How is IKEA keeping voluntary turnover under 23%—in an industry where 40-60% is the norm?
In this episode, Neena Potenza, Chief People Officer at IKEA US, reveals the values-first approach that drives co-worker loyalty, leadership development, and cultural consistency across thousands of frontline and corporate team members.
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[00:00:00] Neena Potenza: We actually focus our first interviews on values more than we do on experience. So we spend a lot of questions around teamwork. We talk a lot about mistakes. We very much focus on how do we make things complex for the few, but truly simple for the many, right from the very beginning. You should. Feel something different when you meet with us.
[00:00:23] Dave Travers: So, what does it really take for your business to attract world-class talent today? I'm Dave Travers, President of ZipRecruiter and on Talent All-Stars. We shine a light on the people and the day-to-day processes behind recruitment and retention at some of the world's most influential businesses.
Today's Talent All-Star leads the people strategy for one of the most iconic retail brands in the world. One whose products you probably already have in your home right now, maybe even within arm's reach. Neena Potenza is the Chief People Officer at IKEA US. She spent her entire career at the company helping shape a culture that's world-renowned for trust, togetherness, and values-led leadership.
We had a fascinating conversation about hiring for values over experience, what happened to her when she forgot to run payroll as an entry-level employee, and how she balances protecting company culture with adapting and innovating. So without further ado, here's my conversation with Neena Potenza, the Chief People Officer at IKEA US.
Neena Potenza, welcome to Talent All-Stars.
[00:01:26] Neena Potenza: Real pleasure to be here, David. Thank you so much.
[00:01:30] Dave Travers: Okay. IKEA, an iconic company that so many people know as consumers and are fascinated by for so many reasons, because it has such a distinct place in our minds. People do not confuse IKEA with other companies as consumers, and I have a feeling that people strategy is part of that.
You've been at IKEA for over three decades, I believe. How did you get started, and when did you know that IKEA and the people team at IKEA was not, maybe not just a job for you, but a career and maybe even a calling?
[00:02:02] Neena Potenza: Absolutely, three decades. David, when you say that I'm a little bit like. Ooh, taking a deep breath. But no, I think it's a really meaningful question and one that I actually had to go back and reflect a little bit on, especially after such a long period of time. But what I can recall really well is when I first started, you know what? I just needed a job. It was one of those moments, you know, graduating outta university.
What am I gonna do? I'd grown up a little bit with IKEA because I actually have a Swedish mother, so I applied to them, probably like thousands of others did, and I got a couple of interviews and then I actually got the job as a payroll administrator. I don't even know if those jobs still exist today, to be honest with you, but I was so excited just to be part of a brand that was probably global more than anything at that time.
Then I have to say, I'll never forget after my first week stepping into the offices there, it was in London, and then I recall feeling really quickly at home. There was something around the informality of the workplace. There was a complete lack of hierarchy, so everybody just talked to everybody. It was this notion of building personal connections really quite fast.
[00:03:24] Neena Potenza: Then I recall this incredible amount of trust that was just given to me when really I didn't have a clue actually what my sort of day-to-day role was. But there was this notion of, we trust you to do the job, you'll learn. And this feeling of constantly getting responsibility. And I remember thinking to myself, well, you know, I'll just say yes every time they asked me to do something.
Yeah. You know, just let's say yes. See what happens. And I remember this feeling of so many people were so informal, it really wasn't defined by your job title, this relationship that you had with IKEA. It was really about what you did every day, how you did it, and this notion of, I want to perform, I want to do a good job. And then, you know what was really interesting, all that informality, all this feeling of how I feel at home. And then suddenly you get introduced to some of the more formal documents. At IKEA, we had like a values booklet, and then I realized, you know, I'm reading all these booklets. But what was most important is that's actually what I was feeling every day.
So it wasn't so much the words in the paper or the script in these nice documents, it was more that, oh, this is actually something more than just coming to work doing the job. And then I have to just share with you, 'cause I never forget when I made my first major mistake. So you can imagine I'm doing payroll, goodness me, and I'm doing payroll for everybody in the offices, which you know is.
Many of the roles like CEO, CFO, and not really kind of knowing what all that meant. And then I was running payroll, and I absolutely forgot to pay people one complete month. So it's as simple as pressing a button in those days, and I just forgot to do it so everybody didn't get paid. That particular month. And then of course, we can scramble, we can fix things. But I'll never forget my manager at the time, other than me feeling completely mortified, she was very much like, okay Neena, let's take this as a learning. And I'm like a learning, I've just failed to pay everybody. And she's like, ah. But it's not so much the mistake itself, it's the learning that you take from it that will guarantee something special will happen next. So I think that for me was super insightful at the beginning knowing that what was a job became something three decades later as well.
