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Change Management & the ‘IKEA Effect’

Posted Thursday, September 24th, 2015

IKEA is the world’s largest furniture retailer. It operates 373 stores in 47 countries, has 500 million customers per year and makes over $20 billion annually. IKEA became the world’s #1 furniture retailer by designing and selling ready-to-assemble furniture.

It is also true that IKEA designs chic, modern, eco-friendly furniture. And IKEA managers spend a lot of time maximizing supply chain value, striving to lower operational costs and promoting innovative, cost effective manufacturing and design practices. But the truth of the matter is IKEA reached that lofty position by making you do some of the work.

Of course, consumers are perfectly happy with this arrangement. They get quality beds, bookcases and coffee tables for relatively low prices. Buyers are able to transport the flat-packaged furniture home without waiting or incurring shipping costs. And, after a few hours of work, they assemble their purchases into the bed, bookcase or coffee table identical to the one in the IKEA showroom.

For anyone who has ever shared the above consumer experience, however, the process of assembling IKEA furniture is not always an easy one. The instructions are drawings, not words. There are websites, TV shows and even films about the difficulty of assembling IKEA furniture. There are even companies who will come to your home to assemble your IKEA furniture for you – for a fee, of course. But Google “IKEA” and you get 108 million hits. That’s a lot for a furniture store. IKEA is wildly popular and its continued marketplace dominance proves it. The question is, why is IKEA so popular when the customer experience itself is often frustrating and less than ideal?

The answer lies in a phenomenon known as the “IKEA effect”. The more effort people put into something, the more they value it. Even a poorly constructed coffee table becomes a highly prized piece of furniture because of the long, difficult hours spent assembling it. We are biased to place a disproportionately high value on the products we partially created.

Now, transfer those lessons to change management. If everything is given to employees to facilitate a change initiative – well-crafted communiqués, structured activities, customized training resources – they have contributed little effort to bringing about the change. If employees are involved at the outset, and contribute to the scope and design of the change affecting them, they are much more likely to value the resulting outcomes.  The change management lesson from IKEA is clear – leave some ‘assembly’ to the employees.

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