistic. Because we have sold, we have basically not only closed this though, but we have sold the assets there. Okay. Yeah, because at some point when you're a CEO, you kind of, I mean, even though you have to politically close or shut down. However, you kind of fail the people you were. Absolutely. Well, it was also a 25 year mission that we were on. And many of those years weren't ECS and sadly enough we were we were doing really fantastically as an organization of business. We tried to in IKEA be long term in all perspective. We also had a very long term perspective. We had about 10,000 people. So we gave them I think very good conditions. Meaning we they remained employees for IKEA for more than a year and some of them even more. I would try to support them in the best possible way in their continuation in life. And I hope to one day I want to be CEO, but I hope to see an announcement that IKEA is starting up and welcoming some of those people back. You said the it's the low level of hierarchy in IKEA. Yeah. What's the number of people in between the CEO, you and a salesperson, like in a small store? One, two, three, four, five, seven, maybe. Seven, seven layers, yeah. We tried to, of course, you need to an organization, you need to with the pure numbers. You can't have too many people reporting to you, but I think we tried to keep it flat. Even more so, you can say it's the culture of staying flat, of staying connected with people and listening to people and so on. Where I found her, he was phenomenal in that. And I sympathize with that leadership too. I get easily bored in board meetings or counties and committees. And if you follow your decisions out on the floor, you will actually not only get better answers, but you will be much faster in responding to it. Seven people means, for example, each and every country manager is not reporting directly to you, is it? No, it's not directly, there is one layer in between, you can say, yeah. Which is what's the, so it's the CEO and then. So basically it's a group. So basically the group in itself has most people actually think about IKEA as the retailer and the home furnishing side. So the construct of the company is that we have accumulated assets over the years. This is a long story, but it's beautiful because the founder decided early on never to take a bank loan. No way. So the only policy we have according to him, financial policies, we need to earn them money before we spend it. So it's one of the most solid constructs in the world and we sit on a quite noted balance sheet. And this made it possible for us both to create resilience financially, but also to make the investments we made in sustainability and wind and solar and forestry and so on. No bank loans. No bank loans. No, never. Even during the pandemic. During the pandemic, we were benefiting from the strength of our financial resilience, I would say. So when you open a country, when you open a store, it's on your own assets, you buy the land and you create the store. There are a few exceptions where we rent or lease property. Like when we started to experiment with city stores, for instance, like La Madeline in Paris, we decided to rent because we didn't know if this concept was for us. But today, if you look at plastic, but then we closed you close, and we decided to open plus Italy, which is then a bit a lot to construct. It's too far and Lenny's right. I'll make a note to myself. Yeah, I've never going to go. I'd rather go to every or whatever. I do agree with that. But never that less, I think, would we do another location in the north of Paris? We would still probably try to buy the property because we don't want to be in the uncertainty of rent or lease us. Actually, there is like a very small Ikea right here. There is a small touchpoint. Yeah, you don't know that. Yes. Le Mans doesn't know. It's in Lincatorze like at Poucardini. There's quite a bit of lease here. I think you can just buy kitchen. So what it is actually, when we developed the stories like this, we actually entered. We entered a very interesting phase, which we call Omnichannel back in 2017. And the true story is that as the new CEO, I felt, I felt obliged to travel to meet people around the world. So I did the world around the world trip. Can you just tell me more about the world trip? Yeah. How many places I was. I think we started in Sweden, Russia, Poland, Spain, France, UK, US, Canada, Japan, China. In five weeks. Okay, so you need to come back home. So I came back the other way. All right. Okay. But it was an exciting moment. The thing was, I met co-workers and I met customers everywhere. And wherever I came, people at that time back in 2017 said, we like akea, we love IKEA. We will buy from you a IKEA. But if you don't show up in my telephone or my laptop, if you don't show up as a modern retailer, I will select other companies. And at that time, we have started to see a decline in visitation and in sales. And since I heard this over and over again, I heard it in Poland. I heard it in France. I heard it in Japan. I came back. And this is the true story. I came back and I had a travel report to my management group and board. And I said, this is the insights I have. And one of my colleagues said, it's not a travel report. It's a strategy. I said, no, no, no, it's a travel report. I said, no, no, it's a new strategy. So the IKEA omniscientist strategy came from listening to people. And at that time, we, I think, for a couple of years, the fear of change or the fear of the cost of things drove us to not listen hard enough to our customers and coworkers. Okay, so that travel wasn't, it wasn't planned for a new strategy. It was just a plan to listen and understand, right? Can you just tell me more about how, who did you travel with? What question did you have? Who did you meet with? Was it just the storm manager? Was it the salespeople? Was it the clients? No, no. No, we said, we said no conference room, no power points. We stay, we go to homes and visit people in their homes. Like IKEA clients? Absolutely. So we visited, I don't remember. But in, let's say we visited some 25 homes, at least, over these weeks, maybe more. We met coworkers where we went, so I had the opportunity to sit hours with, listening to people dreamt about what they were fearful about, what they love with IKEA, what they wanted from IKEA in the future. And obviously had the pleasure to meet our management teams as well. But we did that on the ground, on the IKEA floor, in the warehouses or in the homes with people. And in that context, again, came, which I think is like, sometimes we confuse strategy. That strategy is something where people with higher IQ than us come up with a brilliant idea. That might happen once in a while. But I think actually strategy is about deep listening to what's currently important. And particularly the things that are difficult to speak to or the fears and so on. And if you turn that into a problem statement, that can make you good. So that's what happened. We started the journey of IKEA's omni-channel transformation, which led us to new formats in cities, where we needed to get closer to people. But definitely a digital revolution in IKEA, where we caught up with years of not being, so to say, on the modern end of connecting with consumers, adding services from deliveries. And here's the interesting thing. When the pandemic hit, we only had one market, UK, who was actually up and running with online. So we were technically these first weeks of the pandemic. We were technically knocked out, IKEA, we were closed. We were deep red and actually very fearful that we would have to lay off thousands and thousands of people and close, maybe even markets. But we managed to, in six weeks, we managed to get all markets up and running on online and home deliveries and that saved the companies. We actually, in the context of the pandemic, we even, as many companies did, we received furlough to keep the company afloat and save the jobs. After a few months, we realized that we didn't need it. We were running on our own capacity, so we handed back every year, every cent, every dollar of the furlough. So you're saying that in 2020, for example, in France, you were not selling online. In 2020, we were not selling online. Wow. That was late. So, and the interesting thing was the pandemic helped us to modernize the company. We didn't have a chance. So I think we had like a two-year plan of getting online up and running in every place. How did you make it happen in six weeks? I don't know. Well, it was an incredible effort. Obviously, to be serious about your question, we luckily had for two years in advance started to work with the digital landscape. We wouldn't be able to pull it off without some of the groundwork done. As a CEO, do you like put pressure like hardcore, like saying, guys, you've got six weeks or is it just happening in six weeks? Well, the interesting thing is, so we divided during this crisis, we divided the company into parts. We said, one, we run as a crisis management team. So my deputy, now the CEO of IKEA, he was running the crisis side of things, and I was running the business operations and transformation. And then what we did was obviously. You took the three parts, I don't know if anything was fun those days, but it was a very effective way to lead. What happened was like three months into the pandemic. I met a journalist who had studied us and claimed that we were doing better than other companies. And I had absolutely no research reference point. But he then asked me a question and said, how come you have made so good decisions compared to other CEOs? And then I realized something important for me because obviously I was part of making decisions, but the culture of IKEA is to be empowered, meaning that in a time of crisis, other organizations might get more of a paralysis. And wait for the top to decide because the risks are failure is higher. In IKEA, the country managers and people in different places, with I think a minimum of instructions, everybody went for what they felt was the right thing to do. We did one or two mistakes maybe, but in the overall, what happened was that we enabled IKEA, we said go for it. Let's stay afloat. The goal is to stay afloat. We don't have to make any profit, but we should stay afloat. And the goal is to keep every employee. So let's find a way to enact them. And after two or three weeks of, I think, trauma, it was actually quite exciting to see how everything started to work and take in. If I remember correctly, we were eternal, but was down by 4% only. Note that we had 55,000 store days closure across all of IKEA these two years. And the profit was meager, but we made a slight profit in the end of the day. So I think that's one of the greatest experiences I've ever had actually. That's a big paradox. I believe that this 2020 was a much more exciting year than 2025. So every year has had excitement. But I think the pandemic and the years following were quite a challenge, and now it's a challenge, but it's different. This was a different nature of challenge. Of course, it was incredibly tough with the isolation and worries about the future and so forth. In our world, the paradox was that we were actually able to save the company through our multi or omnichannel capability. These were days when when it was peak demand on home furnishing, because everybody was at home. And at the same time, supply chains in the world were totally disrupted. So it was the difference between demand and supply was very frustrating. But in the end of the day, we made it. So you're the kind of companies that during the pandemic, when skyrocket to the sky, and then right after when everything reopened, did you crash a bit? No, I would say it was much more moderate. You can say demand skyrocketed. But we couldn't feel it anyway. So actually the first year of the pandemic, we were even in retractionally because of the closures of us doors and whatnot. But if you look at the latest year, it's been quite moderate. So we the years after were slightly lower in demand of products. At the same time, we could start to open us towards the ending and get back to business. So that, of course, if you look at the numbers, then sort of balanced our turn of it. So we've been growing, we've been growing. Except for