Ingvar Kamprad’s 11 Pieces of Advice to Young Entrepreneurs

Despite growing up dyslexic in a rural part of Sweden during the poor 1930s, Ingvar Kamprad managed to not only reinvent the furniture industry but also create one of the strongest corporate cultures ever. In the book Breven Berättar, his former assistant Staffan Jeppsson published some of the internal letters that Kamprad often wrote, by hand, to key decision-makers within IKEA. One of them included a list of 11 pieces of advice to young entrepreneurs, which in this article we will share for the first time in English.

Kamprad was very much a preacher of simplicity and of having clearly defined purposes and goals as a company. In his now legendary internal document called "The Testament of a Furniture Dealer", released in 1976 and today viewed as the operating system of IKEA, Kamprad laid out his vision for the company. IKEA was “to create a better everyday life for the many people”, and their “product range policy could never change”.

Forgetting the company’s core concept of extremely low prices combined with high quality was what could eventually kill IKEA, argued Kamprad. He often said that as long as there’s human life on earth, there will be a need for IKEA, and that as long as they don’t price themselves out of the market, the company could live on forever. Kamprad also often trusted his gut – his so-called “bondförnuft” (Swedish for farmer’s sense, basically translating to common sense) – more than expert consultants and economists.

With IKEA’s success and now well over 200,000 employees around the world, motivated employees have of course been very important. The same goes for Walmart’s Sam Walton, who also listed “Motivate” as one of his 10 rules for building a business. Kamprad had a unique way of combining his hyper-detail-oriented side with a very open-minded and free corporate culture, very much inspired by the Swedish saying “frihet under ansvar” (translating to freedom with responsibility).

By educating each employee in The IKEA Way, using The Testament of a Furniture Dealer almost like a bible, Kamprad gave everyone the mental tools necessary to easily make the right choice. Although, while creating a great environment for decentralized decision-making, Kamprad always verified the output. And not just higher-up strategic decisions, even minute details like how certain products were displayed by store personnel.

Being cost-conscious – especially when just starting out, before having a steady positive cash flow to rely on – is incredibly important. Small costs add up over time, unnecessary layers of middle management cause expensive inefficiencies, and either customers or the owners of the company will eventually pay the price. Below are eight maxims that Kamprad listed in The IKEA Word List under the section “Cost-Consciousness”, which were to be used as good examples on cost-conscious thinking:

• Simple products which are adapted to factory production.

• A Strong focus on purchasing prices.

• Simple, inexpensively built stores, located out of town.

• Achieving good results with small resources.

• Producing a product or service without a price tag is always wrong.

• Living and traveling cheaply.

• A strong awareness of all those little, insignificant expenses which can so easily mount up.

• An awareness that time is money. Learn how to use your time wisely.

Acknowledging personal limitations, Kamprad encourages entrepreneurs to surround themselves with incredible people. This statement also brings to mind a young Jeff Bezos, who in his early Amazon Shareholder Letters argued that you should “surround yourself with superstars”. This imparts the wisdom of assembling a diverse and capable team, underscoring the importance of honesty and self-awareness in effective leadership – especially when relying on Kamprad’s model of decentralized decision-making.

The words “humble” and “humbleness” are used 21 times in Kamprad’s quite short The Testament of a Furniture Dealer, truly emphasizing its importance. He argued it not only means consideration and respect for fellow men and women within the company, but also towards competitors. By constantly acknowledging the proficiency and success of one’s competitors, you are always reminded to improve. The incredible quote below gives this fifth point all the context it needs.

Kamprad always placed a great premium on responsibility, and "only while sleeping one makes no mistakes” has become one of his most famous quotes. He argued making mistakes to be the “privilege of the active”, and that the fear of making them the “root of bureaucracy and the enemy of development”. As long as you were humble enough to own up to your mistakes, learn from them and quickly correct them, Kamprad celebrated employees making mistakes.

