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Business Transformation Specialists

Just reading between the lines – am I cynical or on to something at Ikea?

I just came across an interesting article*: Ikea employees say that changes to the stores are creating a divisive environment where “nobody is willing to help”.

From the article: “When Ikea restructured its 48 US-based stores in 2017, there were a few big ideas behind the overhaul. The move was touted as an opportunity to break down silos within the department-centric stores, boost online-fulfillment capabilities, and, perhaps most importantly, take steps to better meet customers' needs. The overhaul - known as ‘organizing for growth’ or O4G - even set up a role specifically assigned to seeking out and assisting shoppers: the Active Seller.”

The article is fascinating from a number of perspectives. The essential takeaway is that Ikea has clearly separated the role of customer engagement staff (the Active Seller) from stock room/merchandizing staff (Merchandising Basics). Active Sellers directly engage Ikea customers and Merchandising Basics staff engage with the merchandise – not customers. I frequently write about the concept of separating rules based work (i.e. Ikea’s Merchandising Basics staff) from knowledge and judgement based work (i.e. Ikea’s Active Seller staff). It’s an important distinction and creates significant improvement in organizational effectiveness and operational efficiency and therefore creates customer and business value. See my recent post - Think Like an Owner – Thriving in an AI Driven Economy - for additional insight into this concept.

One of the problems, however, with Ikea’s O4G initiative mentioned in the article is that Active Sellers and Merchandising Basics staff are both on the selling floor at the same time. From a customer perspective, Active Sellers and Merchandising Basics staff are Ikea people, regardless of roles, and from a customer perspective should be willing and able to help customers. However, from a Merchandising Basics staff perspective, helping customers is out of their lane and takes time away from their new and clearly defined non-customer facing role. The result is that Merchandising Basics staff cannot and will not help customers. This is very frustrating for customers and the Merchandising Basics staff. Active Seller staff are stretched thin and could use the help of Merchandising Basics staff, but do not get it, so they are frustrated as well. Ikea has created a lose-lose-lose situation. Why?

Ikea is a very successful and sophisticated organization with very smart people. So, why would Ikea implement a change in their business model with such a clearly predictable bad outcome? And that question is the essence of this post. I read the article several times and tried to figure out how Ikea green lighted this initiative. Then, it hit me, the cynical part of my brain took over. This is only conjecture on my part and I do not have any "inside" information whatsoever, but I have a hypothesis!

The level of sophistication of autonomous robotic automation (bots in the workplace) has advanced at a breathtaking pace over the last few years**. The work currently performed by the Merchandising Basics staff is now in the main stream of autonomous robotic automation. Furthermore, it’s more and more common and increasing culturally socialized to have bots working seamlessly in proximity to customers and staff in the workplace. Ikea’s business case is compelling. Ikea has the scale (worldwide: 403 stores, 194,000 co-workers, $40.2 billion sales), the use cases, the value drivers, the financial resources and the access to the technology to replace Merchandising Basics staff with the bots.

Reading deeper between the lines, the article describes that as part of the 04G initiative the role of a “Sales Employee” was split into two roles with a clear distinction between the role of an Active Seller and the role of Merchandizing Basics staff. Typically, when an existing role is split and multiple new roles are created, HR is typically involved to ensure the job descriptions are clear and in compliance with applicable employment rules and regulations. So far so good. However, splitting a role into multiple roles and creating clear job descriptions and clear distinctions among/between the new roles is an important precursor to enabling bots to fulfill a role.

Does this further bolster the hypothesis that Ikea is moving in the direction of bots? Viewed through the lens of automation, it's one plausible explanation of why Ikea implemented a change in their business model with such a clearly predictable bad outcome in the short run.

Let’s take this line of thinking one step further. Artificial Intelligence (AI) combined and Natural Language Processing (NLP) is advancing as rapidly as autonomous robotic automation. The implication is that Active Sellers can soon be replaced by bots too. At that point, the role of Active Seller and the role of Mechanizing Basics staff will merge back into a single role of sales staff. One bot can fulfill both roles and a fleet of sales staff bots can effectively and efficiently support the entire store from a customer engagement and merchandizing perspective.

Voila! Ikea will have a highly scalable store environment where every bot is willing to help. And, when not helping customers the bots are doing merchandizing work. What do you think? Am I being too cynical or am I on to something here? I would love to hear your thoughts - leave a comment below.

* * * * *

Today’s rapidly changing business environment favors high-performing, agile organizations capable of delivering extraordinary customer and business value.

Meeting this challenge often requires transformative change - and sustainable on-going improvement in business processes, organizational culture and supporting technologies.

The Inteq Group is uniquely qualified to assist your organization with this challenge.

* Also see a related article: Ikea was once touted as one of the best places to work. Now workers are fleeing over a policy they say has backfired spectacularly.

** For a great read on the state of autonomous robotic automation, take a look at the book Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford. And also take a look at a few recent related articles: Automation May Murder 10 Percent of Jobs Next Year and How Robots and Drones Will Change Retail Forever.

Topics: Blogs
James Proctor

James Proctor

James Proctor is the Director of Professional Services for The Inteq Group, Inc. and author of Mastering Business Chaos. He frequently lectures on business strategy, innovation and business transformation and serves on the board of commercial and non-profit organizations. Proctor is the author of Inteq’s acclaimed Business Analysis training series - reaching over 300,000 business and I.T. professionals worldwide. Proctor developed Inteq’s MoDA/Framework™ and Inteq’s BPR360/Framework™ - which have been adopted as a standard for business analysis by organizations around the world. In his book, Mastering Business Chaos, he reveals secret patterns he has discovered in thousands of client interactions ranging from Fortune 500 to emerging growth companies and government agencies throughout the spectrum of industry. The Inteq Group is a team of top industry professionals that provide business analysis training and consulting services, application software development services, and big data solutions to commercial and governmental organizations worldwide. Proctor has a B.S. in Industrial Management and Operations Research and an MBA in Information Technology from Indiana University. He started his career with the firm of Ernst and Young (formerly, Ernst and Whinney) with their consulting group in Dallas and specialized in the aerospace, financial services, manufacturing and defense industries.