Leadership Series. In 1999, Mr. Monti joined BAA McArthurGlen

Transcription

1 Roberto Monti Boyden s presents discussions with business and thought leaders from organisations across the globe. The series focuses on topical issues that offer executives, political leaders and the media insight into current trends in business and talent management in the global marketplace. This issue features Roberto Monti, Region Manager, South and East Europe at IKEA. IKEA is the leading home furnishings company, with more than 320 stores in 39 countries globally. The company employs 131,000 people from 48 different nationalities. Mr. Monti discusses how sustainability and people-orientation underpins IKEA s corporate culture, how values are transmitted across the globe, how the European economic crisis provides opportunity, and how proper mix of talent is critical for success. Roberto Monti Mr. Monti has held several positions at IKEA starting in He was transferred to Italy in 1992 to support the company s initial phase of expansion as the Operations and Business Navigation Manager in the country. Shortly after he was appointed Store Manager, a position he held for both running units and build up projects. In 1999, Mr. Monti joined BAA McArthurGlen as General Manager introducing the outlet concept in Europe and Italy specifically. He returned to IKEA in 2001 as Retail Manager, becoming Managing Director for Italy, the fourth largest country in the IKEA group, in Mr. Monti has been leading IKEA s operations in Southern and Eastern Europe as the Region Manager of South and East Europe since He acts as President for the respective country boards and is a member of IKEA s Retail Group Management. Roberto Monti studied International Relations at the University of Lund, Sweden. Boyden: IKEA s sales for 2011 grew nearly 7% and the company captured share in almost all of its markets. What trends are you seeing for consumer retail in Italy and the countries you manage? Monti: Looking at our 2012 fiscal year ending at the end of August, our expectations for this year are pretty close to how we closed This is an important finding for us. We can see a good stable trend in consumer retail on an overall global level. That said, we have probably never had such a big spread in consumer retail activity between the different markets in which we operate. That tells us something about the different trends, business outlooks and market conditions in these countries. For instance, in the countries where I am working more directly, which are in Southern and Eastern Europe, covering a region that goes from Belgium to Russia, the scenario is quite different in Italy and Spain compared to Russia and Poland where growth pace is among the highest in the IKEA world. That said, we are taking

2 p. 2 substantial shares in many markets. This includes Southern Europe where consumer confidence is very low but where our offer is also affordable in difficult times. I can see big changes in consumer behaviour across different markets in Europe. Some of these markets, such as Italy, are fairly used to high levels of private saving. They reduce consumption quite strongly in times of crisis. This market is not as volatile as the Russian market where everything that they have going into the economy is more or less going into consumption. So you see big movements in consumption based on oil prices there. Boyden: Do IKEA s sales patterns generally follow the trends in consumption or do they buck the patterns and are actually leading the market? Monti: By definition we tend to have even stronger growth when times are positive and there is higher consumer confidence. But in proportion, slow and difficult times are also very good IKEA times. To some degree, wanting to be there for many people and trying to create a better life for them makes us even more relevant in tough times. Boyden: Do you market differently in different economic cycles or do you stick with the same approach? Monti: It is important for us to have a long term view in the way we market ourselves so that our basic messages are always coming across consistently regardless of how things are looking. We stick to our core business and to the importance of the home. And of course, our offer continues to focus on style, price, function and the growing role of sustainability. In addition, from a tactical point of view and looking at the commercial calendar, there is, of course, a relevancy in being close to people, listening to their needs and adapting to their situations in the short term. From that point of view, some of our commercial offers are very connected to the current times. Overall, though, I would say our market approach has been consistent over time rather than changing from one place to another in the short term. Boyden: How does IKEA s culture of sustainability, both from an operational and corporate responsibility point of view, contribute to the company s success? Monti: Trust is an important component of the company s success and our culture of sustainability is part of building that trust. I believe it is important to see how we look at our sustainability efforts and direction related to our business. Our vision of creating a better life for many people means that we have to be sustainable in different ways. This takes me back to IKEA s origins in a small region in Sweden, where