one year in turn of it, where we decided to make massive, as we call it, investment in lowering prices. Because what happened during the pandemic was the hyperinflation hit every company. We held back at IKEA as long as we could. In the end of the day, we had to do increases of our prices, which we don't like in IKEA. So about one and a half year ago, we decided one of the biggest decisions, we're going to invest 2 billion euro in a 40 billion euro company to lower prices. So if you look at the turn of it, we took a slight hit on the top line. But if you look at the quantities, the number of people, which is at the end of the day what IKEA tried to do, we actually succeeded. You're staying around 45 billion income rates, 44 or 45, that's the recent years. But as you say, you're not rising prices too much. Now, the business model is actually the opposite. We lower prices. And it's not by squeezing money out of the equation. It's normally an engineered effort. So it sings back to the 60s in IKEA where smart solutions, flatter flat packs, better logistics, smarter material innovations, and so on. All of that lead to that we're capable to lower the prices over time. Of course, economy of scale as well, where it can kick in. So that is the idea. And the idea is then to serve the many people within wallets out there to a better life at home. And at the same time, building sustainability, because that's one of the incredibly important things for us. This is not done by being wasteful or cutting corners on the contrary. Can you tell me more about this genius part of IKEA? I mean, all of these tricks you've created in the past 50, 80 years, that's the furniture in the box, right? That's the design, that's the, how can you create all of these? And maybe how can you keep creating stuff like that? With, I mean, lowering the down prices with employees that are happy, clients that are happy providers, maybe, I don't know how it works. How can you sustain an ecosystem like this? Well, I think it's probably the most important question for the future leadership of IKEA. How do you sustain and breed a culture of entrepreneurship and innovation? I think it's alive in, in the company, but you need to constantly water the plant. So what we do is today we obviously we work structurally with innovation and we also work with investments into new technologies. I would say particular today as the only channel side is more or less in place, we are investing in AI driven technology on one side, but we also investing a lot in material development in parts of IKEA where we today IKEA's climate footprint and cost footprint, about 40% sits in raw material. So the whole aspect of how do we innovate materials is actually going to be economically and from planetary responsibility, the most important topic going forward. Now, we do that structurally, but we also want to do it unstructured, meaning that we believe that every employee in every part of the system has the right to do mistakes. To try test and try, we have entrepreneurship awards and there is nothing we celebrate as much as when we do mistakes because we think it's important to lower the threshold of for people to actually act on their ideas. So this has been one of the most important things for my message to coworkers, even going so far that a few years ago I launched something called banana card, which is actually a license to go bananas that I'll hand out to anyone who's interested. And the thing with the banana card is that I have already coast, I've already signed for your mistake, so if you feel a little bit worried about the consequences, if you fail, and you have a banana card, you just put your name next to it and we will both. Take responsibility for the mistake, so this and otherwise we try to do to stimulate that entrepreneurship into the future and it works. I think in large companies like IKEA, I mean, that's my point of view as an entrepreneur, so I have only the largest company I've managed is like 100 people, so it's rather small, but it's a lot of politics. And I felt in the Swedish company I worked for, it was less than anywhere else. I know if it's Swedish thing or I can kind of feel, but maybe people in France really listen to me now. I think you know, this is bullshit, I don't know, you're going to tell me, but how can you avoid or should you avoid politics? My experience was in that company, you could talk really, this banana card, that's why I'm thinking about it, Pelotonberg, I could have it straight away with him, I could talk to him. But in France, at some point the CEO was like, what the fuck is much you're doing? You were like, you know, can you tell me more about politics? I think, I do think it's an important aspect, and it might be cultural, as you said, but I do believe more than organizations need to stay flat and open to be fast. There's nothing as slow as hierarchy, or if people can't access their CEO in an honest conversation, there will be an isolation at the end of the day. And what I've seen definitely is that organizations that are built around hierarchy, they at least are slow. There might be other issues with it as well, cost and whatnot, but what I feel with IKEA is that we are fast from the point of connecting. And I think we touched it before also, we work consciously with breeding that culture, for instance, through what we call anti-bureaucracy weeks. So this is when everybody who works in an office needs to work at the store floor or in a warehouse a week per year. Yeah, and we love it. And we think, actually, I enjoy it mostly. What I enjoy most of it is I normally go to do the dishes in an IKEA store, and the thing that I found the best with that is that in my job, I don't always see the result of my work the same day. When you do the dishes, you see your results straight away. And I can tell you a funny story because this is when I was new as CEO, I was in a store in Sweden doing the dishes. And the restaurant manager, he didn't really know who I was, but after Waley came to me and said, "Are you a manager?" And I said, "Yes, I am a manager." And then he said, "Are you reporting to the counter-manager in Sweden?" And I said, "Now it's actually the opposite way around." And then he looked at me and he burst out in laughter. And then he tapped my shoulder and said, "Keep on dreaming." So that's the type of culture. Of course, we became good friends after. But if you do that, connect. And if you take down the hierarchical barriers, you will get a lot of ideas. But most of what you will get a lot of truths, this doesn't work. We invested in this digital tool. It doesn't really work for us. It actually takes more time. Now this and that product is coming back from customers. They are not happy and and done. So I think breeding a culture of openness, transparency and access, where the level, not only organizational layers, but where the barriers for communication is low, that makes you faster. Yes, is it a full week? I mean, you still have to do your job over the top? On the side? Well, what I typically do, I don't do five days in a row. I actually split it out a little bit because then I can connect it with my travels as well. But the point is not to be on e-mail or be just one hour in dishes and then do something else. But definitely to be out there, what we do typically around me is that we create communication around it. So we have what we call flat-packed TV, which is our internal communication channel. So it becomes like a very good media to have a conversation with more people about what I see. And the story you just told me, it means that the people around are not told that the CEO is coming in, right? You are just a new guy on the dishes. Well, in this case, I think probably today they know. But, and you know, different cultures and different parts of the world has slightly more built-in respect for titles and hurricanes on. But we try to, and I try to be conscious about when I do that, I show up in an accessible way. Normally, a bit of sense of humor helps a little bit. And just being together with people and showing that there is no danger or nothing bad about being yourself or being genuine with your views, what happens is that when you reach that, when you overcome that barrier, you will get much more interesting answers and result out of your conversation. But I don't pretend to be somebody else, no. So it's, yeah. I think it's very interesting. What I mean is that so I've received, I normally only historically receive founders, sportsmen, politicians, creative people, like people who have, so it's a generation, do it yourself. So it's people who have created their own thing. And since early 2025, I've received the hosted podcast with the CEOs in France, mainly not only, but so Sebastian Basin from Accord Hotels or Crystal and Man from Orange. And I'm not sure they go like a full week in the hotels or in their shops or in their, I don't know, wherever it can be. And I think it gives you a lot of intel, probably. It does. Because that's human nature. When you're presented with the fact through layers or levels and up to a board level and so on, you can be sure that the reality has been tainted or been modulated. So, and that means sometimes if you don't watch out bad news can travel quite slowly. Good news can also travel slow, but, but definitely bad news could travel even slower. So I think the, the aspect of being close to the floor, close to the voices of customers of your colleagues here is important. I heard a story about your company by the way, when there was an acquisition in Shinriq. And I heard the, there was somebody who spoke to John and said, should we go ahead, the due diligence done and so on. And his answer was back, can you shake the toilets, the customer toilets? And they said, no, do that and call me back. They shake things that they look fun. They said, we buy the company. I think that's like, wow, you know, 100%. If the toilets are not in a good shape, don't buy the company. Yeah, I'm obsessed with the, not just the toilets, but the office, you know, when you get into an office and you see it's a big mess, you're like, yeah, it has to be somewhere in the mess inside too, right? And it might not reach in the due diligence if you're in a boardroom, so to say. Interesting. What about innovation? Actually, you're talking about innovation. If I, if I'm being honest, being like into innovation for 20 years. I could say IKEA was a very innovative company back in like 60s, 70s, 80s, maybe up to, and then for 20 years, it was working on it. It's assets probably. And then back, maybe when you came in, but at least with the pandemic became again innovative or not that much. It was just going into digital, which most of the company have done. Earlier on, what is going to be the next innovation? Are we talking about, you know, 3D printing? Are we talking about some expecting drone delivery, probably not because it's too heavy, but I just came back from Shenzhen, actually, we have been around in China for two weeks. The day I landed in China, actually, I've seen an IKEA store and I was everywhere, they're fucking everywhere, but what's going to be very innovative with IKEA? So I think there are several areas where we are innovating now. I think you're right to certain extent, the digital part of IKEA to start with, at least, was catching up with the world. And today, I think we are more in the leading position of innovation. Today, there are several areas of innovation into the product and design, but the biggest last 10 years, the biggest steps we have taken in innovation is in sustainability. So today, I don't know if you know, but IKEA, since the Paris Agreement was signed, IKEA has grown by about 24-25%. And we have taken out absolute carbon by 30%, which is super interesting. So it's plus 20% on growth and minus 30%. And then people say, is it relative? No, it's absolute, including the growth. And it's not only what is referred to scope one, but it's all three scopes, which basically means all the carbon from raw material, production, transport, retail, and products used in life at home. And here's the exciting things where I think IKEA is a total trailblazer. A lot of companies are getting it, but still, I would say, society such think that has been taught to think that sustainability should come at an