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Brick by Brick takes you inside the LEGO you've never seen. By following the teams that are inventing some of the world's best-loved toys, it spotlights the company's disciplined approach to harnessing creativity and recounts one of the most remarkable business transformations in recent memory.
Brick by Brick reveals how LEGO failed to keep pace with the revolutionary changes in kids' lives and began sliding into irrelevance. When the company's leaders implemented some of the business world's most widely espoused prescriptions for boosting innovation, they ironically pushed the iconic toymaker to the brink of bankruptcy. The company's near-collapse shows that what works in theory can fail spectacularly in the brutally competitive global economy.
It took a new LEGO management team – faced with the growing rage for electronic toys, few barriers to entry, and ultra-demanding consumers (ten-year old boys) – to reinvent the innovation rule book and transform LEGO into one of the world's most profitable, fastest-growing companies.�
Along the way, Brick by Brick reveals how LEGO:
- Became truly customer-driven by co-creating with kids as well as its passionate adult fans
- Looked beyond products and learned to leverage a full-spectrum approach to innovation
- Opened its innovation process by using both the "wisdom of crowds" and the expertise of elite cliques
- Discovered uncontested, "blue ocean" markets, even as it thrived in brutally competitive red oceans
- Gave its world-class design teams enough space to create and direction to deliver
built a culture where profitable innovation flourishes
Sometimes radical yet always applicable, Brick by Brick abounds with real-world lessons for unleashing breakthrough innovation in your organization, just like LEGO. Whether you're a senior executive looking to make your company grow, an entrepreneur building a startup from scratch, or a fan who wants to instill some of that LEGO magic in your career, you'll learn how to build your own innovation advantage, brick by brick.
- Sales Rank: #73213 in Books
- Published on: 2014-06-24
- Released on: 2014-06-24
- Original language: English
- Number of items: 1
- Dimensions: 8.10" h x .90" w x 5.20" l, .63 pounds
- Binding: Paperback
- 320 pages
Amazon.com Review
Q&A with David Robertson
Q. How did you come to be involved with LEGO?
A. I study the management of innovation and was writing a book on my framework for innovation governance. It was going to be a typical business book, where each chapter was a piece of the framework illustrated with a case study or two from a different company. I had done cases on CarMax, McDonald’s, Best Buy, Mattson, ING DIRECT, and a few other very good companies. But then I visited LEGO and saw not only a company with the most sophisticated innovation management system I’d ever seen, but also a company that had been through an amazing roller coaster ride over the past decade, from near ruin to tremendous success, all because of the way they managed innovation.
Q. At what point did you realize you had uncovered a big story?
A. It was 2008 when I realized that I was onto something. Two things happened at the same time. First, when I taught the case study about the LEGO turnaround in IMD in 2008, I was surprised by the enthusiasm for the brand and the simple joy that the memories evoked. Talking about LEGO for a few hours put the executives I taught into a wonderful mood and at the same time taught them some valuable lessons about innovation management. It was also 2008 when the effects of the company’s changes started to show up in their financial returns. From 2004 to 2007, their financial performance was good, but they were still working out problems in the supply chain and production system. After 2007, their performance began to skyrocket, as they introduced hit toy after hit toy. Those two things together convinced me there was a book to be written about what I was seeing.
Q. What does LEGO’s journey teach business leaders about innovation – perhaps even better than other company examples like Apple and Google?
A. What I like about LEGO is how “inside the box” they are. Too much of the literature on innovation is about the big, industry-changing innovations or about charismatic leaders who drive their companies to new heights. One of LEGO’s managers, Per Hjuler, said to me: “I’m continually humbled by the power of the little idea.” LEGO is successful because they are continually innovating on many different dimensions, but they’re doing it within a fairly traditional business system.
Q. You call Bionicle the toy that saved LEGO, both in terms of financial impact and the lessons the company learned from it about innovation. Can you explain?