3 Monti: This is something we always think about, How do you incorporate change in a constructive way in an organisation that is growing and becoming very big and successful? If you don t, by definition, over time something will flatten out. You will continue to do more of what you know and do it may be slightly bet p. 3 the scarcity of resources made people think, How can you do more out of less? In reality, a lot of the creativity and innovative approaches that we find within IKEA and some other companies that were born in this region come from this ethos. Our respect of resources has always been high, although today we talk about sustainability perhaps in a more conscious way. Sixty-five years ago when the flat packs were born, it was one way of saving transport cost. Now, of course, from the CO2 emission point of view it becomes very naturally a win-win situation. Boyden: IKEA is one of the most progressive and consistent companies on a global basis in terms of cultural diversity and social responsibility how important are these corporate values in your opinion? Monti: IKEA s corporate values of taking social responsibility and securing cultural diversity are part of our success story in both good and difficult market conditions. It also helps us in tougher times to continue to have a long term approach and to be inspired by our vision to create a better everyday life for many people. Of course, in order to have the financial means to make it all possible we need sound business development both in the short and long term. Having a healthy business and growing it is a way for us to take our social responsibility. It also forms the basis for the possibility to take other important social initiatives. Boyden: Is there pressure to do the right things better? Monti: Being a successful company that claims to live by certain values means that public opinion on us can be more demanding. It also creates a high level of vulnerability and an enormous responsibility to live up to these values. Of course, we have a lot to improve in the way we act upon things, and as a big organisation we have to make sure that things are taking place in the right way. For example, one aspect is that we want to secure a market relevant home furnishing offer that actually understands people s needs in such diverse different environments as China, Japan, the US or Sweden. To do this, you need a natural drive to be very close to local communities and listen to their needs. You also have to recruit people based on the right values. Boyden: How do you continue to transmit your core values as a large, expanding global corporation?

4 p. 4 ter, but in the meantime society will have changed. How do you act upon not only being reactive but being proactive? In clear terms, we still abide by our main values, which are that we dare to be different and we take responsibility. But becoming bigger and bigger and having been a success in the past, it can be more difficult and tougher to get change across and alter your format. Boyden: How do you stay close to people as a large global company? Monti: As a large global company it is crucial for us to be globally present, with a strong identity, not only from a range and style perspective but also in our way of working. Yet we must also remain relevant and inclusive in the locations in which we operate. To some degree, this means creating a very people-oriented and customeroriented focus and then giving structure in methods, means and tools to put it all together. We have many people in our organisation who are applying our structure and methods in the way they work with the local community and, from a business point of view, understanding the big commercial opportunities we have. This is our situation today, where we are trying to take the next step forward in using our scalability and efficiency as a big group while also staying close to our end-markets. Boyden: With IKEA s exponential growth and expanding international role in the world of design, where do you go from here? Monti: What you see today is that we have secured a design direction that gives us a clear identity in our product range with strong ties to our Swedish roots, but at the same time is wide enough to meet different needs and style preferences around the world. We have to add a more local touch, from a functional and style perspective and also in pricing, in order to meet certain needs and opportunities of our different markets. There will be more local elements not only in terms of design but also in the way we produce as we want to expand production closer to where the sales take place. Using local materials and production facilities in close proximity is important from a sustainability and lead time point of view. In addition, there will be some local developments taking place that can trigger new challenges and opportunities when it comes to the design. Overall, the design work will continue to be coordinated from our offices in Sweden where we have a lot of international colleagues representing the full diversity of the organisation.