extra cost. Obviously, if you follow that line of thought, ordinary people couldn't afford it, if it costs more, and thereby you could never change anything. So we turned it around. We said, how do we actually use sustainability to drive out cost and make things less expensive? And so today, we have invested 4.2 billion euro in renewable energy. We are far into electric vehicles in Paris. I think we are 100% in most cities we are. We are reducing and innovating materials. We are basically into deep innovation of raw materials. We are setting up circularity. We have our own, we are rolling out our new peer-to-peer secondhand platform. And so we basically play across all levels of the IKEA value chain to become sustainable. And if you look at it today, it's minus 30% absolute carbon. And every time we take out carbon, we take out cost. So it's made the company actually much, much more successful. That's really amazing. And we have true innovation. Today, we are actually here in Paris to celebrate the Paris Agreement. And we are basically communicating under something we call do something change everything. It's like the only one celebrating the Paris Agreement. Well, not the only ones. There are a lot of people out there who are doing it, but I would say this is the right thing to celebrate. Because the corporate sector has been, you know, you can say climate smartness is a new phenomenon. Most companies didn't have goals of plants until five, six, seven years ago, maybe. And the corporate sector is a reliable source in society. We don't go, sorry to say, from a political point of view left to right. We go steady and we invest and we harvest. So the corporate sector of France, of Europe, of the world is basically building a smarter economy, as we speak. And I think IKEA is not the only one. There are a lot of companies out there doing the same. And most of the multinationals. We are a little bit louder in sharing the stories because we think it's important to inspire, but also to bring hope to consumers. Yeah, plus you're more visible. So you have to be louder because I probably would believe that from an external point of view, you see IKEA as a big polluter. I mean, it could be fair. You know what I'm saying? It's like a lot of words, a lot of like there is a bit of a billy bookshelf sold every six seconds. Is that right? I have no clue. Well, that's what I get as an info. And where is that produce? How does it come to my home? So there are very, these are very important questions because there are a lot of myths around sustainability. One is that it needs to cost extra, which is wrong. Again, if it costs extra, we will never be able to scale it forward in our people. Another thing is that there's a confusion around consumption as such. IKEA takes it responsibility. That's why we are one of the first ones to sign up to the Paris Agreement, so to say. But the thing is most of the things, if you look at the climate footprint of IKEA, for instance, most of these things are not spontaneous, tea lights or anything like that. It's typically people who save money for a couple of months to buy a bankpad or a new dining set or something. So these are investments for people that they make. That's where the bulk of our responsibilities is. Our market share, which is around 10% on the global level. It's hiring France. But if you say globally, a market share on second hand is actually higher than on the first hand market. So nobody throws an IKEA product. You sell it to the next customers as long as it can rotate. And the IKEA website. Well, we have started now. We are live in three markets. In every market, there is like an eBay or something similar. But we actually saw that we can add qualities by having customers access to pictures. We give price recommendations. You get assembly instructions and so on. So we think we can do a good job with that. But the most important thing I would say to people who listen is that by consuming less or by taking away unnecessary consumption, we of course contribute to the investment when it comes to climate. But there is no way we will be even close to Paris by doing so. So if you think that Paris agreement means that all of us needs to consume minus 50% carbon by 2030 and minus 90% by 2050. You don't consume 50% less or 90% less. It will never work. So what we need to do as a company is to reengineer consumption as such. And that's why, for instance, we opened recently in France a reversed mattress factory inside of France where we basically the model is we take back mattresses. We split the material in three categories and we send it back in the supply chain. If you do that based with renewable energy and your production and the electric vehicle and so on, you get to an equation where it's not carbon free. It's very close to. So if you're prolonged the lifeline of the mattress, you also do a good job. But you won't be able to be Paris compliant by doing a little bit less. You actually have to revamp the whole engineering process around consumption. That's what we do. Then you create new mattress with that. And again, you can say, when you then ask the question, so now you give a couple of examples, but how does that add up? Well, it adds up in plus 24% growth, a minus 30% in ready and audited and filed. So it's not a vision. It's actually reported results. Where did you buy your mattress at the end? Okay, so not at IKEA. No, I have a very big question about mattress because that's a market where there is a lot of sorry. No, I'm looking for the term. You make a good profit on a mattress normally. The mattress, the people who sell mattress only mattress, they make very good profit out of it, I believe. What about IKEA? Is it like one of the places you should buy mattress because it's the best mattress ever? You can say, well, no one, you tempt me to get commercial here, but you can say a mattress is not a big mystery. So it contains wherever wherever you buy it and so on, it's basically similar or same technology, similar or same materials. And thereby when you look at the average life length of a mattress, it's around 10 years, regardless if you pay six times more for it or less. So I think there are quite few poor quality mattresses out there. There are some simpler constructs and so on, but therefore I think it's one of those things just like a kitchen and so on. Sometimes it's a bit mystified what it is, but a good quality board in a construct of a cabinet you shouldn't have to pay more if you ask me. So I think the idea of that, you mean you sleep on IKEA mattress? Yes, of course. And I think it's again technically it's not a mystery. I think the interesting thing is again, if you look at IKEA's mattresses, it's built in ready for recycled materials and smarter solutions. If you look at IKEA's kitchens, like we see over there, the beautiful thing is that the board production in IKEA's cabinets is lighter board than most, but not the way you need the strength. There we pack it with fiber. So we know exactly where the whole system needs to carry the weight. So again, good engineering competence is one of the drivers both to quality, to low price and to sustainability. In the sustainability area, I would say there are a lot of misleading misconceptions, at least when you try to drive down 30% of carbon, what are the big things, the major thing you have to look at. Sometimes you know, you will get people saying, yeah, I'm the CEO, I won't take a plane anymore, but that's bullshit. Most of the time it's bullshit. Where you were in IKEA was. I think you said it. The rule number one is you need to have a fact-based approach on your carbon footprint. So I think a few years ago, quite many years ago, we would also act on what we believed was the right thing to do. And then as we started to get technical around setting goals, SPTI goals as they're called and knowing categories of where our carbon footprint seems. It means like if you go for symbolic action on something that is 1% of your footprint, you won't change anything anyhow. So the first rule is get your footprint. It looks slightly different in different industries. I would say today, most industrial leaders know their footprint quite well. In IKEA's case, if we have our air flights, it won't have any impact whatsoever now. Was it the Fritz from the Fritz? People would think it's production of Fritz. Today, it's about 40% raw material. It's about 8% production. It's about something similar in transport, 6 to 8% in transport. Retailing today is down to 3% or something. The consumers use of our products. So downstream message goal, we also need to count how do customers actually impact the climate. In our case, it would be light bulbs or kitchen appliances or these things. Throughout their life length, we have to account for that. So since we shifted to LED and improved LED constantly, we improved the energy of appliances and so on. We actually more than half customers impact on how to use it. And then across all of these, almost all of these categories, the introduction of renewable energy is just incredible, what it has done. And the interesting thing is, renewable energy obviously comes at a lower cost, much lower cost. Last year, we saved 7 million euro by only having renewable energy. And people ask me, are you going back to oil and gas? No, of course not. And then it gives us energy independence. 97 million euro out of what profit, what kind of profit was it? Well, the company is running on 40 billion, so that puts it in. It say incomes, you don't give the profit. So the profit varies from year to year, but you can say it's a significant saving for us. So it's actually been one of the biggest savings we've had on a singular route course. We have invested in renewable energy since 12, 13 years back. So in the beginning, it was a bit slower, in the beginning, the economics wasn't really there as much, but today it's just phenomenal. So what is it? It's like solar panels on the top of every storm? It's solar panels and wind predominantly. We do have solar panels on every IKEA rooftop, except a few old buildings that construction-wise can't carry the load of it. But beyond that, we have invested in solar parks and wind farms across all. So we are today basically way beyond our own energy demand. So we are actually an energy company today having a revenue from selling renewable energy. You're still investing? We are still investing. We have 4.2 billion euro invested. I think to cover our own needs would be at 2.8 or something. So way beyond, we have a frame of 7.5 billion euro until 2030 to invest. So we continue to invest in our renewable energy. So you're going to become a large energy company. We are mid-size utility company already. It's quite interesting. It wasn't really the plan for the beginning, but it's good. It's very good. What do you think about nuclear, actually, as a Swedish? We clearly have a very sensitive area. There are bad memories and it's connected to a lot of fears. I think from accidents and incidents and all the aspects of threats around nuclear. We have decided not to. It's like one of the areas where we said we don't even have to have an opinion on that because we are all committed to solar and wind. And the day that opportunity would be exhausted, we might take up that question. But I will refrain from stepping into the nuclear conversation. One last thing about sustainability. When you said 40% comes from the raw material. So from wood, basically? Well, wood is less than you might think. So we have an array of materials. I can't remember now exactly what the wood part is. I'm guessing maybe 25-30% of the equation. But you have metals, you have plastics, you have different types of fibers, natural fibers and whatnot, ceramics and whatnot. And then of course the percentages, it depends on do you mean purchase value or do you mean climate wise? The interesting thing with raw materials is that in order to mitigate the equation of raw materials, you need to make sure you reduce your waste in all parts of it. Enable recycling. Today I think we are at about 19% of all our products are made from recycled materials. Which is an incredible business opportunity, it will always be good. Because you have two sources to choose from instead of only one. And then you can say it's about smart materials. It's about