How and why the phoenix became the unofficial bird of the LEGO Group
The family-owned LEGO Group is among several once great companies that deteriorated almost to the point of self-destruction. Then in 2004, led by Jørgen Vig Knudstorp and his leadership team, it was transformed – “brick by brick” – into one of the world’s most innovative as well as most profitable and fastest growing toy companies, in ways and to an extent once thought impossible. In this book, written by David Robertson with Bill Breen, the focus is on two processes: the deterioration of the LEGO Group and then its subsequent transformation.
As Robertson explains, “a new leadership team pulled off one of the most successful business transformations in recent memory. One by one, LEGO reinvented those academic prescriptions for innovation, synthesized them into a world-class management system, and reemerged as a powerful, serial innovator. LEGO built the world’s first line of buildable action figures, fueled by a riveting story lined that played out over a nine-year span. It launched a line that included an `intelligent brick,’ allowing kids (as well as many skilled adults) to build programmable LEGO robots. In another first, LEGO rolled out a series of board games that could be built, broken apart, and rebuilt.”
Moreover, “LEGO opened up its development process, enabling legions of fans to go online and post their own customized DIY LEGO sets. And it reimagined its core lines of classic LEGO sets, keeping them real while making them modern enough for twenty-first century kids.”
These are among the dozens of business subjects of special interest and value to me, also listed to indicate the scope of Robertson’s coverage.
o Transforming LEGO (Pages 5-9)
o First Principle: Values Are Priceless (14-18)
o Second Principle: Relentless Experimentation Begets Breakthrough Innovation (18-21)
o Third Principle: Not a Product but a System (21-24)
o Fourth Principle: Tighter Focus Leads to More Profitable Innovation (24-26)
o Fifth Principle: Make It Authentic (26-28)
o Sixth Principle: First the Stores, Then the Kids (28-37)
o Seven Truths of Innovation (46-62)
o The Scattered Remains of Runaway Innovation (63-71)
o Real-World Answers to Three Tough Questions (98-102)
o Face-to-Face with Customers (130-134)
o Four New and Better Innovation Initiatives (165-176)
o Exploiting the Wisdom of the Clique (185-200)
o Three Lessons in Crowdsourcing, Sourced from LEGO (211-214)
o An Innovation That Might Well Disrupt LEGO (232-237)
o The Rebirth of a New Brand (281-286)
There are valuable lessons to be learned from the two processes of deterioration and transformation through which the LEGO Group proceeded and these lessons are relevant to almost any organization, whatever their size and nature may be. They include: hire slowly and select only diverse and creative people; locate or create and then dominate “blue-ocean” markets, those in which there is less competition; be customer-driven; practice disruptive innovation; foster open innovation – heed the wisdom of various “crowds” of constituents; explore the full spectrum of innovation, such as a portfolio of complementary products with new pricing plans; and build and then sustain an innovation culture.
It seems appropriate to conclude this brief commentary with remarks David Robertson selected when concluding Brick by Brick: “Although there’s much to take from the LEGO Group’s resurgence, there’d also much to avoid. We’ve met many executives who want to emulate the company’s success but fail to consider the trauma that forced the turnaround. Our advice to them is always the same: don’t wait for a crisis to spur a drive for deep, systemic change. While hurtling through bankruptcy, as LEGO did in 2003, focuses the mind, it’s not necessary and it’s certainly not desirable. Continuous innovation must be a product of an organization’s capacity to learn and adapt.”