Democratic efficiency: from the Ford Motor Company to the furniture retailer IKEA
When I was in college, the prevailing trend in the media and information companies put the stress on the effectivity. I remember it vividly: "use an effective language", "be effective to reach your audience", "ensure the effectivity in all the processes". Through the years, this concept has rightly evolved into the need for companies to be efficient. We hear "efficiency" every now and then; efficiency is in the core of all the company values, mission statements, energy projects and yet, we find it difficult to define it.
In our global market, companies understand this term as the ability to produce goods or deliver services with the least waste of time, effort and resources. This idea is vital when trying to increase productivity. Henry Ford, the founder of the Ford Motor Company, is the most emblematic and revolutionary example of this. By sponsoring the implementation of the assembly line technique and lowering costs constantly, he made the car available to the average citizen.
When thinking about this "democratic efficiency" I can't help bringing up a modern company embodying these values of "better products at lower prices": IKEA. The Swedish furniture retailer knows every single euro counts and, therefore, all those unnecesary costs which don't contribute to the value chain have to be ruled out. The objective of the company? To raise sales to 50.000 million euros by 2020. A very ambitious goal but the Swedish retailer is already working hard on different ways to achieve it.
First off, IKEA is reducing packaging costs. Changing solid pieces into several ones - making packages smaller - has led to a reduction of the number of trucks on the roads and, consequently, a reduction of the transport costs. Also, they are using innovative software programs to calculate the best packaging shapes and sizes, producing flatter boxes. Lastly, IKEA plans on continuing the current expansion strategy, opening new stores in markets such as India.
These are only a few of the efficient measures IKEA has in mind. Joanna Yarrow, Head of Sustainability at IKEA, explained recently they are switching to 100% LED lighting. She also presented a new project the Swedish company is running that "gives our co-workers a chance to try living more sustainably at home. They take home sustainable products and provide us with candid feedback, insights and inspiration based on their experiences", Yarrow stated.
Here again, we find the connection between IKEA and the so-called "fordism": the furniture retailer also incorporates good conditions for workers (internal communication, flexibility, the inclusion of their opinions in a bigger scenario), along with the production of affordable products. The approach is the same; how to make it real is up to each company. How are you betting high for efficiency? Share your way!
** If you'd like to read the complete interview with Joanna Yarrow, click here. It's very inspirational!