new types of material compositions. So it's also about innovation of raw materials that will help that equation to happen. Yes, I was saying that Billy Bookshelf was sold every six seconds. Can you give me the journey of a Billy Bookshelf? Where does the wood come from? Where is it produced? How does it comes here upstairs in my office? Very good. So the interesting thing with the Billy Bookcase I think is it is a good example of the optimal IKEA as well. Today the factories that produce Billy Bookcases are incredibly optimized. They are very lean production units. What we call dark factories? Well, not entirely, but you could say that there is not. If we go back to 25 or 30 years, there will be more people, more handheld. And a lot of this is optimized today. Two things, it's normally more local than you think. People would think that there is one factory making Billy and we sell it all over the world. That's not the case. Typically things that are bulky, the more bulky it is, the lower value per cube. You would bring production a little bit closer to the market. But we do have. We produce flatline furniture in France, we produce it in Germany, we produce it in Poland, in Sweden. We produce it in the US, we produce it in China and so forth. You produce Billy Shelf's inference. I don't remember now exactly if Billy, but if you take Pax Wardrobes, Billy's and the same style of furniture, there is definitely production in France of that. The interesting thing is, as I spoke before, are the companies might buy shipboard or different types of boards. They would then sew it and then they would treat it and finish it. So we even make the boards ready for that typical product, which means that we put density of fiber where it needs strength and lower, where it doesn't. We construct very often the materials, so they have hollow cavities. So there is actually taking out material totally. So some of our constructions would have actually air inside of it, which also actually improves the stability if you do it right and so forth. So the whole idea of it and then it's flat back. And it's more and more of our technology means also it's easier to assemble it. And then very important, it's not only easier and better to assemble, actually more and more possible to disassemble assembly many times. A few years ago, our fittings would break after a few assemblies. They were not made for a circular economy. And I think around 2015, we started to face ourselves and say that, where do we stand on this issue? And we reconstructed a lot of that. Both the industrial capacities and the engineering around it. So today, it's actually built for a circular economy much more. Which can look kind of business society somehow, you know what I'm saying? It's like the more people consume, I mean, maybe you don't want them to use it against it. That's a very interesting question. For us, this was before my time, but the management at that time wasn't a big topic. So it was more in a long-term perspective, say, would our business model be based on consuming poor quality? That breaks and you have to buy again. Probably customers will not be super happy over time. So we said, no, our design formula in IKEA, it's called the democratic design. It's a incredibly cool design formula, a very difficult to achieve, by the way. So it has quality, functionality, sustainability, form, of course, as for capacities together with the low price. So in every design moment or engineering moment, you need to actually fulfill all four of them, plus low price. At the end of the day, it's a very big business. But if you let me put it this way, it's still pretty simple. You don't have, like, probably, if you take orange or Accor, you will have, like, Accor, you'll have, like, maybe 10 or 15 kind of hotels from very cheap to very high-hand. If you take orange, you'll have several markets. But with, like, innovation, you will have to put cables in the sea. On your side, you decided to probably give the same product everywhere in the world. Have you ever thought about, you know, trying as your fellows from the Nordics H&M with costs, tried to go into a, like, eye-hands or other kind of B2B or, I don't know. Well, there was once, many years ago, I think, the Campland family, the founding family, acquired a company called Habitat. I think it used to be in France as well. I don't know. Maybe it's even around steel, I can't remember. No, I think it closed it last year, somehow. So it's quite, quite a long time ago. But that was an attempt to look for a customer segmentation model. But in the end of the day, I think the conclusion was that there are less benefits from that. So within the context of IKEA, that's where we expand our focus. I've never thought about the model as simple. You know, I think it's. Well, I think, you know, to a certain extent, there are some simplicity with IKEA's concept. But today, operating in particular supply chains in a global perspective, it's a lot of headache. No, but what I'm saying simple is for such a big company. Like 170K, you said employees. If you compare to, you know, maybe Google or Ben Pepperiba or, you know, some kind of those. Oh, they are super-sepper converters. Yeah, but there are so many different jobs and specialties and very niche stuff which you have, obviously. But I don't know, to my perspective, maybe less, but I'm probably wrong. Well, I think every industry has its challenge. What IKEA has tried to do over the years is to integrate the value chain. And that means there would be retailers who basically don't own the products or sell somebody else's products and whatnot. We own the range in IKEA. It's a designed IKEA range. To a very large extent, there is also upstream investments in two. I think about 12-14% of the production is owned by the company. Yeah, of course you are. Because it's hard to drive the volumes. Of course you're an energy company, right? And then you come and see if you look at it. I know the founder would hate to admit if he was around. But we're not the simplest business model from that point of view. It takes a lot of effort to integrate all the qualities. The cool thing I think is that since we do own the products and since we own our assets, it gives us resilience in times of crisis. But it also gives us an opportunity like in sustainability. We can dictate and be much faster on setting criteria for sustainability. We don't have to negotiate with somebody else. We don't have, which is another myth, a big size is a very good front to sustainability. Because if you have volumes, you can scale sustainability much faster. So in that term and respect, I think that's where it's slightly easier for us than other retailers, possibly, where they have to depend on a lot of other brands and whatnot. Is it fair to say that most of the time with a part of your clients, you lose them at some point because they're older. They have more money and they can probably spend what I like above all in my furniture is to buy all stuff that is valuable. It's probably suit this too. I probably have this amazing table at home that is a Palestinian wood. It's for being forced to sell since the 70s. It looks amazing. It will probably worse twice the price I bought it 10 years ago when I was on it. And I love those things. It will live longer than you and I. Yeah, yeah, like this thing you have here or everywhere. Is there an issue about that? I mean, wouldn't be interesting to try to keep those clients that are just going away? Well, you have to think at least you have to work strategically with the centric model. So you can add layers but don't add boxes if you see my point. So in the heart of IKEA we've said families with children is our main customers. And that means also we're okay to say no to certain customer groups. But then we typically meet customers when they are students. That's the first relation. And that's an opportunity for us to create a bond because you typically have a very thin wallet and you have some important needs. So that's where we typically start to connect. Then your first apartment, possibly, when you get your first kid, live changes in all dimensions, including home furnishing. And we are experts on the safety and on the functionality, what you need in those years. So there we actually have gone all in. Then to a certain extent, if you go to the upper end of IKEA, we have a range called IKEA Stockholm. And Stockholm was made for people that are slightly more affluent. And interesting enough, we just launched, I think, the fifth or sixth collection ever. These are the cheapest products at IKEA. They are actually the most expensive in our range. But if you compare it to the market, you will get a sofa for maybe 1200 euro at IKEA. That's our upper end. But you will probably pay 6,000 for the same quality if you go to another competitor. So there is an opportunity for us to flirt with people in that customer group. Still, from a volume and from a purpose point of view, we could live without those customers, if I say like that. I think we tried to start the first stage here, actually. They are fantastic designs and a little bit less engineered if I say like that to the low price. But for us, if I say like this to design an expensive share for 300 euro, versus make a comfortable, safe, durable, beautiful folding share for 19 euros, that requires excellence in engineering, in design, and that's what fascinates us. And then you should also do that with recycled materials and deliver to the Paris Agreement. Then you're good. How many new products do you release every year? So typically, it would be about 1,800, 2,000 products. Wow. And then you could say new products. And they're falling to two categories. So you can say about, we have a little bit less than 10,000 products in the range. We don't have exactly the same range all over the world. People think so, but typically functionality, so like stiffness of mattresses, or if it's inches or centimeters or so, there are some variations. But otherwise, it's similar offer. We do change products. Sometimes we do color updates of textiles and so on. So it's less of a use in that case. And then the others are truly new products. And what is the. Can you tell me more about the design and then maybe engineering culture at IKEA? What are the secrets? What are the. I can't tell you the secrets. So basically, we have a magic place, which is still the small town where IKEA was founded in Elmholt. I think it's about 8,000 people in the village. We have about 2,000 people plus in a workplace where the democratic design is basically the center of creating IKEA's products. You would find there are people working with kitchen, so with textiles, or with bedroom, furniture, whatnot. And there would be the competences there are designers, product developers, engineers, commercial people, communication talents. And they have the most super exciting job in the world. Basically working with nurturing the existing range and then developing the new products. It's quite fun. I had the pleasure to be the leader of that organization for five years. That was fun. How do you define. How do you make sure something's going to work? So basically, the criteria of democratic design is a super tough limit, you can say, for anything. Which means that IKEA today, before we release a product from a quality point of view, it's being tested. Normally, to higher standards than any legislation by ourselves, sustainability needs to add to our commitment to the Paris Agreement. And functionalities being then tested by accounts in sometimes by customers saying that this so far, the cavern needs to be washable. You need to be able to have kids who jump in it, etc., etc. And then from a style point of view, we then typically try to be IKEA. We have a traditional side of our design and a more modern side. But it's always something where we define as this is typical IKEA, from a look point of view. So all of these things are difficult enough to deliver to to be honest, but then to do it at a lower price. That's when you really have to be good. And that requires, of course, that you work with close to factories. We normally say that the best place to do design is on the factory floor. Start by design the price tag, and that work with brilliant people in mind to crack the code. Being IKEA style can