Tim Brown recently posted his thoughts on how The LEGO Movie is an example of creative leadership. I agree, but not only for the reasons that he lays out in his post.
The LEGO Movie is the result of a long, painful but very successful restructuring of the company, one that began during the company’s crisis in 2003. Convinced that the brick was passé and would soon be replaced by video games and other digital play experiences, LEGO experimented with all kinds of out-of-the-box play experiences between 1999 and 2002. The result was a crisis and near bankruptcy in 2003. To recover, LEGO went back to the brick, but also went back to their customers to understand how they used the company’s products.
With the help of outside consulting firms such as ReD Associates, LEGO applied many of the disciplines of Design Thinking to understand who played with their products and how they played with them. They watched kids play, not just with LEGO but with all their toys. They looked at how their most extreme customers – both LEGO-crazed kids and adults – played with their toys, and also how they were perceived by their peers. They learned many things, but chief among them were:
- Kids often didn’t play LEGO alone. They like playing with others.
- Competition was a big part of children’s play, especially for boys.
- Kids loved the stories around some of the LEGO toys, especially Bionicle and LEGO Star Wars. Telling these stories through virtual play (such as the very popular LEGO Star Wars video games) didn’t make kids want fewer bricks; it made them want more!
In short, LEGO learned that it couldn’t compete on just the brick alone – it had to offer more. If all LEGO offered was a box of bricks, there were a dozen other companies out there who would copy that and sell it for cheaper. But LEGO also couldn’t leave the brick behind – the brick had to be at the core of their experience. So the company became very adept at developing not just boxes of bricks, but boxes of bricks with stories and games attached to them. That expansion of the play experience hasn’t been easy to achieve, but LEGO has restructured its internal roles, process, structure, and reward systems to ensure that the different parts of the company work well together and deliver all the parts of an integrated play experience in a tightly coordinated and consistent way. And the result has been six years of 23% annual sales growth, and 38% annual profit growth.
And we’re seeing this continue with the LEGO movie. LEGO didn’t just work with the movie’s producer and director to deliver a great movie. There were also over a dozen sets in the stores, books, Happy Meal toys at McDonalds, licensed merchandise, and even a partnership with Google called BuildWithChrome that lets fans construct buildings with virtual bricks and place them anywhere on Google’s maps. This has been a very successful strategy, so it’s likely we’ll see LEGO’s growth rate continue for at least another few years.