How the “IKEA Effect” Impacts CPA Firms

I heard an NPR piece recently entitled “The IKEA Effect.”  I was expecting something about IKEA’s growth or expansion, or perhaps a commentary on their business model.  Instead, I heard a clever way to describe how people develop more commitment to goals.

“When people buy furniture at IKEA, they are forced to assemble it themselves.  As a result, people report a high degree of satisfaction with their IKEA furniture, largely because of the greater sense of ownership from the labor required to assemble the furniture,” writes Scott Belsky for the online site, 99u: Insights on Making Ideas Happen.

The IKEA Effect is not just a whimsical thought expressed on a rarely-read blog that was converted to a radio piece.  My research found a scholarly article on the IKEA Effect that appeared in a 2011 issue of Harvard Business Review by Michael Norton, Daniel Mochon and Dan Arierly, all university professors.

To management devotees such as myself, the takeaway from the IKEA Effect is that people will value a project or a goal much more than merely being involved in it, if given the opportunity to create it.

CPA firms struggle with goal setting.  Big time. There are several reasons for this, including:  (1) Not enough time because production (finding, minding and grinding) often takes priority over everything else, (2) Partners lack the skills to literally write a goal properly (measurable, specific, and relevant) and (3) Little or no monitoring and follow-up on the progress of goals.

Adding to the goal setting challenges listed above is a huge mistake committed by many firms and their overbearing (but well-meaning) managing partners:  “Telling” the partners what their goals should be (put more crudely, “shoving goals down the partners’ throats”) instead of inviting them to create their own goals.

This concept isn’t new; it was developed years before the first IKEA store appeared in the United States in 1985.  People will have greater commitment to their goals if they are allowed to create them in the first place because they will take greater ownership in them.

It may be just as frustrating to CPA firm partners to figure out how to write a goal as hammering together an IKEA bookshelf or table.  But in both cases, people will place greater value in the result of their labor.

So now you can impress your colleagues by adding “IKEA Effect” to your jargon vocabulary, taking its place alongside ‘bandwith’, ‘solution’, ‘transparent and ‘value proposition.’  Jargon terms in business world.

Our Monograph Strategic Planning and Goal Setting for Results provides readers a concise, hands-on blueprint for the creation of a CPA firms’ strategic plan and the setting of goals.  It draws on proprietary methods, checklists and handouts use in our consulting work with accounting firms.