narrow somehow the output. Did you sometimes try to go out of the box? Well, I think sometimes, and there have been one or two accidents on the way. But we also said, we said, no, but there is a big world out there. You know, there are a lot of competitors who do traditional style, traditional French, traditional Chinese, et cetera, much better than us. Our point of view on form from a design point of view is also associated with a couple of values, the simplicity, simplicity of construction, the honesty of the design, the smartness of how do you actually use materials and so forth. Anyway, it's not only visual commitment, but it's also a commitment to how we actually think smart design is all about how it should be engineered. And therefore, we consciously say no to a lot of other styles that we don't believe is for us. Have you ever had a big fail under your comment on design? Big fail. Oh, I don't know if I could tell you, but no, I think, yeah, of course we've had. I think typically when we fail on the price level, our customers are people within wallets. And that's again what we like to visit them. When you go to a single mother in a big city in Europe and with two kids. And when she explains her economy to you, then you understand you have to go home and do a better job. And you start to get snobbish about adding things that becomes more expensive. Normally, our customers says, thank you, but no, thank you. Otherwise, we've done a lot of fun. I mean, some people still tell me that the ovens I created back in 2005, we still have some in the warehouses. I had this idea that we would calculate ovens and microwave ovens with glass fronts. Green ovens and green microwaves and whatnot. And I'm probably the only one who still have one of those. So sometimes we go wrong, of course. So you have a lot of electronics now that you product yourself. Well, well, we basically, we have them on the appliance side on in particular kitchens where we are big. We do collaborate with big producers like Electrolux, Whirlpool, Beco, many more in the world. And what we typically do together with them is that instead of providing the industry on diversification of models, we try to cluster and build engineering benefits of producing bigger volumes. We also integrate them, which we are super proud of, lowest energy classes into lower prices, which is quite unusual. Have you ever tried to work with meal? I can't remember if we have. But I think we have no -- Too expensive. Well, we have no. I think they are targeting another customer group. But we have worked with brands that target a higher customer segment because they want to have volumes in the base. We do sell our products under IKEA as a brand. And then we inform people who is the producers, I would say. So then some producers say, "Now what we do only are only brands on." There have been a lot of IKEA hacks, as we say, online. And also, IKEA companies -- oh, no, sorry. Companies working around IKEA, like I'm thinking about a company called Plum Living in France. You've heard about them Plum Kitchen? No, actually not. So what they were doing, they've been growing. Actually, I hosted Julia. It was amazing. The CEO. And actually, sorry. I'm thinking about it. Recently, it was probably three years ago. So what they do is they do faces for kitchen. So you buy the kitchen at IKEA and they do the rest. It seemed at Amondin Merlier. And Julia was the last name. It seemed to me that you didn't quite like IKEA. All of those hacks on like and all of those people around. Is it wrong perception I have or? I think to be very honest, I still remember. I think there was a Malaysian lady who started even a site called IKEA hack or something like that. And I do believe back then there were some legal experts in IKEA who targeted and said, "This is not allowed from a brand perspective." Luckily, we stopped that. I said, "Yes, it's very loud, please." I think again, we love when people take our products and do something even better or more fun with it. If we would react, it would be if somebody hacks into something that would be not safe in life at home or something like that. But otherwise, I think we love it. There are indeed, when it comes to kitchen and some other wardrobes and so on, there are some companies that has grown up by customizing our products. And we even thought about doing that ourselves. And then we thought, "No, maybe it's good that somebody else is doing it." See what they do, that's plum living, for example. So they have that bathroom. So these are IKEA cabinets that they are providing offers. This is actually quite interesting because if we would, if I say like this, if we have 25 expressions of kitchen in IKEA, if we would go to 50 expressions, we would need to carry so much warehouse stock in all the sizes and all over. So there's sort of a place where we say, "No, but we stop here. This is good enough to personalize." And when other companies come in and do add-ons on top of that, it will be more expensive, obviously, because it's based on small quantities or not. But we think it's fun. I think it's also a way for probably older people, you know, like me, probably, to get some. You know those. Yeah, but stay in touch with IKEA, actually, at some point. Yeah. Because you try not to have the same thing as everybody, so you're happy to pay your next job. But next time you look for a kitchen, come to me, because I think we have a variety that will please you. Listen, I think it's a sign of a strong brand that you can collaborate with others, that you can partner, you can stretch a little bit. And I think curiosity is the only way of learning into the future. So by being curious to what others can add to IKEA, we will learn and we will make the brand better. What about 3GP printing? I've talked about earlier on. Is there something you're working on here, or it's. Well, we do use 3D printing since 15 years back in our modeling and in our product development work. So to say it's a tool of creating, obviously, 3D dimensional experiences of something that you're designing on. So that's helpful. 3D printing as a means of production, we haven't yet seen any benefits of. Let's see if we are wrong in the future, but today the speed and smartness of mass production, including sustainability, beats 3D printing. So even in the best case, it will be too slow and too costly. I was thinking that would be a good way to make people come into your stores, because if I put it this way, can we say that the store traffic is going down? It's going down dramatically. I mean, as the web is going up and the total income is more or less the same. It's a very interesting question. I think I got the question when I started back in 2017. What is the share of online versus offline versus the question? We didn't know. I didn't know. Today, the share of online is 28%. Last year, we grew in visitation also to the stores. Single-digit growth, but still, we welcome more visitors. So that means people spend less time at the stores? Well, no. We have more visitation to the store than before. So they don't. The interesting thing is, again, the last years, we had a pandemic. We had zero visitation, which was, in a way, very helpful, because now we know what 100% online looks like. But the thing that has happened with Omni-channel is that we have 86% of RKS customers use more than one channel. So there are very few customers who go only online or only store. Typically, people go to the store, maybe for inspiration. They come home, they order. They might buy some in the store, come home, complement. And all of the above, all of the versions. They use our planning studio close to here to plan the kitchen. And then they might, at a certain time, go out to Parinor, to have a look at the physical environment and so on. And they might then go back and order at home. Omni-channel is about providing people the opportunity to do it the way that fits them. There is today a trend in the world that is, you have to be good to attract people physically. And if I say in particular, if I go to Asia, where that trend has since the pandemic has not come back to the numbers before. But in most places, we actually see a slight trend of an uplift of a visitation. But you have to be very good. You have to be more active than ever. You have to make sure that your stores are in good shape. Your services are good. The food offering is attractive and at the low price for people. And all of this above means that being a physical retailer, you have to work harder today than 10 years ago. That's for sure. Harder today. How do you make sure your stores are up to date? How do you make sure that the bathrooms are clean? Well, we do. Well, one simple answer to that is that we do have methodologies of, we have a concept which is described. And we do make sure that we fulfill that concept. Interesting enough to be honest, one in my year, I think it was in my year two, in my 10 year SEO. We picked up on it. We were only 40% up to the highest level of stores as we wanted to be. Only 40% of the highest stores were back then. And we took the decision to go for 100% of our stores to be at the green level, if you like. We looked at what type of investment does it take to lift some of the old stores or the cycle of renovation and whatnot. But everything told us that it was worth it, the worth of investment to be up to date and up to par. So today I think we are at 97% of our stores fulfill our own concept. And the last 3% are probably only pending or being audited or something. So that sort of set the bar for what good looks like in game. How do you do that? You close them, you renew them, you renew them. You're basically, you start by agreeing that this is the standard. And then every store do the self-assessment, where do they need to improve. And then we have an auditing team who comes to visit, to give you. So you don't give yourself the green light. Well, I think they happen to come from Netherlands, but these are like very senior people and as much as an audit can sound harsh. It's good to have people before I speak to them to say here we are right on it. That's your opinion, yes. There are some discussions. Do we get the return? But I think we did that consciously. The beauty of that is what I learned in leadership is that unless you achieve the basic, until then you can't really take off in your innovation. So if you try to innovate and when your basic level is so-so, it actually becomes an issue. But when you set the, okay, let's go for 100% concept green. And from there on we innovate. So today I think our stores are not only meeting the basic range, but we're much more innovative and much more experimentally today and into our stores. So what you say is that if you want to be innovative, you have to be your stores at 100%. Yeah, I think so. Speaking of, would you give me like a store basics? Like what is, if you open IKEA store now in a country? Like in a random country, a random like average IKEA stores, what are the numbers? Like how much does it cost? How many people would you employ? How much do you expect to make as an income? Can you give me all of the metrics? That's going to take you a couple of hours. But you can say, first of all, we have a portfolio of different types of stores today. We used to have maybe more of one concept, which would be the flagship store that you know. We have five of them around Paris, for instance. They might range from 25 to 40,000 square meters, what they're about. The components of the store are the same. So the component of a market or the component of a showroom with the room settings, the component of a restaurant, of a bistro, of a self-serve where you pick up your goods, a full serve where we serve you with. So all these things, you can say, the parking lot and so on, these conceptual items belong to a standard store. Since we recently then developed city stores, we then have a simplified version of that, meaning smarter space utilization and also sacrificing some of the things that you get in the big stores. All of these things are packaged in a way. So if you would open, let's say we open the next store we're going to open in IKEA will be on the 4th of December in Auckland, New Zealand. So it's our first in New Zealand. So that store has been built to the concept. But then we have a beautiful