Insight article

Searching for service excellence at Ikea

A wonderful case study of how to improve customer experience and reinforce brand culture, Ikea USA’s recent organisational changes have had a profound impact on employee engagement – for the worse. A recent Business Insider article paints a picture of employees left confused, disillusioned and demotivated by the changes that have been rung in. 

The statistics are damning: Glassdoor reviews have dropped from 4.5-4.7 in 2015 to 4.1 in 2017, positive reviews have dropped from around 90% to less than 70% – but it’s the employee quotes that really tell the tale:

  • “I get yelled at at least once a day because a customer couldn’t find an employee and I’m the only person in that department. It’s like, ‘I’m sorry, I’m with 12 other customers.”
  • “We were their biggest cheerleader. Now we’re kind of hesitant to answer questions from customers.”
  • “I’m this new employee taking this test and they’re asking me questions and it’s like — I don’t even know what this question means. I don’t even know what this role does.”

While this is undoubtedly wince-inducing reading for Ikea leaders, the direct commentary from current Ikea USA employees makes an absorbing case study for those investigating the dos and don’ts of handling organisational change on a nationwide scale. And this is the first thing to note from this cautionary tale – while the statistics frame the problem, it’s the verbatim feedback that really hits the hardest. The salient words spoken by those who are customer-facing represent Ikea’s biggest problem and, interestingly, they also point towards the solution.

Essentially, Ikea moved to effect two key areas: customer experience and reinforcing its brand culture. The introduction of the ‘O4G’ policy was intended to meet both these needs by redefining worker roles. According to Ikea, the objective was to “empower our co-workers to meet customers’ expectations in today’s multi-channel environment, and strengthen our position in the fast-changing US retail environment”, which all sounds sensible enough.

The challenge for Ikea therefore was to simultaneously create a radically customer-focused culture, whilst simultaneously retaining the internal and external culture that had made them one of the strongest brands worldwide. On paper, the customer-centric approach was simple: at a high level, employees previously specialised by department were now distinguished according to how customer-facing they were. Of the new roles, ’active sellers’ were carefully selected from existing ‘sales employees’ as the most customer-facing, sales-oriented team members. The other major structural change came from merging employees from restaurant, returns and cashier departments into a single ‘customer services’ function.

So what did employees take from these changes? The comments and anecdotes available to us are strikingly focused on certain topics, and those topics are predominantly negative in nature: pay disparities, lack of understanding of the new roles, lack of clarity from managers, and perhaps most importantly, a lack of understanding of the purpose of the new roles. 

It is this final topic that is worth most investigation. Purpose is perhaps never more important than when experiencing change, and this is surely one of the reasons why in the 21st century more than ever businesses are telling themselves to start with ‘why’. Starting with the ‘why’ would have been highly recommendable for Ikea in this instance. When restructuring roles, and changing well-grooved, intuitive understandings of team dynamics, it is essential to go back to the simple idea of ‘why’ we act and behave in certain ways at all. To underestimate the importance of this while roles were being combined represents a major oversight on Ikea’s part.

Moreover, it seems in this case that employees were largely left to create a new sense of purpose for themselves – it should be highly worrying for the senior leadership in the business that managers are mentioned by employees as being equally confused about the purpose and meaning of the new roles too. Engaging this key layer of the organisation is a critical factor in how the rest of the employees find a sense of purpose in their designated roles. It’s quite shocking that any manager leading a team through change would be so spectacularly unequipped to give context to team members as to what those changes meant, and how the team should respond – and yet this is exactly the story that is emerging from inside Ikea USA.

So the fact that the majority of the organisation was seemingly left to its own devices to understand the purpose of their newly-formed roles is undoubtedly a root cause and contributor to the other issues Ikea face. But the wider issue is the impact that all of this has had on Ikea USA’s brand culture. Here again, we hear more stories and quotes that underline the sense of rot that has set in. While Ikea has maintained a consistent brand voice externally, the different employee accounts suggest that internally, the tone has changed: “they’re doing all of these tiny things that are all adding up to us not being a good company to work for anymore” said one. So the external voice is maintained, but the employees feel forgotten and marginalised. If the idea is that the same demoralised employees are the ones expected to go out and deliver the bold new vision of customer centricity, it’s hard to see this playing out well for Ikea in the long run.

The notion that the internal and external brand of a company are two sides of the same coin is not a new one, and clearly there is room for difference between the two – but it is apparent that Ikea is not getting this balance right. Room must be found for customer-centric organisational change to accommodate employees and the idea of ‘what’s in it for me’, and it’s clear that Ikea did not sufficiently speak to this. Whilst one could attribute this to oversight, or analyse the quality of the company-wide discourse that ensued following the introduction of the O4G initiative, the critical factor is this: were managers equipped with a framework for the conversations that would inevitably take place through the changes?

The sense is that the leadership contingent of Ikea USA was simply not given the preparation, tools or training to properly guide their teams through the restructuring. ‘A framework for conversation’ was lacking – a roadmap to guide employees through the journey that lay ahead, and to enable dialogue that simultaneously crystallised the new sense of purpose that the changes entailed, the new behaviours that were required, and a sense of what new benefits employees could look forward to. It’s not enough to just define those aspects and communicate them over time – it’s the synthesis of these different elements into one idea that enables leaders to clearly and consistently make sense of the everyday for those around them. If you want to improve an area of your business like customer experience whilst consolidating and reinforcing brand culture, you need this framework for your leaders. It’s fundamental.

The feedback and thoughts from the actual employees on the shop floor at Ikea attest to an internal concept of customer experience that is at best delivering incremental improvements, and at worst, is the early warning signs of a crumbling brand culture. So while the stories are undoubtedly worrying for the leadership, the good news for Ikea is that the employee comments give an honest account of the problem, and this is where the manifestation of the problem can become the solution.

Illustrative stories of this nature are vital to an organisation. When times are bad, they illuminate problems and make strategy very real. When times are good, they serve to show why the changes are to be believed in, and indicate to those who are not quite there yet that there is a place for everyone. So one key approach for Ikea would be to focus on identifying stories that validate the structural changes, present the case for why everyone can feel a new sense of purpose in their new capacities, and also ensure that the picture is a holistic one. Embedding a storytelling faculty of this sort becomes both a barometer and a loudspeaker for company culture.

It’s the synthesis of the illustrative stories with respect to a single, dominant, strategic narrative that gives managers the chance to maintain clarity for their team during times of change. Time and time again, we have seen that an integrated programme that puts these two key storytelling pillars at the heart measurably delivers for our clients, and creates a long-term internal capability to manage future change too.

At The Storytellers, we know that listening to employees, ensuring that everyone has a voice and is recognised, and celebrating the everyday stories that inspire and give meaning through times of change are the key factors in how structural change can deliver on the lofty promises of new strategies.

Ikea would be well advised to keep the conversation going – and make their next goal to create and celebrate new stories that truly show the benefits of change for all.

Daniel Castro