IKEAisacurioussuccessstory.
McAfee Coupon ThelinesattheSwedishstoresareendless, itsfurniturerequiresanengineeringdegreetoassemble, yetits$8. 5billionglobalsalesempireisexpandingrapidly. Evenmoreinterestingisitsreputation. IthiresfactoriesinimpoverishedcountrieslikeLaos, anditswoodenfurnitureisathreattoforestsfromBorneotoRussia. ItsimageastheMcDonald\'sofhomefurnishingisenoughtooffendthesensibilityofanti-globalizationprotesters. Yettimeandagain, IKEAhasmanagedtoduckthechargesthatsticktobrandslikeMcDonald\'sandNike, andtokeepitsnameoffthebannersnowwavedinangerfromSeattletoPraguetoBangkok. IKEAistheprototypicalTeflonmultinational. LikeRonaldReagan, knownasthe\"Teflonpresident\"(afterthenonstickcoatingoncookingpans), thereisanemergingclassofglobalcorporationsthatbyvirtueofcleverness, charismaorplaindumbluckmanagetododgeordeflectthebrand-bashingattackslaunchedbyangryradicals. Obviously, ithelpstocomefromalittlecountrylikeSweden, notthebig, badUnitedStates, andtobeNo. 2or3inyourindustry(farsmallerthanthelikesofHomeDepot). Thelargesttargetalwayscatchesthemostflak. Yetformorethanadecadenow, IKEAhasalsobeenmovingquickly--evenpre-emptively--toaddresschargeslinkingittoeverythingfromchildlabortodangerousplastics. Asaresult, nochargeeversticksforlong. Executiveshavescannedthehorizonforpossiblethreats--andstunnedsave-the-foresttypesbyshowingupatthedoorwithgenerousoffersofmoneyandhelp. Notsurprisingly, IKEAhasrarelyhearditsnamechantedindisgust, atleastnotforlong. \"Maybeit\'sbecausewedon\'tdothingsjusttogetridofaproblem, \"saysCEOAndersDahlvig. \"It\'srootedinourvaluesystem. \"Thissoundsliketraditionalpublic-relationsspeak. ButIKEA\'sstrategygoeswellbeyondthat. Itinvolvesclashingwithone\'senemies, buildingcoalitionswiththeopposition, backroomdeals, painfulreform--inshort, politicaltrenchwarfare. EversincetheBattleofSeattleinDecember1999, whenriotingprotesterstrashedthecity\'sbusinessdistrictduringafree-tradesummitofworldleaders, theanti-globalizationforces--fromunionstoenvironmentaliststostudents--havebeenwideningtheirhitlist. They\'velaunchednewcampaignsagainstnewtargets, frombankstohomebuilders. Theynowtalkcockilyoftheirabilityto\"swarm, \"torallymanyactivistalliesfor\"directaction\"againstthestoresandofficesofasinglecorporationaroundtheworldonasingleday. Astheprotestsgainmomentum, sodotheeffortsofmultinationalstoslipawayfromchargesthattheyrunroughshodoverworkers, plantsandlocalculturesinthedevelopingworld. TheyaretryingtobuildaTeflonshield, whethertheyputitthatwayornot. ManymayendupstudyinghowIKEAhasmaneuveredthroughthepastdecadeunscathedbychargesagainstit. WhenresidentsofseveralrichNewYorksuburbsroseuplastmonthtoblocktheconstructionofanIKEAstore, itwasnotthefirsttimelocalshadcomplainedthattheSwedishretailerwouldwrecktheneighborhood. YetIKEAstillposesnochallengetoWal-Martasthesymboloftheinvasivemegastore. NewsthatIKEAwillopenitsfirststoreinIsraelthisyeargotapositivereception, eventhoughthecompany\'sfounder, IngvarKamprad, nowhonorarychairmanat75, admitsheattendedNazigatheringsafterthewar. Thequirky, privatelyheldcompanywasrunfordecadesbyKamprad, whobuiltthebusinessintoanaffordableyetattractiveself-assemblyfurniturestoreforthemasses. Notoriousforcost-consciousness, heforbadefirst-classflightsandforcedmanagerstofindthecheapesthotels. Theegalitariantonestillexistsinpracticessuchas\"anti-bureaucraticweeks, \"whenmanagersworkinstoresorwarehouses. Sowhenitcametocorporateresponsibility, saysDahlvig, \"wedidn\'thavetoforceitdownthethroatsofourmanagers. \"IKEAlikedtothinkofitselfasabettercorporatecitizenthanmost, soitwasstunnedbythefirstthreattoitsgoodname. TheissueofchildlaborhadjustreachedpopularawarenessinEuropein1992whenIKEAwasblindsidedbyaSwedishdocumentary. ThefilmshowedkidschainedtoweavingloomsinPakistan, andcitedIKEAasacustomer. Thenewlyhiredbusinessmanagerforcarpets, MarianneBarner, immediatelyterminatedthePakistanicontract. Thensheaddedaclausetoallsupplycontractsforbiddingchildlabor, andsetofftoPakistan, IndiaandNepaltohavealookaround. OntheadviceofanactivistwithSavetheChildreninStockholm, shehiredacompanytomonitorsuppliersintheregion. Theheadacheshadjustbegun. AyearlateraGermandocumentaryclaimedthatkidsasyoungas5wereslavingoverhand-wovenrugsfor$4adayatSheenaExports, acarpetfactorynearDelhithathadsuppliedIKEAforfiveyears. BarnerimmediatelyfiredSheenaforwhatshethoughtwasa\"blackandwhite\"issue. Itturnedoutthatthestorywasfabricated, butwith80percentofIKEAcarpetsmadeinIndia, thePRdamagewassevere. IKEAwaslearning. \"It\'stooeasyforacompanytofallintoacomfortzone, butthensomethingshakesyouupandyourealizethatyouwereindenialonsomethings, \"saysDahlvig. InDecember1997, BarnergotbackonaplanetoinvestigatereportsthattwoofIKEA\'stextilesuppliersinIndiausedkidsunder14. Findingnoevidenceofabuse, shetightenedmonitoringoftheminimumworkingage. ThatsamemonthnewreportslinkedIKEAtoawickersupplieremployingchildreninthePhilippines, andBarneragainswoopedintoinvestigate. Shefiredthesupplierforrefusingtocooperateonbetterpolicies. Nonetheless, thesamestoryresurfacedintheNetherlandsayearlater, settingoffprotests. IKEAneededtodomorethanskipfromcrisistocrisis. ExecutivessoughtoutadvicefromUNICEF, theInternationalLaborOrganizationandunions. Intheautumnof1999, BarnerarrivedattheNewYorkofficeofaratherskepticalAlexFyfe, senioradviseronchildlaboratUNICEF, whothoughtshehadcomebeggingforanendorsement. Instead, shelistenedcloselyasheexplainedthatthebestsolutiontochildlaborwastoattackrootcauses, likepovertyandlackofeducation. Bythesummerof2000, IKEAhaddonatedahalf-milliondollarstoUNICEFtofightchildlaborinthecarpetbeltofIndiabysettingupschoolsandotherprogramsin200villages. \"Theyarealmostamodelofwhatacompanyshoulddo, \"saysFyfe. Onelaborfirewasout, butbythenanotherhaderupted. Nordicwoodworkershadthreatenedin\'98toorganizeaboycottoverreportsofdismalworkingconditionsatIKEA\'sRomaniansupplier. ThewoodworkersuniondemandedameetingwithIKEAexecutives, whowere\"extremelyskepticalatthestart, \"saysunionleaderUlfAsp. ButbyMay, IKEAhadagreedtoapplyILOstandardsforworkingconditions. ThenajointteamfromIKEAandtheunionwentonaninspectiontourofsuppliersineasternEuropeandAsia. UnionmonitorMarionHellmannrecallswatchinghappilyasIKEAdroppedaThaisupplierafteritrefusedtorehireamanfiredfortryingtoorganizeworkers. Theboycottnevermaterialized. Tounderstandhowdifficultitisforacorporationtowinovertheoppositionthisway, considerhowoftenitbackfires. Lastyearmorethan40oftheworld\'sbluestchipssignedontoGlobalCompact, aUnitedNationsprogramsponsoredbySecretary-GeneralKofiAnnan. Byagreeingtosupporthumanandlaborrightsandenvironmentalstandards, companiesfromDuPont(whichinventedTeflonin1938)toVolvogettousetheblueU. N. logo. Thepactwasinstantlycriticizedasinadequatebecauseitincludesnomonitoring. AndCorporateWatchofSanFranciscodismissesitas\"bluewashing\"--anewspinon\"greenwashing, \"activistslangforconcealingcorporatesinsunderaveilof\"green\"advertising. Ifclaimingtodotherightthingisnolongerenough, neitherisdoingtherightthing. Nikehassettheapparel-industrystandardforreformofwages, hoursandminimumworkingagesinitscontractfactories, yetitremainsaprimetargetforanti-sweatshopactivists, whosaythestandardisstilltoolow. Theyaresteppingupattacksontheworld\'slargestshoemakereventhoughrunners-upReebokandAdidasoftensubcontractthesamefactories. Infact, Nikeisinmanywaystheanti-Teflonmultinational--acompanythatseemstodrawfirebecauseofits\"inyourface\"corporateculture(followingstory). \"AtfirstNikewasjustoneofmanyprominenttargetsforus, \"saysErikBrakken, astafforganizerfortheUnitedStudentsAgainstSweatshopsinWashington, D. C. \"They\'vebecomethemaintargetbyleadingthebattleagainstus. \"Evenjoiningtheactivistcauseisnotafoolproofdefense. ConsidertheBodyShop, theU. K. -basedcosmeticsfirmwhosefounder, AnitaRoddick, hasbuiltthebusinessontheideaof\"communitytrade\"andfundedmuckrakingcampaignsagainstlargercompanies, suchasShell. Promotingherfavoritetheme, \"Trade, notaid, \"sheposedforanadstandingalongsidethechiefoftheKayapoIndians, anAmazoniantribethatsuppliestheBodyShopwithBraziliannutoil. Thechiefthenaccusedherofexploitinghisimage. TheBodyShopisstillafavoriteofmainstreamactivists, butitisjustanother\"corporatehypocrite\"toradicals. Manybigcompaniesarechoosing, likeIKEA, tobeatasilentretreatinthefaceofrealorpotentialattacks. AfterthebrokenwindowsatStarbuckscametosymbolizethe1999wreckageinSeattle, thecoffeechainchosethepathofleastembarrassment. LastApril, SanFrancisco-basedGlobalExchangeplanneda30-cityprotesttoforceStarbuckstosellbeanssoldbycooperativesthatdefendtheinterestsofsmallgrowers. Thecompanydispatchedseniorexecutivestoagreetothedemands, andGlobalExchangebackedoff. Similarly, Japan\'sMitsubishiCorp. appeasedprotesterslastyearbyabandoningasaltplantinMexicothatthreatenedpristinecoastlineandtheoffshorehabitatofwhales. AswastrueofRonaldReagan, theTeflonqualityofmanymultinationalsincludesanalmostundefinablecombinationofcharismaandcircumstance. Sony\'sreputationforqualityissostrongthatwhenitselectronicsarmlastfallrefusedinvestorrequeststoadoptstrictEuropeanUnionstandardsonrecycling, thefusslastedonlyafewdaysintheLondonpapers. Manyhugeglobalcorporationseasilyshrugoffpubliccontroversybecausetheydon\'tselldirectlytothepublic(chart). MultinationalsbasedinAsiaflybelowtheradarofWesternactivists, andgrowinglocalprotestmovementshavetriedbutfailedtostirupoutrageagainsthugeIndonesianminingoperationsandMalaysianloggingfirms. \"There\'sawholenewclassofmultinationalsthatareunbranded, unknownandextremelydifficulttoregulateorputpressureon, \"saysDaraO\'Rourke, professorforenvironmentalpolicyatMIT. Thatmaynotlast. ActivistswereemboldenedbySeattle, andarenolongerwaryoftakingoncomplexindustries. Inrecentmonths, groupsliketheNationalWildlifeFederationandFriendsoftheEarthhavestartedtargetingbanksthat\"fuelthechainsaws\"andofferingactivistsseminarsonsortingthroughfinancialrecords. OnApril11, Americanactivistswilllaunch\"SpanktheBank, \"targetingCitigrouponarainbowofissues--includingfinancingofthecontroversialThreeGorgesDaminChina. Prettysoon, nomultinationalwillbeabletorelyoncircumstanceforcover. \"Thisyear\'sTefloncompaniescouldbethehardesthit10yearsfromnowiftheyaren\'tcareful, \"saysJohnElkington, founderofSustainability, aBritishfirmthatadvisescompaniesonsocialresponsibility. IKEAlearnedthatlessonthehardway. Foryearsithadanaturally\"green\"reputation, looselybasedonitsrootsinconscientiousSwedenanditspreferenceforuntreatedblondwood. Thatstartedtoerodeinthelate1980swhenthefinishonIKEAbookshelveswasfoundtohaveillegallyhighlevelsofformaldehyde. ThenGreenpeacestartedleaningoncompanies, includingIKEA, tostopusingPVC, thehazardousplastic. Bytheearly\'90s, IKEAwasrunningenvironmental-awarenesssessionsfor20, 000ofitsemployees, butthetrainingwassotheoreticalitleftemployeesfrustrated. Thecompanyfounderdecidedtostepinhimselftocomeupwithamorepracticalplan. KampraddispatchedhispersonalassistanttoGreenpeaceInternational\'sAmsterdamheadquarters, wherestaffersdescribedfalteringeffortstomapthedisappearingforestsoftheworld. TheIKEAmanimmediatelyjumpedonboard. ThestunnedactivistsquicklycalledinDirkBryant, directorofGlobalForestWatch. HeflewtoAmsterdamexpectingtheIKEArepstobe\"corporatesuits, \"butfound\"theywerejustlikeus, insweaters, \"recallsBryant, whostillsoundsshockedbyhowIKEAenergizedthemappingprojectwith$2. 5millioninfunding. Itwasamasterstroke. Thoughmostfamousforitswoodfurniture, IKEAisrarelyattackedbytreehuggersouttosaveancientforests. ThereissomegrumblingaboutitswoodsourcesinRussia. AndRobinWood, amerrybandofGermanenvironmentalists, startedtoprotestin1999afterspottingteakfurnitureatIKEA. Itendedinoneday, withIKEAexecutiveschattingamiablywithmembersofRobinWoodandlaterpledgingtosellteakonlyifitiscertifiedbyenvironmentalistsasnewgrowth. Intheend, IKEA\'sTeflonshieldislessaproductofluckandSwedishnessthanofhardwork. Itwasforgedinrapidresponsetocrises, hardenedbystrategicretreatwhennecessaryandcoveredbyapolicyofdiscreetsilence--evenwhenIKEAwastryingtodotherightthing. Forissuesasflammableaschildlaborordestroyingforests, nopublicityisgoodpublicity. IKEAhasdraftedacodeofconductforall2, 000suppliersgoverningeverythingfromovertimetorecyclingtechniques. In-houseinspectorsaroundtheglobewillusea59-itemchecklisttoevaluatesupplierseverytwoyears. IKEA\'senvironmentalteamislookingatrailwaysandotheralternativestoexhaust-belchingtrucksthataggravateglobalwarming. YetIKEAhadnottalkedaboutanyofthesemeasuresinpublicbeforeNEWSWEEKasked. \"CallitTeflonifyoulike, \"saysDahlvig. \"ButnowwehavesomethingIthinkwecanstandupfor. \"Whenthenextactivistattackcomes, asitinevitablywill, IKEA\'sdefensiveshieldwillbestrongerthanever. GetNewsweekonyourTablet