Originally published on: The Dualarity
Setting the scene. Jørgen Vig Knudstorp was appointed as CEO to the Lego Group in 2004. He discovered that a real business transformation was needed to move the seventy-six-year-old family owned Danish toymaker to put a halt on declining revenue and increased debt, and to change the focus to cash flow.
He said, ‘There’s no single answer to anything anymore.’
What happened? A real multi-level transformation strategy working on multiple fronts. Lego started by answering the questions: why do we exist? What is our purpose? Then it looked at its people, changing the culture by increasing transparency with a looser structure. It created an attitude of ‘blame is not for failure; it is for failing to help or ask for help’, allowing failure to be part of success. Of course, customer experience was part of the solution. Lego created a strategy of niche differentiation, using crowd-ideation and co-creation to leverage the massive Lego community of more than 120,000 volunteer designers. It innovated by building customer experiences for all ages, made accessible through amazing content like the successful Lego Movie, Legolands and colourful Lego stores around the world. It signed some very smart licensing deals for Star Wars and Harry Potter, seeing the importance of storytelling experiences through its offering while giving fans great customer experiences. Jørgen Vig Knudstorp and his team have been able to see and leverage what is available around them to create an engaged global fan base and members, targeting adults and kids with their playful learning toys, experiences and stories ready for an off-line and online digital world.
Outcomes. For the past years, the demand for construction toys, especially Lego’s blocks, has been growing at the expense of other toy manufacturers like Mattel Inc. and Hasbro Inc. In February 2015, Lego replaced Ferrari as Brand Finance’s ‘world’s most powerful brand’. As of July 2015, more than 600 billion Lego parts had been produced. Lego went from mature to healthy and found the Dualarity point to be a pendulum between both – A Dualarity hero business that was able to perform and transform.
The Telegraph article ‘Lego is a better investment than shares and gold’ states the average Lego SET has increased in value 12 percent each year since the turn of the Millennium. As a result, I bought multiple Lego sets that are now kept in my ceiling to be sold in 10 to 15 years from now.
And they announced their new Lego headquarters re-design in Denmark.