Photo - Ikea innovation

The Economics of IKEA: Why Does Labor Lead to Love?

Loved (or loathed) by millions, IKEA is the world’s largest furniture retailer with a unique business model. Their brilliantly designed flat-pack furniture means the customer does the work, and IKEA has a low-cost, high-profit outcome.

One of the secrets of IKEA’s success is known as ‘the IKEA Effect’. That is, people are more engaged and love an item more when they have put effort into creating that item or outcome.

Simply put, when you help build something, you’re more attached to it.

“Counterintuitive though it may seem, part of furniture giant IKEA’s success stems from its policy requiring its customers to build its products.”

The Economics of IKEA: Why Does Labor Lead to Love? – The Wall Street Journal.

Another example of this do-it-yourself effect is evident in instant cake mixes. Once upon a time, low-selling instant cake mixes were complete – just add water. However, success came when research showed that ‘add one egg’ gave the cook more engagement, ownership and pride in the outcome.

Teams today are built differently.

Generational change, distributed working, and digital transformation are a unique combination – and a challenge. As a result, there’s no one size fits all solution.

As leaders strive to co-create new ways of working and rebuild their culture, the shift has left many struggling to bring their teams together, agree on priorities and boost engagement.

One solution is to have teams do the work themselves. Using well-designed do-it-yourself tools based on solid research will generate your own ‘IKEA effect’, engaging your teams while improving employee experience and well-being.

Unlock the potential of our People-First Innovation and Tools Approach

Through our research-based, engaging and experience-driven tools. Boost team culture, improve relationships, develop skills and drive meaningful change.

Follow us on LinkedIn.

Shopping Cart
Scroll to Top