- In today’s CEO Daily: Peter Vanham on the chief executive succession at IKEA.
- The big story: U.S. conducts military strike off Venezuelan coast.
- The markets: Bonds are selling off but stocks are ticking up.
- Plus: All the news and watercooler chat from Fortune.
Good morning. Peter Vanham in Geneva filling in for Diane, who will be back in your inboxes tomorrow.
It’s the company you know from its Swedish meatball restaurants, the Billy bookcase, and of course, the flatpack furniture. But today, IKEA also wants to be known for another business challenge it says it has mastered: the internal CEO succession.
As this newsletter has highlighted in the past, getting succession right isn’t easy in the best of circumstances. The model where the CEO becomes executive chairman to ensure continuity, has often been a recipe for trouble. Ask Disney or Starbucks, and perhaps, soon, Target.
IKEA, however, is now touting its alternative: the temporary CEO overlap.
Jesper Brodin, chief executive for the past eight years, will make way in November for his Spanish deputy, and the first non-Swede to become IKEA CEO, Juvencio Maeztu. The pair is going on a joint tour to inform their employees, suppliers, and customers. In an interview together (of course), Maeztu told me they wanted their well-choreographed transition to be a “proof point that internal succession works.”
For the next three months—until IKEA’s annual meeting—Brodin will continue to serve as CEO, while Maeztu will instead be on a “listening tour,” visiting as many of the retailer’s locations as possible. Brodin will stay on for a few more months as senior advisor, after which he’ll officially leave the company.
“The most important thing for me is to allow him time,” Brodin told me, as Maeztu listened in. “The more I can relieve him, the better he’ll be prepared.”
“This is not about Jesper or myself,” Maeztu added. “We cannot hijack the transition. Doing this together is a good example of how one plus one equals three.”
IKEA’s carefully crafted and internal CEO succession model is becoming more common, headhunter Russell Reynolds said in a report released last month. Over the past year, three quarters of incoming CEOs were internally promoted, showing “companies are prioritizing stability” as they navigate regulatory and trade policy shifts, it said.
Yet when Maeztu does take over, there will be some tough calls to make.
In 2023, IKEA began investing $2.2 billion to expand its retail presence in the U.S. But with a historical model based on imports from Asia and Europe, the question going forward is how IKEA will be able to square its business model “for the many people” with tariffs driving up prices in the U.S.
And, while IKEA under Brodin has taken numerous sustainability initiatives, from generating its own clean power, to introducing a second-hand shop-in-shop, some of its circular and green economy initiatives will require regulatory support going forward, at a moment when sustainability is increasingly under pressure.And though there is change in the C-suite, don’t expect radical alterations to the beloved stores. “When we talk about change … We are not going to change the IKEA vision, nor the IKEA direction of being affordable, sustainable and accessible,” Maeztu said. “There is no change of strategy.”—Peter Vanham
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