[00:05:58] Dave Travers: That is such a great story. I think what's so cool about it is it's one thing to say, we have this cool document as you referenced it, you've experienced as somebody's been successful at the company, what those values are really like that they really resonated with you right away.
And trust being one of those values that you mentioned. But it's one thing to say all that, and it's another thing that now a senior executive is telling the story of something that many people's first reaction would be, well, I'm not gonna have this job anymore, or something like that. And so when senior people are exemplifying, we trust you here.
That's very different than saying, oh yeah, we trust you here. And I think that's very powerful. A lot of people listening, I would imagine. Are thinking, wow, those are the exact values I'd want at my place, or that we embody. I wish I had a culture like that that was that visceral that I connected with and could speak so eloquently and from the heart like you just did about the IKEA culture.
If you're a people leader wanting to start on that journey to say, we've got some really great values. We've got something, but how do I start making them that authentic and that real? How would you advise someone, as someone who's been at a company like that, how do you advise someone to think about how they would begin that journey?
[00:07:14] Neena Potenza: I think that's probably one of the most important questions that we actually talk about every single day. And I was, um, you know, if we just think a little bit about what is IKEA's vision to itself and, and to everybody who experiences us. And it is very much written in stone, and it's to create a better everyday life for the many people.
I mean, that still gives me goosebumps today, I have to say, after 30 years. And that doesn't just go for customers and for stakeholders, it goes for every single one of our co-workers, who, whether they choose to stay, join, or develop with IKEA, it is, it's ingrained in everything we do, and it actually starts at the beginning.
We recruit for values first, so we actually focus our first interviews on values-driven questions more than we do on experience. And I can tell you that can actually shake a few people at the beginning because you know, many of us are almost programmed to be able to sort of sell what we are capable of doing. The experience that has given us maybe even a little bit of what we are still working on in terms of our own leadership, but very much focus on, you know, one of our values is very much around togetherness. So we spend a lot of questions around teamwork. How do you show up in a team? What are some of the challenges you might have with team different dynamics? We talk a lot about mistakes. I mean, one of the main questions we ask you is to actually share a mistake you've made, and I can tell you the amount of interesting storie that we get from that really give insights into how people will show up in those kind of situations. We talk a lot about simplicity.
We very much focus on how do we make things complex for the few, but truly simple for the many to be able to experience IKEA, so we have a lot of behavioral type questions, a lot of storytelling, giving us examples, which I think is really interesting. So it starts there right from the very beginning. You should feel something different when you meet with us in that first moment. And then I think done really well. In the many cases. We are all about values embedded in everything we do. So from onboarding at IKEA, part of your onboarding, you'll get a lot of the reasons why we do things. Which also sometimes explains the reason why we don't do certain things as well, which I think is quite educational for many of us.
So are you onboarding, not just about your job and the knowledge that you need for your job, but it is very much around, well, why do we do it like this around IKEA? Help me understand the nuances of what's not in a manual or a policy, but more what's sort of ingrained in the way we interact and the way we talk to each other. And then I think a lot of that then moves on to building into the, every single day from the way we do learning at IKEA, we talk a lot about the everyday university and that most of your learning is happening in the moments that you're having every day, not in a training room, not behind a screen, or through a digital class.
So to speak, but we often talk about, you know, 70% of your learning is happening on the floor, in the meeting with the customer, in the meeting with each other. And that's really when some of the magic starts to happen. And then I think the last, but probably one of the most important things is that we talk a lot about leadership at IKEA.
[00:10:52] Neena Potenza: I think many people will often come to me and say, gosh, I've been through more leadership training in the first three years at IKEA than I ever possibly could have imagined. And I think that's a little bit what we are really trying to instill this notion of, we want you to develop and grow with IKEA, both professionally and personally.
It's much about your leadership journey that is going to help you grow at IKEA as much as it is about your experience and your knowledge, and I think that leadership journey is one of those moments that really can unlock the potential in individuals.
[00:11:27] Dave Travers: Wow. There's so much good stuff there. So let's take two parts you, you just talked about. One is the everyday university. I love that idea. And there's so much all of us can be learning every day, and thinking about all of that as a learning and development opportunity. And two is your focus on leadership. So let's let think about your journey at IKEA. Take us into a, an everyday university moment in your leadership when you're transitioning for the first time you've been successful, you've overcome an early mistake, you've been successful, and all of a sudden you're thrust for the, you know, the first time or the first couple times into really leading people.
Give us an example of how everyday university and how leadership development worked for you as you started not just being the individual contributor, but you started leading teams.
[00:12:14] Neena Potenza: I think it says. Super insightful question, and I'll never forget because the moment is still in my face today, and I've had a few, but this was a big one for me because I think one of the beauties of IKEA, of course, is it's a global company.
So if you choose to take that opportunity, you can move around the world with IKEA. So you probably hear I have a very British accent, born and raised in England, but I remember the first time that I got offered OP an opportunity to actually move to the us. And I'd never actually been to America. So it was one of those first moments where I'm like, okay, this is gonna be good.
Um, I'd been offered the role to be the human resources manager for the first IKEA store just outside of Boston, in a place called Stone. And it was one of those markets that people had been craving an IKEA for a very long time. So we started the buildup for the store, and our buildups for these big IKEA boxes.
They take quite a while because we're also recruiting three to 400 co-workers to join our family. And I'll never forget those moment, that first moment when I was, not only was I a, you could say a foreigner in a country that I didn't know and I needed to learn quickly. What I had with me was the familiarity of IKEA and coming into that store and really taking the charge of recruiting three to 400 people that were gonna join us on opening day.
Really starting to embed the culture of IKEA for many people who hadn't even shopped with us because there wasn't an IKEA nearby, but we really had to start a leading from, okay, what is this organization? What are you going to experience? How do you even put the product together? I mean, a lot of our training on the floor in those days was, okay, we are gonna spend two hours putting together a Billy bookcase, a chair, or a LACK table because when you start to actually do that, you start to experience what it's all about. And then most of the training in those early days was all on the floor. We'd get booklets, we'd be like building furniture, we'd be really looking at the replenishment of goods. Just as we are building the food restaurant, we'd be looking at recipes, being taught how to make them so there's so much about what a manual can't give you. That sort of experiential learning on the floor really is really deep down learning at its best.
[00:14:43] Dave Travers: I think it's so interesting that a company that is obviously so consumer-oriented in terms of its customer base. Has people at the very beginning, before you're opening a store, building the product, which is a very visceral part of the IKEA consumer experience.
And it connects you to what the, you know, soon after you get out of the store and go home, it's time to build the product. And the fact that you're starting out with your team of three or 400 people who've been through that and understand what that consumer's about to go face is really cool. And it really is powerful way of sort of embodying the values of what you hope the consumers to be able to do when they buy the product.
[00:15:22] Neena Potenza: You know, it's amazing actually. I don't know if you've read articles. We often talk about how relationships are made or broken over building IKEA furniture. So I can almost just picture that, that reality in people's homes as well.
But I think that's exactly what you say, David. It's really about how can our co-workers really understand the needs and dreams of our customers in their homes. So whether it's storage solution that you need, because you know, you walk into the hallway and there's the shoes everywhere, and we're trying to help people make their lives more functional. Or whether it's the notion of, you know, this is the small space living that I have in my small apartment. How can I get the most use? Outta the products, the functionality, the quality, also the low price that we're trying to really appeal to the many. And you know, this notion of life at home is really important to us.
So we know there's the sort of the product, we know there's the solution, but we also want our co-workers to be able to talk to our customers. Talk about, well, what is the problem you're trying to solve in your home? And how can we actually help you do that? So life at home, together with our products and our solutions is also that learning and development that we want every co-worker to really embed when they have a, a conversation with our customers.
[00:16:43] Dave Travers: As an IKEA consumer who's gone through that process. Early on in my marriage with my wife, I completely identify with that. Okay, so now here you are, now this very senior leader at this huge global company, and we're in a world that is changing. As fast as as at any period in world history, and at the same time, you're describing a bunch of things about IKEA, a business that has been around for a little while.
This sounds like there are a bunch of things you're talking about that don't change in terms of your culture and how you think about, so how do you, as a leader now of big teams, and think about it as a steward of the culture, how do you think about where are we going to embrace technology and do something a totally new and different way?
And what's an example of where, you know what, there's an IKEA way of doing things, and that's an example of just a new technology or new innovation or some new thing that we're not gonna do or change.
[00:17:38] Neena Potenza: So we have our culture and our values is and are never going to change. Our job is to uphold them. Our job is to really help our co-workers understand the way we do things around it. So we have what we call our forever parts. It's defined who we've been for the last 80 years, and it will probably define who we're gonna be for the next 80 plus years, but you're spot on in the fact that the world is changing and we are constantly looking at ways to become more efficient, but also ways to take some of the transactional tasks that our co-workers spend an awful lot of time and probably wasted time in what they are trying to do every day.
So one of the things we talk about, let's bring in technology, let's digitalize and potentially even standardize when it's transactional. Things that just need to get done and get taken off that list as quickly as possible, that we will work on, and we will continue to work on. But what's really important to us is where are those humanistic moments that require a deeper understanding between two adults?
