IKEA’s expansion of their affordable, sustainable housing business Part 1
Is it part of a regenerative strategy shaped by non-linear people or a simple gap in the market?
Whichever way you look at it, IKEA’s expansion plans for BoKlok their affordable sustainable housing JV with Skanska, is exciting. A logical interpretation of their core values of a better everyday life for the many people. Recognising that as governments struggle under a weight of unprecedented complexities, a better life will increasingly mean helping people get what they need as much as what they want.
The climate crisis isn’t the only exponential challenge business has to address. Technology, Peak influence in the West contributing to populist national governments. etc. etc. However IKEA are as well positioned as anyone to deliver affordable and sustainable. Whether that’s housing, nutritious food in increasingly urban environments or low cost renewable energy
Helping individuals to get what they need to live in an affordable, sustainable way creates a completely different level of trust, blurs the citizen/customer dynamic. Building ultimate resilience in your model and the many people at the same time.
So is this part of a much more ambitious what we describe as regenerative strategy?
Six Degree People help businesses find and develop the leaders, advisors and coaches required to not only imagine a bold regenerative strategy but to execute at the fastest possible pace. We call these Non-Linear People and we’ll go into more detail when and where they might be deployed for maximum impact in Part 2 of this paper.
What is a Regenerative Strategy?
3 Core Elements
Weaker and Weaker Government Models - It doesn’t just assume that the national government models we’ve relied on for generations will not only continue to struggle to give their citizens what they need against the backdrop of multiple global challenges, that much is obvious. It assumes the pace of that failure will accelerate to the point where a volatile breakdown is a possibility.
Seeks to Regenerate Government Models Whilst Regenerating Your Own - A regenerative strategies’ response to the threat of the above is not the linear response of a business to fill a gap in the market, responding to the opportunities in the traditional way with appropriate products and services, that’s not enough. A regenerative strategy makes the choice to intervene to help governments re-imagine their role and in doing so, use those experiences to accelerate their own pace of change. Recognising that we need government models to act as accelerants to solutions, not brakes. A regenerative strategy has profound consequences not just for the products and services it sells, but the role of business and the blurring of citizen and customer.
Builds a Movement - Finally, it recognises that doing the above in isolation isn’t enough, no matter what the organisation, Google, IKEA or anyone else, they are part of the system and no matter how regenerative they are individually, if the system fails, they fail. So it commits to build a movement of other organisations from all over the world each committed to the same regenerative goals, backed by regenerative committed capital, each well positioned to lead in different ways.
So, is this part of a bolder regenerative strategy or an exciting, but none the less, more conventional business response? It probably depends on their faith in government models to adapt in the face of unprecedented challenges. For us it’s surprising that most businesses whilst prepared to question everything about their own model assume that government models will broadly remain the same.
IKEA haven’t announced their intention to follow such a strategy, indeed with their values, they might be uncomfortable making such a big statement, that’s not their way.
The answer is, we don’t know, I don’t have that insight, if pushed I would say not yet. Certainly, you can’t have a regenerative strategy without regenerative products, which requires a different investment and revenue model, so it’s a fantastic platform to progress from.
This paper isn’t intended to be a critique on IKEA. I could have chosen any number of increasing announcements from organisations or industries as a framework to ask the same question.
As I was writing this the insurance industries response to climate risks in Florida and California could have triggered a similar discussion, although on first impression I would say that it currently represents a more traditional response to an exponential risk.
This paper is intended more to highlight a thought process an organisation might go through as they naturally, sometimes unwittingly, accelerate their shift into developing products and services the world needs in addition to what it currently thinks it wants.
I chose to showcase IKEA for two reasons:
Their DNA “a better life for the many people” has so much potential to deliver what people need and want simultaneously.
Their private/family owned ownership model has much greater freedom to commit to a regenerative strategy than a listed business in its current form where short term shareholder primacy still dominates.