Brick by brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry - BusinessNews Publishing (2014)

Preface

I first approached the LEGO Group in 2007 while studying innovation efforts at companies in the United States and Europe. I’d surveyed fifty-six companies to understand their innovation management practices and planned to write a book about innovation and leadership, where I’d draw lessons and stories from many organizations and use those cases to illustrate how companies should manage innovation. After visiting LEGO, I wrote a case study that I hoped to use both in the classroom at the Swiss business school IMD and, later, in my book.

When I first taught my case study of LEGO at IMD in 2008 and 2009, I was taken aback by the outpouring of enthusiasm for the brand and its capacity to reawaken the sense of experimentation and play that resides within everyone. Subsequent interviews uncovered one fascinating aspect of the LEGO story after another. I realized that the LEGO management team had done more than just turn around the company; they had fundamentally rethought what “innovation” meant and how it should be managed and, by doing so, had rescued the company and boosted its performance to new heights. I saw that this case study was much more than a chapter in a book about innovation management—it was a full book’s worth of stories and lessons: about a toy that touched the lives of millions around the globe for close to a century; about a much-beloved company that lost touch with its customers and its history and almost went out of business as a result; and about managers whose love for the company and perseverance saved it from ruin. What started as an academic book about innovation management became a much richer narrative of failure and recovery.

Since 2008 I’ve made more than a dozen trips to LEGO headquarters in Billund, Denmark (I highly recommend a June visit over one in January), where I’ve interviewed dozens of senior managers; sat in the bright white rooms of the Idea House and heard designers describe how they dream up new toys; pored over sketches and computer-generated designs that traced the evolution of some of the company’s most compelling kits; visited the sprawling, noisy factories where millions of tons of plastic are molded into billions of bricks; and had a memorable meeting with Kjeld Kirk Kristiansen, a grandson of the company’s founder and its chief executive for twenty-five years.

My trip around LEGO world also took me to FIRST LEGO League competitions in the United States and Switzerland, where I watched my son’s teams compete against hundreds of other kids in frenzied robotics tournaments. In Fort Lee, New Jersey, I followed a team of LEGO designers and anthropologists as they tested their ideas for the next generation of kits with the world’s most fickle, demanding consumers—nine- and ten-year-old boys. In a suburb of Chicago, Illinois, I met Adam Reed Tucker, who not only built a replica of architect Frank Lloyd Wright’s iconic Fallingwater house entirely out of bricks, but transformed the replica into a kit and commercialized it through LEGO. In West Lafayette, Indiana, I met Steve Hassenplug, one of the greatest Mindstorms builders on the planet. And I traveled to Boulder, Colorado, where I met with some of the best game programmers and designers in the United States, who turned millions of lines of software code into the virtual worlds that constituted LEGO Universe.

At every turn, the company’s leaders, employees, partners, and fans were remarkably candid about the mistakes that fueled its downfall, as well as the false starts and dead ends that accompanied its turnaround. Over its eighty-plus years, and particularly during the past decade, the LEGO Group has proven itself to be as resilient as its virtually indestructible bricks and as resourceful as the nine-year-olds who bring them to life.

Along the way I met dozens of LEGO employees, partners, and fans who were consistently friendly, smart, thoughtful, and generous with their time. I would like to thank Henrik Weis Aalbaek, Henrik Andersen, Tormod Askildsen, Phil Atencio, Erich Bach, Zev Barsky, Jamie Berard, Torsten Bjorn, Karsten Juel Bunch, Steve Canvin, Dan Elggren, Peter Espersen, Greg Farshtey, Helle Friberg, Ulrik Gernow, John Hansen, Mark Hansen, Lena Dixon Hjoland, Søren Holm, Cephas Howard, Niels Sandahl Jakobsen, Birthe Jensen, Jacob Kragh, Kjeld Kirk Kristiansen, Jens Lambak, Allan Steen Larsen, Kim Yde Larson, Soren Torp Laursen, Erik Legernes, Henrik Taudorf Lorenzen, Søren Lund, Phil McCormick, Sine Moller, Jai Mukherjee, Gitte Nipper, Mads Nipper, Henrik Nonnemann, Lars Nyengaard, Jette Orduna, Fleming Østergaard, Lisbeth Pallesen, Niels Milan Pedersen, Christoffer Raundahl, Jan Ryan, John Sahlertz, Ronny Scherer, Poul Schou, Chris Sherland, Mark Stafford, Robert Stecher, Bjarne Tveskov, and Jill Wilfort from LEGO; Jesper Ovesen and Henrik Poulsen from TDC; Howard Roffman from Lucasfilm; Mitch Resnick from the MIT Media Lab; Jonathan Smith and Tom Stone from TT Games; Christian Faber from Advance; Scott Brown, Peter Grundy, and Ryan Seabury from NetDevil; and Peter Eio, Steve Hassenplug, Bill Hoover, Jake McKee, Megan Nerz, Poul Plougmann, Robert Rasmussen, Megan Rothrock, and Adam Reed Tucker.

Per Hjuler and Paal Smith-Meyer, my collaborators on earlier work on the LEGO story, have been invaluable in understanding the culture and practices at LEGO. This book builds on the insights that they provided. Cynthia Day, Duff McDonald, and Michael Watkins offered encouragement and feedback along the way—I am grateful to you all.

Within LEGO, Jan Christensen from the PR group and Jørgen Vig Knudstorp, the CEO, have been unfailingly supportive at every phase in this book’s development. Both were always able to find time to help and to answer questions. Without their support this book would not have happened.

Thanks to Mary Choteborsky, my editor at Crown Business. Mary was consistently positive, helpful, and insightful. Her push to bring out the lessons in the LEGO story has made this a substantially better book.

Three final thank-yous. First, to Bill Breen, the writer who helped create this book. Bill participated in most of the interviews and contributed to the development of many of the core ideas in the book; his clear, powerful voice is on every page. A special thank-you also to Carol Franco, my agent and friend. I hope this is only the first book in a longer collaboration. And, finally, to Anne, who had to endure the emotional ups and downs, the financial sacrifices, and the constant absence of her husband. Thanks for all your love and support.

You hold in your hand the result of five years of study and thinking about LEGO. By telling the story of the company’s near death, remarkable rebirth, and stunning recent success, I hope you will find examples that will guide you in your efforts to improve your company’s innovation. I have tried to pull together the lessons from the company’s recent successes and failures so that you can build a better future for yourself and your company, brick by brick.