5 p. 5 Boyden: So there are many elements that factor into product design? Monti: We never design anything just for the looks of it. Design for the aesthetic part is one component of course, which is crucial, but the functional and sustainable parts and finally the price all go together. The belief in our design will always be backed up by what the product should do and how our solutions fulfil all these requirements. This means that the designer sometimes has to make a greater effort to really know how to use the factory equipment, machinery and raw materials in a way that actually respects what we want to achieve. Boyden: Are there any specific areas in the home that IKEA will invest more in? Monti: We continue to put in a lot of effort to take the next step forward in outdoor furniture and bathroom products. The area of outdoor furniture, which could be everything from actually living or storage, or for the balcony or the terrace, has been an underuse of our potential. In the bath space I feel we can actually invest much more, which is what we are doing now. There are many opportunities where an outdoor offering is important all year round. If you take markets where the purchasing power is lower, as in Eastern Europe, most houses still have a balcony which customers can make better use of through our outdoor products. Boyden: What are some of the investments you are making to recruit talent? Monti: We have invested a lot and will continue to invest in making room for young talent to grow quicker and beyond what would otherwise take place in a normal staircase model. An area where we absolutely give a lot of priority is to make sure that we have a high presence of women in key positions in order to secure a good complementary gender mix. Most of our customers are women making buying decisions -- which gives us yet another strong reason to work in this area and also attract talent. We can still improve this a lot. We are creating room for young mothers and women in general to have a strong possibility to manage their family lives and at the same time develop their careers within the IKEA community. We have had several good experiences in this regard, but it takes a major mindshift to create these premises. Boyden: In your opinion, what role does a diverse background, personal and/or professional, play in shaping a leader? Monti: It can play an enormously big role and often does. A diverse background actually gives a person, con-

6 p. 6 sciously or unconsciously, a wider playing field to work in. It can often make it a bit easier for a person to see things in a more open way and from different angles and also enable them to raise more questions. Of course, the use of these skills might vary. For instance, if you have a high capability to adapt, then you still have to watch out that you don t lose your own personality or integrity. Otherwise, while you might adapt, you don t actually form yourself as a leader. Boyden: How does your own multicultural background help you manage business operations across several European countries? Monti: As I look at my own background, I am half Swedish and half Italian. My family spent many years in Germany, Brazil and in the US, which are very different environments. I think that has helped me become curious about different cultures and different realities and also not make judgments too early based on the first layer of observation. Then it is a bit about how you develop your leadership and how you can make the most out of having a diverse background. If I look into my own leadership, it is not only connected to cultural diversity but I am also using quite a lot of the emotional intelligence to connect to people. For instance, when I was working as a managing director in Italy, it helped to have a Swedish background and also to know the Italian culture. That said, you still need to have a genuine interest in people in order to connect. Boyden: What is your approach to management recruiting, and how has the European crisis altered your priorities/approach in this regard? Monti: I really don t know if the European crisis has changed our priorities. For us, the people focus has always been quite high in that the right people will help us realise our vision and business ideas. Through the years, our focus has been to find people with values that are close to ours -- which doesn t mean the same behaviours or otherwise our creativity and diversity would be rather low. However, I absolutely think the European crisis plays a role today in the recruitment of talent. Finding more than one kind of talent beyond what looks good on paper is important to us. What is different today with the European crisis is that today we have even better chances of finding top talent. The competition to go to a strong dynamic organisation is also getting higher. In the last few years, we have consciously placed increasing importance on employee competence and also on our employer branding. With the European crisis, everything we are doing now from a recruitment perspective, including the requests, demands and applications, needs to be done at a higher level.

7 p. 7 Boyden: Traditionally, many of IKEA s people have attended the real world retail university often instead of a traditional academic university. Has that changed? Monti: Honestly, that has evolved. I believe in the past there was a lot of focus on finding talent and people who had specific experience in retail. That continues to be, of course, a way of recruiting people. However, if we find people with a similar culture or with evident talent or with the background and experience that can be applicable, then we will still very much consider the person more than just their CV. What has evolved is that there is a much more conscious approach toward building competence, regardless if it is inside IKEA or if it was before someone comes to IKEA. So, schools and universities as sources of talent have grown in importance. That s one of our sources for finding good, talented people for IKEA. Boyden: How would you describe your leadership style? Monti: I believe that I am very committed, passionate, with a lot of people-orientation, and engaged as a person and as a leader. I truly feel engaged when I am out visiting, listening and talking to people in different situations, regardless of whether it is the factory, the retail environment or out in the market. I am also rather focused on what I have in front of me today while simultaneously thinking about how that connects with the longer-term results I want to create. I have a natural and dynamic style and am engaged in a way that is easy for me to connect to big or small issues. While I am quite self-driven, I do need a product or a topic that I can really burn around. Then, I become very result-oriented. Boyden: What are your views on the quality of a good leader? Monti: In all industries, you need leaders to be independent and visionary and, at the same time, result-oriented. There has to be some kind of natural talent at the centre. I think one needs to be able to engage on many levels to be, in a natural way, a role model while walking the talk. Leaders that are creating some kind of value surround themselves with talented people. They also have the courage to go towards the unknown and think outside the box. If you are not open to go towards the unknown it will be very difficult to lead people into something new. Then, to some degree, a leader needs to be a strong communicator. This may manifest itself in different ways based upon the kind of organisation you work in, but some kind of strong communication skills are important.

