<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=290086984736480&amp;ev=PageView&amp;noscript=1">
Search
word-map-thumb

The Alternative Board Blog

Avoiding the IKEA Effect in your Business: How? Why?

Jun. 21, 2014 | Posted by The Alternative Board
Johnsons-Corner

We have a family tradition for Mother’s Day when we go to a truck stop for brunch. Everyone gets a kick out of it. But it’s a really good truck stop. The place is called Johnson’s Corner. It was just like any other highway truck stop until 1998 when Travel and Leisure Magazine rated it one of the top 10 breakfast spots in the world. The cinnamon rolls alone are worth the trip. We typically turn it into a full day by visiting a nursery down the road to pickup flowers to start our Spring planting.

This year, we had to change plans. We had a very large Spring snowstorm on Mother’s Day – not uncommon in Colorado. We battled the snow to go to Johnson’s Corner. But the nursery was out of the question. Instead, my wife lead a family trip down to IKEA. I hadn’t been to IKEA for ages. A new one was built in the Denver metro area a few years back. This place has a 3-story parking garage and is simply massive. Lots of folks had the same idea on a snowy Mother’s Day – the place was mobbed.

We picked up a few odds and ends there. We didn’t have much in the way of assembly. But as I observe people load one large box after another into their SUVs, I was reminded of the IKEA Effect. Shankar Vedantam, from NPR and “Hidden Brain” fame, did a story on the IKEA Effect. The theory is that the more you invest of yourself in something – time, money and emotions –the greater the value you place on it. The link to IKEA is that you become more invested in IKEA furniture than a fully built piece of furniture because you invested effort putting the IKEA piece together.

IKEA Effect“IKEA Effect” is a clever name. But the concept of Not Invented Here has been around for a very long time in business. Some business owners and executives believe that if their business hasn’t developed a concept, process or system, it isn’t good enough for them. It’s true that a business can develop systems or processes that are perfect fits for their business. And, that a third-party process or system will need to be customized. But at what cost?

This kind of thinking also leads to the Sunk Cost Effect. Once a business has sunk tens or hundreds of thousands of dollars into a project, well, you just have to get some kind of return out of it. This is understandable at this level of investment. But how do you prevent getting into this situation?

The way around this is to utilize third party, objective advisors and to fail early. Before you get too emotionally invested in your project, it’s wise to get significant objective review and input from someone with expertise in the area you are working on. Or, better yet, get advice from other business owners. As one TAB member recently said, only fellow business owners understand the “intricacy of the decision making” that you are going through. If you do receive feedback that, well, your baby isn’t as pretty as you think, don’t be afraid to stop the project early. Letting a bad decision or program drag on is only going to make it that much harder when you need to make the inevitable decision.

 

 

Read our 19 Reasons You Need a Business Owner Advisory Board

DOWNLOAD

Written by The Alternative Board

Related posts

How to Prepare Your Clients for a Price Increase
Sep. 3, 2020 | Posted by The Alternative Board
Every business must, at one point or another, share what’s viewed by customers as “unwelcome” news—the need for a price increase for products or services. Some businesses simply set the wheels in...
How TAB Helped A Member Grow During COVID-19
Sep. 1, 2020 | Posted by Phil Spensieri
Since the start of the COVID-19 pandemic, many businesses have struggled to survive. But for some, the pandemic has provided an opportunity to thrive. Garden Connections is one of those businesses. ...
The best piece of business advice I have ever received is…
Aug. 28, 2020 | Posted by The Alternative Board
When you’re a business owner, your best lessons often come from two places: failure or wise words from owners who have been there. There are going to be inevitable ups and downs in every enterprise....
10 Creative and Often Overlooked Ways to Find Hidden Money in Your Business
Jul. 16, 2020 | Posted by The Alternative Board
With the strains of rolling shutdowns across the country, many businesses are finding their profits diminished or uncertain. Many leaders are relying on tried and true revenue generating strategies...
9 Tips to Help Create a Living Company Culture in a Virtual Workplace
Jun. 26, 2020 | Posted by The Alternative Board
As businesses around the world have gone virtual, digital tools have helped keep most aspects of our work life functioning. Many businesses are reporting increases in productivity, with activities...
How to Improve Diversity in the Workplace
Jun. 9, 2020 | Posted by The Alternative Board
The U.S. is going through some challenging times right now, but a growing awareness of the value of diversity in business may prove to be of long-lasting value for us all. Though the future is...
Time for a Closer Look – Assess Your Business Practices For The New Normal
Jun. 3, 2020 | Posted by Phil Spensieri
For most, if not all, business owners COVID-19 has proven to be their biggest challenge yet. During the last couple of months, I’ve witnessed, firsthand, the resilience of many business owners...
Help Customers Stay Connected and Loyal to Your Business
May. 20, 2020 | Posted by The Alternative Board
Small businesses have always been challenged to attract and retain a loyal customer base. This challenge has been intensified a thousand times over because of the Coronavirus outbreak. Whatever their...
Ready To Reopen Your Business? Here Are 3 Questions to Consider
May. 5, 2020 | Posted by Phil Spensieri
As business owners, we’ve been waiting to receive the much anticipated “green light” to go back to work. As this day inches closer, you’ll need to devise a plan that addresses how your business will...
How to Reinvent Your Business from the Inside-Out
Apr. 30, 2020 | Posted by The Alternative Board
In so-called ordinary times, many businesses experience the need to reinvent themselves to meet changing customer demands. Today, months into the COVID-19 outbreak, the “reinvention challenge” is...