It meant that they were trying new things – experimenting – often by doing things differently, which was another concept Kamprad often preached. “By refusing to accept a pattern simply because it is well established, we make progress. We dare to do things differently”. Kamprad truly understood the value of fostering a culture that brought forward outside-the-box thinking, but also a culture where personal responsibility was seen as a privilege.

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This seventh piece of advice immediately brings to mind Kamprad’s perhaps most famous quote of all; “Most things still remain to be done. A glorious future”. In typical Kamprad fashion, he thought differently; problems were to be viewed as opportunities, which meant problems were wonderful to have. This is also the second time on this brief list that Kamprad emphasizes the importance of having a clearly articulated task or plan. The similarities in reasoning, yet again, brings Bezos and Amazon’s writing culture to mind. In 1976 Kamprad wrote:

By first getting a clear view of the problem and how you will solve it, you can more easily determine if it is worth your while compared to other problems at hand.

“The general who divides his resources will invariably be defeated”, was how Kamprad started his section named “Concentration” in The Testament of a Furniture Dealer. The importance of always considering the opportunity cost of both capital and time was something Kamprad emphasized a lot. By carefully defining and actively choosing a path for your company, you automatically choose to ignore every other path.

If you over time lose sight of your originally chosen path, as mentioned in the first advice explanation, you might risk adventuring your whole company. You can of course always change path, but if you constantly reallocate your resources to go down different paths, you are forgetting at least two of Kamprad’s pieces of advice; #1 carefully document your business plan and how you are going to execute on it; and #3 be wary of tearing costs.

“We have decided once and for all to side with the many. What is good for our customers is also, in the long run, good for us. This is an objective that carries obligations”, is how Kamprad started off the first section in his The Testament of a Furniture Dealer, and that core objective of IKEA has not changed one bit close to half a century later.

In Staffan Jeppsson’s brilliant book, from where these pieces of advice were sourced, Kamprad often mentioned desks in his later letters. It represented the corporate white collar part of IKEA, and was often used with a negative connotation. “We have way too many desks, and most of them are placed way too far from reality”, he argued, afraid of seeing his life's work turn into a bureaucratic and slowly dying company with no close connection to its customers – the many people.

In fact, Kamprad took it as far as introducing what he called the “anti-bureaucracy week”, which was mandatory duty for all managers within IKEA. The concept was introduced during the 1980s and meant that for one week each year, office managers were to work “on the floor” somewhere within an IKEA warehouse – cleaning tables in the restaurants, stacking shelves, and talking to customers. Staffan wrote that he seldom saw Kamprad as angry as when he heard managers claim that they did not have time for the anti-bureaucracy week.

“Taking responsibility has nothing to do with education, financial position or rank. Responsibility-takers can be found in the warehouse, among the buyers, salesforce and office staff – in short, everywhere. They are necessary in every system”, wrote Kamprad in his section about taking responsibility. He viewed the people working on the floor as truly essential to the success of IKEA, since they were closest to the customers. The closer to the customer, to the store – to reality – the easier it was to use common sense as your guide.

“Make sure that you are one of the people with your feet left on the ground, understanding the difference between fantasy and reality. You will probably not be popular, but you will be respected and you will create lasting results.” is another excerpt from Staffan’s book, and it greatly describes how Kamprad viewed common sense and doing things differently. He wanted IKEA’s employees to get in the habit of questioning conventional wisdom, limiting the number of decisions they had to make, and rely on their common sense.

This last advice serves as a great reminder that even if you have a carefully defined business idea, have clearly articulated the problems you are about to solve, have hired the best people at solving them, it doesn’t matter in the end if you don’t take action and can show real output.

We believe this last advice goes especially well with advice number 9, and here’s another fitting quote from The Testament of a Furniture Dealer again; “A distrust of theories and ‘products of the drawing board’ means that it is necessary for us to face up to reality as often as possible. We know that one of our biggest problems at the moment is our large number of desks, and the fact that these are usually found far from the realities of our business. For us, it’s important to follow up all the decisions made in our own area, and to praise the co-workers who implement them.”