Whether it's a customer looking to buy a new bed or a mattress. Whether it's a kitchen renovation that they're doing, how can they have an interaction with a co-worker who can really ask the right questions? You know, what are the things you're trying to solve at home? How would you like to sleep? Are you a back sleeper, a stomach sleeper, a side sleeper, where you can really start to then match the needs of the product with the needs of the customer at the same time?
So that's the journey that we're on right now. We've got a massive transformation journey ahead of us. We often talk about how do we perform whilst continuously trying to transform at the same time, but never letting go of truly what makes us who we are. Because we have a very clear sort of statement within IKEA, and it's this notion of your unique self is what makes IKEA better. So for every co-worker who's contributing every day, who's bringing their uniqueness to IKEA, that's what's enhancing both the customer experience, but also the environment in which we work in.
[00:19:59] Dave Travers: So Cool. I think there's so much wisdom in that, but I think what's so interesting about the idea of empowering people to bring their unique selves is that, you know, you described earlier that human interaction with a consumer. And so, you know, as an IKEA team member, that if I bring my real authentic self to that interaction with the consumer, that I'm at a company where that's what they want. It's not, I'm not expected to be some robotic thing, and, and certainly as a consumer, I. As I think about brands that I identify with or retail experience, I identify with entering into an AI interface.
You know, where should I go in the store to get what I want, versus having a conversation with somebody who's super helpful and understands I'm a side sleeper, not a back sleeper is like a much more memorable, visceral experience that will define my thinking about a brand for a long time to come.
[00:20:52] Neena Potenza: No, absolutely. And you know what I was reflecting a little bit listening to when you say that back at me as well. David, I'm often thinking about, you know, what do people want from the workplace, whether it's today or tomorrow, what will really bring meaningful work so that I can feel empowered every day, so that I can feel motivated, so I'm not there in the repetitive, mundane tasks.
I think that's where we've really seen technology and digitalization actually move the tasks that you need to do as an individual to much more meaningful, contributory conversational dialogues with our customers so that you actually feel like if you think of our vision, you actually feel like you are creating a better everyday life. For many people, versus ticking boxes off a checklist or you know, making sure that there's price tags and all that sort of routine day-to-day tasks that we need to do.
[00:21:49] Dave Travers: Okay. We always end these episodes with a rapid-fire section, so what I want to do is pose a hypothetical to you that you're. Getting in the elevator at headquarters or being a cup of coffee in the kitchen, and all of a sudden it's just you and the CEO who is like, hey, Neena, you know, I've been thinking how should we evaluate? The people team over the coming year. Like I have all these different ideas of things that are going on, but like, how should we measure how the people team is performing? What would you say?
[00:22:19] Neena Potenza: I have one very simple answer to that one, and it's actually KPI and a goal that we measure every single week, and that's our voluntary co-worker turnover. We often see that as the amalgamation of everything working. Do one of our co-workers choose to stay, or do they choose to actually move on? And I have to say, we are actually at, in our voluntary turnover this last period of time, now we're actually at less than 23%. Which in the retail industry and in many industries, I think we've really, really found something quite special because most industries today are at least 40% and over. So we keep at it. We keep on it. It's a goal of many of our senior leaders. And our unit leaders today, because it's constantly being monitored and looked at from ourselves.
[00:23:11] Dave Travers: That's an incredible stat as you say, and I can certainly validate that other large retailers do not have retention anywhere in that range, so that's an incredible accomplishment.
Okay. Same scenario, you and the CEO 60 seconds, and different question, which is. Neena, how with all that's changing in the world and with our values-based hiring, we have our values, but what is the skill or skills that we're gonna need more of in the future than we have in the company today?
[00:23:41] Neena Potenza: One of the things that is sitting in our conversations every day is very much around how do we know that we are making the right informed decisions every single day? We're talking about data, data, data, insight. Insights to how are those insights and how is that data actually telling us the story? We need to tell ourselves. So not only can we be strategic when we need to be, but we can also go down into the operational details because we have the numbers that are building the story that we need to make the right decision on.
[00:24:18] Dave Travers: Neena Potenza, it is so clear why you're Talent All-Star has been a pleasure having you on Talent All-Stars. Thanks so much for joining us.
[00:24:26] Neena Potenza: Thank you so much, David. An absolute pleasure.
[00:24:32] Dave Travers: That's Neena Potenza, Chief People Officer at IKEA US. We'll put her LinkedIn profile in the show notes below. And just a reminder, video versions of these episodes are available on YouTube. Just search ZipRecruiter and look for the Talent All-Stars playlist. If you've got thoughts on this episode or ideas for future guests, send us an email at talentallstars@ziprecruiter.com. I'm Dave Travers. Thanks for listening to Talent All-Stars, and we'll see you next time.