Peter Agnefjäll, Ikea chief, is keen to stress he has his own style

September 1, 2013 2:16 pm

Peter Agnefjäll, Ikea chief

By Richard Milne

 

It would be easy to think that the Ikea manual on how to build a chief executive goes something like this: take a blond, Swedish man from the south of the country; dress him in a shirt, jumper and chinos; have him stress the importance of the retailer’s vision of “a better life for many people”; tighten with an Allen key. On meeting Peter Agnefjäll, who officially became the Swedish company’s fifth chief executive in its 70-year history yesterday, it is tempting to see him as an Identikit ofMikael Ohlsson, the man he replaced. Both are softly spoken and prefer to talk about the company’s unique culture and its interaction with customers than about profits and targets.But dig beneath the surface and the differences become more apparent. Mr Agnefjäll’s appointment reasserts the trend of Ikea chief executives having been an assistant to its still influential founder, Ingvar Kamprad. Mr Ohlsson remains the sole exception and his four-year tenure, marked by scandals in Russia and France, was exceptionally short by the company’s standards.

Mr Agnefjäll, however, does not want to be drawn on any contrast with Mr Ohlsson. “I don’t want to compare myself to Mikael,” he says, sitting at a kitchen table in the new Ikea store in Älmhult, the small town where the company was founded. “I can only speak for who I am and what I do.”

He continues: “I really think that simplicity and common sense are key in order to continue to be [successful at] Ikea, and you have to trust in people. So far I’ve never seen a rule that has been better than common sense.”

But discussing his priorities as chief executive of the world’s leading furniture retailer, which recorded sales of €27bn last year, he strikes a different tone by adopting an approach that goes against the grain of his predecessor’s strategy. Mr Ohlsson had planned a significant boost in store openings to 20-25 a year up to 2020, causing Mr Kamprad to break his normal silence to express his disagreement. Mr Agnefjäll, who was assistant to Mr Kamprad as well as to former chief executive Anders Dahlvig and to Mr Ohlsson in 2008 and 2009, casts his lot in with the founder, saying he does not recognise the 20-25 target and that the emphasis should be on improving Ikea’s 300 or so existing stores.

He may be close to Mr Kamprad but retailing was in his blood. Mr Agnefjäll’s father ran several supermarkets in the southern Swedish city of Malmö and was helped out by his son at weekends. It taught Mr Agnefjäll some crucial lessons. “You realise that maybe the customer is the important person. Yes, in a way it’s not rocket science. It is about having the right products at the right prices when the customer wants it.”

The CV

 Born: 1971 in Malmö
 Education: Master of science in business administration, Linköping University, Sweden
 Career: 1995 Trainee, Ikea
1996-97
 Head of children’s department, Ikea in Älmhult and Malmö 
1997-99
 Commercial manager, Ikea of Sweden
1999-2002 International marketing manager, Golfstore Group
2002-06 Free range manager, Ikea of Sweden
2006-08 Padua store manager, Ikea Italy
2008-10 Assistant to Anders Dahlvig, Ingvar Kamprad and Mikael Ohlsson
2010-12 Sweden country retail manager, Ikea
 Family: Married with two children

The quote is typical of Mr Agnefjäll as well as of Ikea: simple almost to a fault with some homespun wisdom thrown in. Much of Ikea’s philosophy is still based onThe Testament of a Furniture Dealer, a series of pithy and homely statements on business principles written by Mr Kamprad in 1976.

But Mr Agnefjäll took a different course and studied business at the Linköping University in central Sweden. He soon realised that his heart was in retailing even if his father’s supermarkets were no draw. Instead he started out at Ikea as a trainee in 1995. A year later, his first proper role came in the children’s department at the stores in Malmö and Älmhult, about 90 minutes away.

Mr Agnefjäll remembers it as an exciting time as Ikea had just started taking the section seriously. “We sold furniture, we sold quilt covers, like a miniature Ikea you could say. For me, it was a fabulous learning place because you got to know a little bit about all kinds of products, all kinds of materials, different questions that customers were asking on a bed and on a quilt cover,” he says.

There followed a stint at Ikea of Sweden, a separate company that is responsible for developing the global product range. Once, when Mr Agnefjäll was looking after purchasing for the children’s department, Ikea had to stop selling a teddy bear because there was a danger its eyes could fall off. Instead of cutting links with the supplier at the cost of 600 jobs, he sent a designer to the factory and she came up with the Famnig cushion, a red heart with arms attached to it. It became a best-seller and the supplier had to double its workforce.

“Many companies at that stage would have abandoned the supplier, but . . . abandoning them would have put many, many people in a difficult situation. So we developed a new set of products but without these important details that became hazardous,” he says.

Next, however, came a dramatic break for a future Ikea chief executive: Mr Agnefjäll left the company. He insists that he joined Golfstore, a Malmö-based golf retailer, as marketing manager because of homesickness, not any frustration with the furniture retailer. He says he learnt two things. “One was a little bit better understanding of how a company works. When you sell that, an invoice goes there. You don’t really see that in a big company. And then I also realised how much I like Ikea.”

So, he was soon back at the furniture company, first working on the product range and then perhaps in his toughest assignment: store manager in Padua, Italy – without speaking a word of Italian. His first act was to get rid of the manager’s separate office; it was turned into a meeting room and instead he sat with the rest of his staff. “People were looking at me. They felt that was very strange but from a Swedish perspective you want to be close to your team, and close to people, so for me that was very natural,” he says.

There were also the small differences: “The Italians, they bought their coffee cups in children’s Ikea, because they were more suited for espresso.”

Mr Agnefjäll concedes the language – he was soon saying si and nobuono and malebut little more – was a barrier but that he learnt to be direct in his communication.

That directness even got him his big break when Mr Dahlvig came to visit. “We were debating what was good and what was not good, and I was pretty sure he didn’t like me at all,” Mr Agnefjäll says with customary humility, but he was soon hired as his and Mr Kamprad’s assistant.

Mr Agnefjäll has spent the past year shadowing Mr Ohlsson and preparing to lead Ikea’s 139,000 workers. The departure of Mr Ohlsson was announced last September in a move that was unexpected but which has been carefully managed by the company. The new chief executive’s priority is to double its sales to €50bn by 2020 while ensuring that Ikea’s values-based culture survives further expansion into China and, it hopes, India.

Mr Agnefjäll has moved with his family to the group’s headquarters in the Netherlands but he admits that not all his furniture is from Ikea. Some items are antiques, he says, before adding: “Our friends every now and then, when we have a dinner or so, they like to come with something else to tease us and then we cannot bear to throw it away. But, no, I’d say that the absolute majority of the products in our home are Ikea furniture.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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