8 p. 8 Boyden: Leaders have different communication styles. What are you best at? Monti: When I say a leader should be a strong communicator, that doesn t necessarily mean that you are the one being the best on stage. Rather, it means finding a way of communicating and interacting with a large number and wide variety of people. That might mean that you need a communication mix which uses different channels and tools at your disposal. You might be stronger in your use of one or the other, but your awareness of communication and ability to actually connect is crucial. In an organisation like ours, half my time is dedicated to my line countries and the other half across group management. If I look into other countries where I am working with some 40,000 or 45,000 people, it is very difficult to have face-to-face interaction with everyone. My communication tools include everything from video to written communication to in-person visits. In my case it is very much the complementary channels that make the total sum, but I prefer face-to-face communications. Boyden: The current market obsession with short-term results sometimes makes it is easy for companies to lose their connection to employees essential psychological and spiritual motivations how to you manage to stay in tune with your teams? Monti: At IKEA, we are working quite a bit to try and delegate as much responsibility as possible out to the front line so that people truly feel that they are responsible and accountable for what they re creating. Here the purposing becomes crucial -- that is, the reason why they are doing something, how they connect to the bigger picture and what they want to obtain and achieve on a group level must be crystal clear. Then, of course, trying to make sure that the managers and leaders we have on the front lines, along with their coworkers can, with their different roles, all feel that they are contributing to the bigger picture. I dedicate a lot of my time to the purposing and try to be out there listening to people so I can connect these two. I also expect and count a lot on the middle management and country management, to take their very important role of motivating their people seriously. Boyden: In your view, what role does compensation, versus corporate culture, play in employee retention? Monti: I start with the assumption that compensation and benefits will always be important to people. However, employees have to connect to the corporate culture and feel that the corporate values of an organisation are relevant to them. I believe our corporate culture and our vision of being part of something bigger is playing a much stronger role in people s retention rather than just compensation and benefits.

9 p. 9 This follows the assumption that we take care of people in a correct, clear and transparent way and that they feel recognised with their compensation and benefits. No doubt, as a dynamic and expanding company, our capacity to provide people the ability to develop themselves, improve their competencies and have new career possibilities in different parts of the organisation and the world is a much higher retention element than the compensation itself. At the same time, compensation and benefits need to be taken care of in the right way. All this works, of course, if we recruit the right people and promote on the right basis. If we recruit people where maybe the aspiration and the expectation of the role is not matched by our compensation and benefits then by definition it will not be a long marriage. Boyden: What s the greatest lesson you learnt as a leader and manager? support to you as a leader. But also believe in your talent. The other thing is to secure a mix of complementary people around you. If your strengths are of a certain kind, make sure that you have others covering up for your weaker areas and that you have strong people around you from a function or competence perspective. You should never be afraid of having people be better than yourself. Rather, it should be the other way around. You will actually create personal growth and development by having good and more talented people around. We would like to thank Anders Lindholm of Boyden Italy for making this edition of Boyden s possible. The views and opinions expressed here do not necessarily represent the views of Boyden; only those of Mr. Monti. Monti: I think you have to believe in your talent and continue to nurture it all the time. Otherwise, it will be a much longer stretch to be able to be successful as a leader and a manager. There are also pitfalls to this. If your particular talent is in some areas, you could easily focus your efforts there or overdo it. Having self-awareness is a good