Plans simple enough to change when the world does
IKEA's founder warned that elaborate planning kills companies. His own firm's biggest moves came from responding to problems, not from a plan.
So let simplicity and common sense guide your planning.
The version that circulates, that simplicity and common sense should characterize planning and strategic direction, is a paraphrase; the sentence above is the one in Kamprad’s own text. It comes from A Furniture Dealer’s Testament, a short document he wrote for IKEA’s staff in 1976, and it sits in a passage arguing that exaggerated planning is the most common cause of corporate death. Complicated plans, he wrote, paralyze.
IKEA’s history supports the point. Several of the moves that defined the company were improvised responses to trouble. In the 1950s Swedish furniture retailers, angry at IKEA’s low prices, pressured manufacturers to stop supplying it and had the company barred from trade fairs. IKEA answered by designing its own furniture and, from 1961, having it made in Poland. The flat-pack approach is usually traced to an employee who took the legs off a table so it would fit in a car. None of these came from a strategic plan. Each came from people with a simple goal, low prices for ordinary households, looking for ways around an obstacle.
A simple plan makes that kind of response possible. When the goal is clear and the path is only sketched, a team can change the path without a committee. When the plan specifies every quarter’s targets for five years, each deviation needs justification, and the organization spends its energy defending the document.
For a startup the lesson is almost direct. A one-page plan with a goal, the main assumption and the next test is usually enough. Detailed forecasts past the next year are mostly guesses, and time spent polishing them is time not spent with customers.
The rule stops working where complexity is real. IKEA itself grew into one of the most carefully planned logistics operations in retail, with warehouse layouts, packaging dimensions and supplier schedules worked out in great detail. Building a factory, running a supply chain or launching anything regulated needs detailed plans, because mistakes are expensive and slow to fix. Kamprad’s target was bureaucratic planning, the kind that exists to satisfy the organization. Operational planning is a different activity.
“Common sense” is also less simple than it sounds. What seems obvious to a founder with decades in an industry may be invisible to a new hire. Simple plans work when the people carrying them out share enough context to fill the gaps, and part of a manager’s job is to make sure they do.
The balance, then, is to keep strategy short and operations as detailed as they need to be. A plan that can be explained in a few minutes can also be changed in a few minutes, which is most of its value.