Innovation Hub: How Lego Built a Blockbuster Global Brand

7/25/14Follow @IHubRadio

What products count as innovative? Often, the things we take most for granted.

Like Legos. A toy that was started by a failing carpenter in the 1940s, suffered a near-death experience several years ago, and is now experiencing blockbuster growth.

So, how did the company manage to stay afloat through a half-century of changing tastes and technologies? By sticking to its core and creating narratives, says David Robertson, a professor at Wharton and author of Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry.

I asked Robertson about Lego’s struggle to build its brand.

[This interview has been edited and condensed. For audio of the full conversation, visit innovationhub.org.]

Kara Miller: About a decade ago, Lego really ran into some problems. What happened to the company?

David Robertson: The genesis of the problems started in the late ’90s. Lego was convinced, as a lot of companies were, that they were being disrupted by the virtual and digital. They thought they, and all of the other traditional toys, were going to be left behind. So they challenged their designers to come up with the next great play experience—to think “outside the brick.” Most of their ideas failed, and they were close to bankruptcy in 2003.

KM: It sounds like they were trying to be creative and innovative. Why did things fall apart in such a serious way?

DR: It’s actually a really interesting example of how to respond to disruption. Lego was convinced that they had to adopt the new technologies that were changing the market. But what they learned, almost by accident, is that they didn’t need to respond that way. They had to adopt the technology, but, more importantly, to not leave the core behind.

KM: So what clicked for Lego? How did they manage to stay true to the product?

DR: If all you offer is a box of bricks, you’re going to be out of business pretty quickly. Someone is going to do it cheaper, faster, better than you. You have to tell a story. You have to grab attention. And Lego realized this. They wanted kids to be caught up in the story. They decided to license things like Teenage Mutant Ninja Turtles and The Simpsons because they want to tell stories around their bricks. It leads to a cycle where the more toys you get, the more stories kids are able to make up on their own. The latest example we’re seeing of that, the Lego Movie, is just the next evolution.

KM: What about the broader innovation culture of the company?

DR: They are not the hero approach to innovation. The way Apple is written about is Steve Jobs at the top, demanding insanely great products and getting involved in every step of the process. Lego explicitly doesn’t work that way. They have created a system where there are lots of Steve Jobs spread throughout the company. That’s a real accomplishment.

Oliver Lazarus contributed to this report.

Kara Miller is the host of “Innovation Hub,” a national radio program that features the thinkers, researchers, and visionaries who are crafting the future. She is based at WGBH Radio in Boston. Follow @IHubRadio

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