rule is that every store must be different. So every store has to, again, the entrepreneurial spillage says that you need to try something unique and something new and sometimes we do that and it didn't work. And then we celebrate that. We at least try to do, I remember recently being in Korea and in the restaurant we do, what is it called? Bionic, is it bionic? I can't remember the name, where we grow salad, basically for our own needs. An enormous beautiful wall where we grow salad and it's a bit too expensive, so we probably won't copy that. But now we know. So every store tried to resolve something new. So what would be for this generic store, the price of an opening? Oh, it's very different. You can say, I can't give you a straight number. But if I say like this, we sometimes. You can't because it's confidential or you can't because it's confidential. It's also confidential, but it's also because it varies so much. You can say, the most expensive investments we made typically would be where we buy property in city centers. So in Paris, we bought a block of plus detail, which is then an IKEA opportunity. But IKEA, I think it's only 10% of the space. It's offices and it's a shopping center. So we have a shopping center group, which then goes in and we buy that property as a real estate investment. And then we put in IKEA and add their meshes into the business model of it. Other versions is we are right now, which is very exciting. We are testing a new concept in IKEA. We have focused the last years on the metropolitan areas. That's where most people live today, 50% of the world population, 80% maybe in the future. So we have consciously weighted with countryside, if you like. Now we're going for the countryside. And in the countryside, there would be a smaller version of IKEA and a simpler version of IKEA. And it is very exciting because we have now opened the first five as test pilot stores. And there we run it super low cost, super efficient, because otherwise we won't be able to expand on it. So it looks like there was two employees. Now it couldn't work with two employees, but you could say that there won't be four levels in that store. There will be two levels. There will be managerial level and coworkers only. There will also be like one floor, not several floors. There will be slightly reduced offerings of the restaurant and whatnot. But this is the way for us to go to maybe let's say in IKEA in France, we are more or less in every big city in France today. I think Nisse was the last part which we worked so many years to get a footprint. Now we have big, beautiful store in Nisse. Now we're looking for the cities of 150,000 people or the airbouts, which today don't have access to IKEA. Some of them might live closer to a big city, but many of them don't. So this is our next adventure. But if you take Nisse, I know you understand you cannot tell me the price, the whole investment. But is it more like 20, 30 million, 100 million? No, I won't go into the numbers. Come on, yes. No, I'm trying to understand. It's very interesting for me to understand. Nisse was. So it's closer to 100. And how many years, is it profitable year one? Well, I don't think many of us are profitable year one. There are certain conditions that make it profitable. But what we typically try to do is to look at the 5, 8 or 10 year perspective. Sometimes we might go for an investment that is a bit more long-term. What we do want is that every of us is taken, the decision is taken with an ambition of profitability. So you know, in some retail concept, you might think that you lose money and certain parts to gain it in the totality. But we don't believe in that. So we believe all of us should be profitable, free standing. So what's the return on investment should be 5, 8, 10 years that will use it? Something like that. It can be up to 20% profit for now. Now you're guessing, and I'm not going to go into that. But I've reported numbers. If you look at the last 10 years of reported numbers, we are a single digit end of the bottom line type of company. The interesting thing with our P&L though, which I think is one of the assets in uniqueness with us. So if we do 4, 5, 6, maybe even 7% bottom line at the year, we also navigate that profit with our investments. As I told you initially, since we don't take loans, that means we have to accumulate. So basically, we match our investment appetite based on how we're performing. So thereby, we wouldn't do massive profit because then we'd rather invest that money into expansion or improving something. So that's the type of economics we try to operate. Not getting loans. Is it a good or bad thing? It's interesting at the end, but sometimes to grow. I'm not even talking about raising money. We're just talking about loans. It's not a bad thing. Well, I think it's a choice. And it is a quite unique choice. You're absolutely right. If you want to expand fast, I think the model of taking loans or having a much more widespread franchise model, for instance. If you let other people make the investment, it's a way to reach many more customers faster. But it was the conscious decision of the founder to say, no, it's more important to be resilient in the long term than to be fast. So that's the pathway we choose. Have you ever thought about trying to sell other things like, I don't know, closes or? Yes. We've sold pianos. We sold TVs. We sold, we have had a lot of us. TVs fair. I mean, you could sell TV sounds. Well, when we launched the TVs, we were the last one on the market. Everybody already had a flat screen on the wall. So that didn't fly at all. Didn't work. No, the idea was beautiful. So we targeted, we said, we wanted to target female customers. We're going to make TVs that are more aesthetic than a statement. And that technically doesn't require a PhD in understanding your remote control. So the idea was beautiful, and the execution was okay, but the timing was awful. So it flopped. So we let it go out. Must have been like 2016 or something. When people didn't buy TVs. No, nobody bought TV then. So we were basically, would we have done this eight years before? But I also think another area where we have been stepping into, we're stepping into sound. So we work with some incredible families. With the likes and so on and so on. The intelligence of light and sound and steering your household from a technical platform point of view. That took, I think at least five years of quite having investment with less returns. And today it's fantastic. It's working well. The quality of these products are incredible. They require, and we're still learning how to simplify for customers to understand the benefits of it. And because we are not, of course, seen as a tech company. So our customers, from a patient's point of view, we have to find better ways of selling these. It's incredible functions, but the quality of the products and how you can steer light, temperature, sound in your home. For a decent investment is quite amazing. It's like a sonos kind of thing, right? So you can put, like, I should think about this here. I wanted to put sound in this room. Yeah. I'll try it. Have a look at IKEA. I will like it. Yeah. I'll ask for a discount. That's what I do at the end of this podcast. So we normally say that the discount is already built in. I know, I know. So, okay. Yeah, we've met some TV producers in China, like TCL. Maybe you were working with them, yeah? Was it TCL? Yes, correct. They produce so many great products. So you just stopped TVs. So it wasn't, basically it wasn't for us. There were others who were doing it better than us. And sometimes you have to try and you have to say, okay, it was probably the mistake of the year. When did you stop? I can't remember. 2018, '19 maybe. Okay. And are you watch? I think the last TV was under my watch. Do you have a. I can find one if you like, if you're interested. No, I think it's. I love those objects. You know, like I have. You know, from the. I have an idea. It's a bit serious. It's also a requires update of software and a lot of competitors that are simply not for us. All right. Where's your. I'm trying to get some more intel or information about the stores and the economic model. But one last thing about the people, like the employees, we've seen a lot of businesses like if you take food like restaurants and so on. It's very tough at the moment to manage people, to hire, to keep them. Is it the case at IKEA and how do you manage to do it? Do you pay them well? I mean, how does it work? We basically. We sell a bit of. We are quite good at retention. So, you know, of course there are things that we can improve. I'm sure in every place, but we are quite famous for being a good employer. So people, what they like with IKEA, we pay. We aim to pay on the median. So we don't. You could go to places and get a higher salary in wool. Positions included myself. So we aim for median in wool. And that's part, of course, of the whole economics of who we are as IKEA. But what we try to offer is big responsibility. Great teamwork, opportunity to learn and to expand as a leader and as an individual. And in general, a place where you feel accepted and welcomed and included. We try to reflect society as it looks wherever we are. So that means we are today at 50/50 gender balanced company in all levels. We reflect society from age. We include people from more parts of, from handicapped to refugee programs to everything. And we try to look upon, honestly, people as an asset. And I think that you can't fake. You can't pretend to do that. You have to actually build that through your culture. We do every year. We check every employee basically is invited to give feedback on IKEA and feedback on their leader. And we're very peculiar to follow that and act on any deviation or any aspect. And if you ask me, it's one of the brightest part of my tenure as CEO in spite of war, in spite of pandemic, in spite of economic turbulence. We are at all time high when it comes to our co-workers satisfaction today. And without that, I don't think IKEA would succeed in the future. In the end of the day, it's our people and their motivation that is the number one asset. It's not the stores or the products or the concept. I was recording the last week with a woman who has this company called Kushten Schimmick. Amazing Kashmir. You have to bring your wife or yourself before you leave Paris. I'll give you the address. It's amazing. Yeah, yeah, it's amazing. You love it. I'm sure 100% best present for Christmas. And she was telling me that once you've invested in places, in locations, in stores, what she was obsessed by was what is called the Andes. What she meant was that you have to make sure your people, your sales people were selling more than one product. So she wasn't obsessed by the average basket. You said about Benignoye, the average sell, but the Andes. Meaning that she was trying to get someone as close as possible as two, the sale index. What are your obsession on the people? Are they sales people? What do you expect from them? We are basically a culture of values. So we think we like to believe that we work best when we represent values. These values originated from Sweden, from small and from the found and those regions. But they exist in all parts of the world. So we prioritize collaboration and togetherness above strong individuals. We like, as we spoke, we like to stimulate people who are entrepreneurs. People who take their own initiatives and test and try things. These are important things for us. People that love and represent simplicity. People who avoid bureaucracy or dislike hierarchies into the system. People who have need for that way of leading is typically not staying long in IKEA. But still you have numbers to sell, right? Absolutely. Well, the incentive of selling, I think, we are not building it as a programmatic for that. So we basically, to a certain extent, you know, IKEA is also a mechanical sales process. So what we do is that we make sure that every customer who joins us, whether they join us online or in the store, is supported. And sometimes that means that you're guided to self-help in some of the planning and finding your way and understanding how to interact with the IKEA. But most important of us is to say, when you leave IKEA, you should feel that you've