A. Bionicle was the toy that saved LEGO, even though it’s always been a controversial toy within the company. There are those in LEGO who still believe it’s not an appropriate toy to carry the LEGO brand. But without the revenues from Bionicle to carry them through the crisis years of 2003 and 2004, the company would not have survived.
But Bionicle also taught LEGO some lessons about how to work with external partners, how to interact with passionate customers, and how to manage an intellectual property. LEGO had seen from its partnership with Star Wars how a rich story can captivate kids and drive sales of toys. But making toys around someone else’s story is a different challenge than creating your own story and characters, and building toys around it. Bionicle boys loved the toy, and loved the T-shirts, books, comics, backpacks, sneakers, and everything else that had a Bionicle image on it. LEGO had to learn how to not only develop a toy with a rich story, but also work with a group of outside partners and bring them along as the story progressed. And by interacting with the fans online, Greg Farshtey, the guy in LEGO responsible for story and character development, could understand where the story was confusing or unclear and fix the issue in the next release.
Q. Another toy that taught LEGO a major lesson was Mindstorms, the programmable robots. What did LEGO learn from this?
A. LEGO took a unique approach when they developed the next generation of Mindstorms NXT – the robotics kit they released in 2006. They opened up their innovation process, but they used the “wisdom of the clique” not the “wisdom of the crowd”. They started with a small group of sophisticated fans and brought them into the development process. As development progressed, they expanded the group steadily. When they had most of the major development decisions completed they opened up the process more, and used a crowd of one hundred fans to help them do the final development and testing. There’s a lot written about the wisdom of the crowd and how powerful it can be, and I completely agree that if used well it can be a very powerful source of ideas. But early in the development process, when there are lots of constraints and tradeoffs, it helps to keep the team small and decision-making structures clear. LEGO learned some valuable lessons from Mindstorms about how to do that well.
Q. In just ten years, LEGO has gone from the brink of bankruptcy to the most valuable toy company in the world. What, in your opinion, was the most dramatic shift from the old LEGO to new?
A. The Company’s brush with bankruptcy gave it a dose of humility that it sorely needed. In the years between 1999 and 2002, the company’s manager made decisions about which toys to launch and which to kill. They proved remarkably bad at that. Mads Nipper, who runs all of product development and marketing, says “there are only two totally honest groups of people in the world: kids and drunks.” Now, when LEGO is looking to develop a toy, they show different concepts to groups of kids, then they do rough mockups of the toys, then more finished versions, and so on until they’re sure they’ve got the toy right. Management’s role has changed from making decisions about which toys to bring to market, to making sure their teams have tested the toys thoroughly.
Review
One of “The Best Books of 2013” -Fortune
One of the “Best Business Books of 2013” –Strategy + Business
"Well told...Mr. Robertson, with the benefit of access to staff at Lego and partner companies, provides unusually detailed reporting of the processes that led to Lego's current hits." -Wall Street Journal
"Robertson uncovers and shares a rare inside exploration of innovation-led transformation at its worst – and best. Any manager can learn from these lessons." -Forbes
“An engaging, surprisingly suspenseful and intimate view of the inner workings, leadership dynamics and decision-making process.” -Success
“Compelling reading.” –Business Standard
"Good storytelling, with considerable insight into Lego's efforts at innovation, including both successes and failures." -Winnipeg Free Press
“A valuable read for any business leader or student, but will also delight those familiar with the beloved toy.” –Publishers Weekly starred review
"A fascinating book. The story of how Lego came perilously close to disaster but then transformed itself into one of the most successful and innovative companies in the world serves both as an inspiration and an object lesson." -Chris Anderson, bestselling author of The Long Tail and Makers
"Brick by Brick�is a fascinating study of an iconic toy company that figured out how to stay relevant in a rapidly changing market by returning to its core values and the guiding principles that made it a success in the first place. A must-read for any executive struggling with change." – Bryce G. Hoffman, journalist and author of American Icon: Alan Mulally and the Fight to Save Ford Motor Company
"In an era filled with so many disheartening stories of corporate failure its refreshing to witness the turn-a-round �success of one we have all grown up with during our childhood and that will �continue for generations to come." –Adam Reed Tucker, LEGO Architectural Artist
“David Robertson and Bill Breen have done a wonderful job explaining brick by brick why Lego is loved around the world and what it took to keep this product at the center of toy industry for so long. Like Disney, Lego’s success can be attributed to their drive for innovation, creativity and persistence. While the bricks are loved by children, Brick by Brick is for any business person wanting to understand what it takes to be great.” –Lee Cockerell, executive vice president (retired and inspired),�Walt Disney World Resort, author, Creating Magic and The Customer Rules
From the Hardcover edition.
About the Author
DAVID C. ROBERTSON joined the faculty of the Wharton School at the University of Pennsylvania in January of 2011, and was the LEGO Professor of Innovation and Technology Management at IMD in Lausanne, Switzerland from 2002 through 2010. �As the LEGO Professor, Robertson was given unique access to the company’s management team, has written two case studies about the company, and is the co-author of a Harvard Business Review piece on LEGO. � At IMD, Robertson was the co-director of the school’s largest executive education program, the Program for Executive Development, and directed programs for Credit Suisse, EMC, HSBC, Skanska, BT, and other leading European companies. For more on Robertson’s background, and to contact him for speaking and consulting engagements, visit www.robertsoninnovation.com.
�
BILL BREEN is a founding member of the team that launched Fast Company, which gained an avid following among businesspeople and won numerous awards, including the National Magazine Award for General Excellence. As senior editor, he edited Fast Company's special issues on design and leadership and wrote many articles on competition, innovation, and personal success. He is the coauthor of The Responsibility Revolution and The Future of Management, which the editors of Amazon.com selected as the best business book of the year. Breen speaks to business audiences on leadership, innovation and sustainability; he has appeared on CNN, Fox, CBS, National Public Radio, and other media outlets. Connect with Bill at bbreen@billbreen.net.
Most helpful customer reviews
50 of 52 people found the following review helpful.
Very Insightful Account on Highly Admirable Company
By R. J. de Jong
Some 4 years ago, while cleaning our children's rooms, my wife dropped a Lego train, and the rarest thing to the utterly robust Lego happened: a little component broke off the train. It turned out to be a critical little part, making the whole train unusable. Having to explain to a 4 year old that his train was broken is nothing to look forward to as a parent, yet buying a whole new train set is unreasonably expensive as well. Our local toy store could not help out, but were kind enough to give us a Lego customer care number to call. Unassumingly we called them, having no expectations really. After all, who were we kidding, 1 component out of the zillion components Lego produces. And after all, we were just one of their millions of customers; why would they care...? We explained them what happened, explained the piece and the train model, they jotted down our name and address, and that was the last we expected to hear from it.
Three weeks later a little envelope arrived. Adressed to my son (4 year olds love getting letters). It was a personalized letter from Lego to him, explaining how sad he must have felt when his mother had dropped the train. Therefore, Lego was glad to provide him with 3 new parts, no costs. And a free membership to the periodic Lego magazine.
My jaws dropped. Not only did Lego totally outperform our expectations, they seemed to defy all logic. In the age of call centers and their associated customer carelessness, automation, mass production, depersonalization and standardization, they managed to do the exact opposite. It made my son and me life time fans of the company.
This book is about how Lego manages to be so exceptional. Not by some wild eccentric leadership fad, but by a disciplined approach in their ways of working. Focused especially on Lego's innovation culture that developed after their near-death at the start of the century, the account stands for much more than innovation. It stands for a company with a soul and a deep-rooted belief that it wants to support children in their desire to explore, build and create. Written in a very pleasant style, it provides an in-depth account on Lego, based on a 5 year extensive study by the author David Robertson. It's highly inspirational, excellently documented and very convincing, and now gets me to understand the question how they managed to do that, which puzzled me since the day we received the spare parts for my son's broken train.
12 of 12 people found the following review helpful.