done a good deal. You should feel happy that you have done a good deal. You spent more than you expected. If there was a problem, there is no fuss. If you forgot your receipt or something happened and so on, there is no argument. And you're right. Hopefully you have had a very low price hotdog. So you're a little bit, forgive us for the long time you spent, by having a good something to eat as well. Yeah, it's true. Do you make money out of restoration, out of restoration? Of the restaurants. We make money. We're not allowed to not make money. That's the retail loss of Europe, so you're not allowed to sell below cost. But I think we don't have a very high ambition on margins. And that goes across the whole IKEA system. We don't make money per piece. We make money by volume. So we try to keep our margins low. And whenever we can, we actually do reduce our prices to drive more volumes, to scale things, to make things better. And then in the end of the day, there is money enough to invest from the volume, but not by having double digit margins. That's not us. So like if you take an average restaurant of an average IKEA, it would make more than maybe a couple of million euros a year of income. Probably. Wow. So it's fun because a few years ago when I was responsible for the range and supply of IKEA including food, we didn't know that we were one of the biggest food companies in the world. Because for us it's a complimentary service, which was I think fun, exciting as an opportunity. But also told us we actually have a responsibility. That's the journey we started when we started investing to plant-based food and other solutions, which we are quite advanced at this moment. Yeah, are you looking for all of the organic areas? Well, we looked at ourselves in the mirror back in 2013 or something. And we realized being a meatball and hot dog company in a modern society, both from a health and sustainability perspective. We said this is part of our legacy, but also an issue if we don't have alternatives. So we started to collaborate with the world's sorts with the industry, but also with vegan society and NGOs to coach us. And we developed, the strategy was we will develop plant-based options for everything we sell of the main offer. Easier said than done, I have to say, took a couple of years to do that right. Today we are at approximately 30% of our food is plant-based of the sales, which is actually higher than we thought. You should also know, our client to eat and the people who visit IKEA is a majority women. And I would say in the age of 30 to 50 or thereabouts. And they are more open to changing habits than other parts of society. So it took too far more to make a plant ball that tastes as good as a meatball. But we did it. And the other policy we said, we sell it for the same price. We don't charge more for the plant-based offer. You were saying that you were talking about knees where you were opened earlier on. It's still on the car-based model, right? So it seemed this car-based model slowed down a bit. Car. Car, like the car. That's the way it was conceived at the origin. But this model is not over. Well, I think it's not over. But it's definitely so that if you look at the metropolitan areas of the world, not everywhere, but in most places, fewer people have cars. And fewer people have the time to spend awesome for an excursion. So that is one of the reasons why we developed the city's doors. To bring IKEA closer to people, like Blast Italy, in Paris, like the planning stations and so on. They are complement to the big stores in many ways. But of course, as they're there, we think was in the future they will be. But obviously, it's one of the changes in society that you have to be very curious to see where it goes. In the end of the day, which is, it might sound like the smartest strategy, but it's a little bit odd by accident. In a certain extent, where we have had some areas where people come slightly less to the stores, in general, we see more people. But in some places, we have lost some hesitation. What we've done is to convert our stores to fulfillment centers for online deliveries. And the cool thing is that we didn't have to build as many warehouses, because every IKEA store carries more or less the full range. So we could only convert the warehouses where we already have them outside city. The next big thing now that you're an energy company is that, same as the food, you can be a place where you will charge your car at IKEA. Because it takes long to charge your car, you will go into the IKEA store. So every IKEA store today have a charging. And then I know for a fact that the people working with it, it's quite fun. They said it shouldn't charge too fast. And I think in the end of the day, you have to be convenient for people. But to come to IKEA and to charge your car, obviously, the sooner the majority of parking places are enabled for EV charging, the better, because that means that there is a demand and there are more people driving electrical. But it's true, it's a request that we have it in all stores and we do expand and add. We're testing right now in several stores even to put like solar panels above the parking space. We actually have solar connected to the charging in the systematic perspective, which is interesting. It's, by the way, one of the proposals in France that parking lots larger than X needs to have solar power on it, which is an interesting idea. The other thing that was genius actually in France, I think, the delivery fee is pretty high. It's like 150 euros. I'm not sure you can confirm because you probably don't know just for France. Maybe it's not for everything, but as far as you want to get a kitchen or a cupboard or something like that. I can't remember in France now what it is. You would have a little bit diversified whether it's bulky furniture, if it's a parcel home delivery. We took the decision to charge the cost of it. We don't earn money on it, meaning that obviously there is no such thing as free home delivery. We drive to your home for free, so what people do, some other retailers, they build it into the product price. So of course you will pay for it regardless of how you get to pay for it. We thought it was more honest to give, this is the product price, this is the service. And then you make your choice. If you want to come to IKEA yourself, you will always have the lowest price. If you want the service, we have all the services available and we do it at cost. But I thought it was genius that with this flat fee, I think in France, that once you spend the 150, you're just like, well, let's buy the whole store. So I just feel free to use it. So I thought it was pushing the spend at some point. It was quite interesting. So we talked a bit about innovation. How do you push innovation around, I mean, not talking about design or probably engineering, but at scale. Do you have an innovative studio or something like this? I think we've always had an entrepreneurial spirit and culture and ways of working. So today we have a couple of different innovation centers, whether it's retail, digital, product, materials and so on. But I was part of setting up the first real innovation organization in IKEA Sweden in almost a few years ago. And it was basically, it was starting with that we needed to go deeper into problem solving than we could do with ordinary talent. So we basically created a material and technology and industry innovation lab, where I think at the start it was like some 200 people. We would work on non-stitching solutions for textiles. We would work on hollow constructions for wood. We would work on new type of metal mixes and and and. All of that has helped us immensely to improve both the quality of our products and the price and sustainability as we spoke to. And speaking of wood and sustainability, do you own your own lands, your woods, do you grow your trees? To a certain extent, I think it's we have a long term ambition where we do invest in in forestry. Part of this sits in the opportunity with our balance sheet where we say we are today having majority of our residual cash invested into government bonds. So there you have the enormous resilience. But several years ago we decided together with the founder to invest part of it into forestry with a long term perspective to say maybe in a future there is a necessity for IKEA to secure its own demands. Today you can say most markets in the forestry and in the wood sector are still very healthy so there is enough competition or there is enough supply on the market. But we do today have a certain investment into forestry and we're going to continue to invest in that. Have you ever heard about the Snickers brand, Veja, V-E-J-A? No, I don't think so. It's a French brand originally. I'm sorry. No, it's growing. You've probably seen it. Maybe at some point I'll introduce you or someone at IKEA to the founder. We've been in June into the Amazonian forest to understand how do they get the IKEA supply the CO2 rubber. So it was taken straight from the forest. But the interesting part is that they would not cut the forest to plant a V-E-J-A to get the rubber. They would get the rubber from original EVA trees within the Amazonian forest. I believe that the problem with intensive wood picking at some points that you just get like the wood you want and put like thousands and thousands of trees and then you get a problem because there is no diversification in the forest. There is no more birds or animals and everything. Are these things you take care of? How do you manage that? I think there are two topics that we said. One of the topics is that we feel responsibility for climate, labor conditions, but consumption is such which we spoke about how you actually generate and build smart consumption in the future is one of the topics. And the other is even if we consume less percentage wood than people, I think being IKEA, wood is our topic and forestry is a topic where we take responsibility. If you look at the total topic of, of course, part of forestry is agriculture, just like wheat or corn or whatever, part of forestry is actually an agriculture process and has been for hundreds and hundreds of years. In those there are two types. It's a more monoculture that you refer to or there can also be where you have forestry with selective processes where you then have to work more selective cutting and so on to preserve the importance of the nature values of the forest. The third area is clear cuttings of tropical forest and destruction of land which we are obviously not part of. Today the forestation is a huge problem for humankind. It's typically concentrated to almost 99% of it is in the global south and it's connected with complex societal questions, poverty, lack of legislation and so forth and it's a huge issue. That, of course, is nothing where we're IKEA's. We are in contrary on places where we apply 100% what is called FSC forest urgip council which is the highest level of not only environment but also social aspects of how do you run forestry. So this is an area that is very dear to our heart. All right. So you've been in that company for 30 years. You've been running it for seven years now you're out. Even eight. Sorry, sorry. I would have to think about two things. I want you to talk about three things. The international parts, like as a CEO, you said that the cultures or the profound values are the same in a lot of countries. But what are the differences and can you give me some tips about it? I was saying just for fun Dutch are opening the ass but they're not. But every single culture or country has its own way of working. Can you give me some learnings? Well, I think it's one of the beauties of humanities in it that we have different ways of expressing ourselves in different ways of being and so forth. I find a lot of that to be more on the surface. If you go deeper in relationship with people, I think we have more in common. I think one of the defining moments was for me back in 2008 when I moved to China. We used to have culture training. There was a very popular training and I was asked will we continue those cultural trainings between Chinese and Swedish cultures. And it was something that didn't sit fully right with me and I couldn't really touch it then. So I paused the question and it took me a few days and then I realized that the program was focusing on differences. And so I asked what if we try to explore what we have in common instead of differences because differences can be fun. You can understand different ways of being and so forth but it actually starts to cement differences rather than exploring what we do have in common. So we turned around and we decided to flip the questions and flip the way we work. Who are we as individuals, what we believe in, what are the values, what are our dreams and wishes and we try to build culture from that. And then we found a much more powerful dynamics that brought people together and also overcome some of these initial barriers that we had when truly bring diversity or the flavors of diversity. Not only what you see but actually who you are, what qualities you bring to a team together. So what you're saying is that you have to seek for what you have in common before prior to the differences. Which is what is your biggest market? A biggest market. As a country, the biggest country is Germany. Which is the toughest one? I think there are several areas of challenges, if you can say. I would say US is difficult for us, not as people believe in the light of politics and so on. When we expanded to US, we were incredibly unstrategic. So instead of opening in one part of the country and create a denser idea version, we opened one story in York, another one in Texas, a third one in California. So you can say we are currently investing a lot in the US to get more IKEA up and running because we need more denser footprint. So from a profitability point of view, we need a couple of years in US to get bigger in order to actually facilitate the IKEA model. China is difficult from the point, it's a wonderful market, but it's difficult because it requires you to be on your toes in innovation. It is by far the most innovative market. Trends, you've been there yourself, trends come faster. Customers are incredibly fast that are adapting to new ways of engaging. We struggle with that sometimes, but then we say if there is any place we can learn from the rest of IKEA, it's actually China. The markets have slightly different thanes of challenge. We can see that popping online everywhere at the moment I think. You can say France is a difficult market from one point of view France. It has one of the slowest permitting processes that we know. So we would love to experiment, work more with retail expansion and testing your formats. Three years to get a permit to open a store. The authorities agree with us, so we have very good dialogue. But still the processes of permitting make France incredibly slow. So therefore we go to Germany and UK and other places. Germany is faster. Interesting. Are you well-known in the US, for example, if I talk to an average American about IKEA, I will know absolutely. So I think it's interesting with IKEA. IKEA as a brand is bigger than a footprint. So there is here something with uniqueness and I think something that I learned over the years to respect is that IKEA except for siding with people with the wallets, which we do. There is something about the positiviveness of the point of view on life, being the friendly rebel, being the one siding for climate environment and so forth. That makes us a loved brand across a lot of borders. And therefore I think, which is an interesting story, I think, for other companies as well. If you stay true to who you are, I know you represent, people will love you over time for that. I think that's the story with IKEA. People normally smile when you say IKEA. If I had given you a banana card and you would give me your biggest failure, what was it? Oh, my biggest failure. I mean, if I would be serious for a moment, I think when I think back, if I would have any advice to a younger version of myself, it would probably be not what I did, but what I didn't do or what I took too long time to have the courage to do. Sometimes these things are the ones, we should have done this and tested it further. What was it that helped me back? I think this is the nature also of big organizations and innovation when you have self-doubt. Otherwise, I think, what else is there, probably a lot of things I've stepped into where I shouldn't have done. In the end of the day, if you take like the TV story that didn't fly, now we know. We have made some collaborations that didn't fly, some experiments, some product lines. In the space of developing new city formats, one of the interesting thing was we thought that city customers would ask something else from us. What we landed was a smaller version of exactly what Ikea is. So, you know, instead of trying to please everybody. But I do think innovation is also about speed. You have to do your mistakes fast these days. So, what I do think, I would have done better if I had a banana card was to invest even more into AI and AI platform retailing to see what that takes us into the future. What does it takes you now, AI? Well, AI will impact Ikea in three ways, at least. On one hand, it will drive efficiencies and effectiveness. It's an incredibly good tool to use for non-value added work. In our world, that means, for instance, in the future you, as a customer, will be served by AI to simply task in different ways. And the approach we have is that way we can have more people selling kitchens, which is more advanced. It will change part of the foundation of the marketplace. So, it's always supply demand in the marketplace. A few years ago, digital companies like Amazon, like Google, redefined retailing, if you like. And now it's happening again. A strong wave of where the disruptors are disrupting the former disruptors is happening where AI agents become your best friend and advisor. And that means that as consumers, we might even stop making some choices or be even curious. And that you need to understand as a retailer. What is that marketplace? How can you be part of that? Then I think the last part is a scary part, where I think as much as we will be supported as humans of it, there are a lot of values. What is the source of truth? What is truth? How do you relate to machine-made advices in life? How do people advance in workforce, from application of jobs to how they learn and how they develop? We should be curious and take the benefits, but we shouldn't be naive. There will be a lot of risks in the human side of this that we need to understand. Is there any time soon where I can send the plans of my place and get an offer from IKEA saying, "You can put your kitchen like this." I said that to me now. I am saying, yeah. We did actually invest a few years ago in a company called Geomagical. We have something called IKEA Creative, which is an augmented app, which is quite cool. There are several techniques on the market, but what it does is, if you scan your room, you get the measurements and everything right. But it actually, you can easily take out the existing furniture if you like, move them around, and then you can add in IKEA's furniture. And we are looking into how do we, if you say a bad yet or you say a style or you say a life condition, we can give you a random version of what we think you would like. I see a lot of things now in Paris, but it could work also in China with very small places where it can give you ways to improve the rooms you see. That a lot on TikTok. Can you do that with your software? Absolutely. And if you look at IKEA, it's already very present in most of those or in many of those solutions being out there. But that is an incredible tool because it's fast and it gives you good ideas. What we try to do is to find a way to link it to the competence we have in life at home because everything that looks nice, maybe isn't smart from cleaning, from safety and other angles. We try to build in our competence about life at home into those models. I'll have to leave you because I think you have an important meeting afterwards. Can I say where? Yes, please. Are you meeting the president? I'm meeting some of his associates and staff, absolutely. Would you have a book that you would, if you had the chance to give a book to everyone in the world, which one would that be? No, we already have it. Well, a book to everyone. There are so many great books. But why not try? Do you know people on stockings? No. So this is the chinos. So that is the Swedish children's book about a young girl who is an optimist and an entrepreneur and a problem solver. And also a woman who doesn't accept not being treated as an equal and is incredibly fun and has a deep person. So that would be a nice book to get to see the face of the young. What's the main difference? She has the difference in the difference. I could see when I saw her face. Okay, very interesting. Okay. I'll try to that with my kids tonight, probably. What else did I want to say? I don't know. I think we're good. It was a great pleasure to have you here. We can follow you on LinkedIn, maybe. Yes, but Broden. As we said, we are one of the last two last question. What did you come here as you're not to see you anymore? What's your take for IKEA? So basically this trip, I had it over my CEO role a few weeks ago and I'm remaining as management board member together with my successor for up till 31st of December. So at the moment, I'm basically supporting him. And this particular trip is to come to Paris to celebrate the Paris Agreement. The 10 years of the Paris Agreement, we're here to share examples of success, but both on the totality of how we are successful in the climate sport world. But also to inspire others to copy and learn from us and other companies and the institutions that are successful in delivering to the Paris Agreement. And to my understanding, you have a new role somewhere at the UN, is it? Well, I have a couple of different interesting tracks into the future. And I've been nominated as the Swedish candidate for UNHCR, which is Felipe Grande, who was an incredible leader, has been on the job for 10 years and he's stepping down in December. So I'm one of 11 candidates on the list. So let's see what happens. One of 11. The chances are small still. No, the chances are 50-50, because either it happens or it doesn't. Like everything you live. So let's see. Okay, I had the answer. Maybe I'll ask it again anyway. That's one of my questions, but you ask it to yourself already. If you had a chance to give Jesper 30 years ago an advice, what would that be? Well, I do think one advice is to be even more courageous in trying things. And I think probably I would tell Jesper a young Jesper that it's going to be fine. Don't worry too much. Did you worry? I worried more as a younger. And then again, if I give that advice, maybe it's the worst advice I could give myself who knows. I'm not worrying can be a good asset as well, but that is what I would have said to myself. Jesper Brodin, thank you very much for your time. Thank you so much for your time. Thank you. Thank you. Thank you. You guys are new to General Astronauts yourself. We'll put some English speaking episodes in the show notes. You'll find some very cool episodes we've recorded recently in the past years. For example, we're very recently with even Tsau, the founder of Notion, which we've recorded last week. And a lot of those, maybe James Dyson, you know, from the, yeah, these are very cool. Hope we'll find you on the podcast. Maybe we'll release an English channel pretty soon. Thanks a lot. Follow us on the socials. Thank you. Thanks a million. Bye guys. Thank you. If I tell you this often, my favorite part is not for nothing. Because if you have a brother, you know for sure that moment. You're free. You're free. You're free. You're full of ambition. You'll finally find your first salary. And there, you block. You ask this question. How do I do it for the country? Well, this is exactly why it exists. The country is the solution to make your first country yourself. Without a war. Without going through a countable cabinet, and above all, without stress. The platform for the country takes you by hand to every step. You're guided. You can't forget anything. Even if you know it, nothing at all. But P.Feed is also a terrible thing. Clear, not to hide, not to be surprised. It's simple, it's effective. It's everything I like. 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