Interesting parallels between Lego and Apple
By Jeffrey Phillips
There could hardly be a more compelling story than the decline and eventual recovery of LEGO. Anyone who has been a child, or has a child, has experience with this iconic brand. The story contains all the necessary ingredients: hubris, near failure, a dogged recovery, a beloved brand. Actually, after reading Brick by Brick I'm amazed at how many parallels there are with Apple, another noted innovator.
Like Apple, Lego was burning cash and found itself months away from bankruptcy. Lego was forced to make huge changes quickly. Both Apple and Lego fell on hard times by dramatically increasing the range of products with little emphasis on profitability or differentiation. Both brought aboard unlikely executives to lead the recovery. Apple brought back Jobs, and Lego brought in a junior ex-McKinsey consultant with little turn around or leadership experience. Both leaders dramatically reduced product complexity and took a knife to operating costs, returning to profitability before attempting to grow through innovation.
As an innovator, I think Brick by Brick is really a forensic story about the recovery of Lego, and not really a book about innovation per se. In many cases the previous Lego administration got Lego into trouble through unfocused innovation aimed at expanding the idea of what Lego meant to consumers, without bothering to discover real needs or consumer goals. Lego operated on a "push" model and angered customers by changing the meaning of Lego and the products' positioning. The resulting disaster wasn't a failure of innovation, just poor management. After all, as the book points out, Lego didn't understand that only two product lines were profitable, and didn't take into account the fluctuation of the Star Wars branded products based on new movie releases.
As the authors note in the conclusion "the most difficult challenge in business is not to invent an innovative product; it's to build an organization that can continually create innovative products". Time will tell if Lego has learned its lesson, and built a sure foundation of effective processes and controls to sustain profitability while incorporating better customer insight gathering and market reading to identify new trends and opportunities. It's not as though one can choose to be efficient and profitable or choose to be innovative. Both conditions must exist for future success.
Brick by Brick identifies what it calls the Seven Truths of Innovation. They are:
1. Build an innovative culture
2. Become customer driven
3. Explore the full spectrum of innovation
4. Foster Open Innovation
5. Attempt a disruptive innovation
6. Sail for Blue Oceans
7. Leverage diverse and creative people
Arguably, Lego before the downfall violated many of these "rules". Lego was disjointed, run on a country by country basis, and had a fairly homogenous workforce that wasn't customer driven. Plougmann, the former CEO who takes much of the brunt of the near failure of Lego, attempted to create more products in more spaces and to disrupt existing markets, but did so without enough customer feedback, and failed to understand who Lego's customer was - both the retailer and the child. After Knudstorp, the new CEO took over, Lego first focused on efficiency and profitability, cutting almost 50% of the product lines. A new CEO brought in better financial controls. Only then was Lego ready to innovate effectively.
The real story here is that innovation isn't a panacea for a poorly run business. Innovation can accelerate growth and profits of a well-run business but will eventually expose the shortcomings of a business that is too insular, too conservative, too narrowly focused or too poorly managed to maintain growth and differentiation. If you are looking for innovation insights, this may not be the book for you. If you are looking for an interesting forensic tale of a near death experience with a remarkable recovery of an iconic brand, which was supported through innovation, this is an excellent book.
4 of 5 people found the following review helpful.
Perhaps on of the most complete discussions of a company journey its ups and downs
By Mark P. McDonald
This is an honest look at one of a company creating one of the best know products in the world. Most business books are filled with hyperbole, god like executives and laser like decision making that make the company look like an unstoppable firm only to crash and burn. Brick by brick is an honest, highly readable narrative of the challenges, ups, downs and decisions of a well run company.
HIGHLY RECOMMENDED both as a good read and a great business book.
Robertson does more than report on what happened to Lego, he explores the context, culture and options they faced. The positive and negative decisions are equally treated in this compelling book. We all know LEGO the brick but few of us know LEGO the company and how it operates.
Every book written about a company should be as balanced, complete and clear as this one. It stands as an example of what compelling business writing can be, one that attracts both business students as well as the public.
It is one of the best books I have read in a long time and perhaps one of the best books focusing on a specific company ever.
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