Unless you’re a parent who’s unintentionally stood on a brick in the middle of the night, you probably have a really fond view of Lego. Indeed, unlike many of the toys of our youth, Lego has only gotten cooler with age.
Far beyond being just a toy for kids, Lego has legions of adult devotees (called AFoLs: Adult Fans of Lego), theme parks, and even a burgeoning film franchise.
One person who’s been at the forefront of that upswing is David Gram.
As senior innovation director at the Danish company, he’s headed up a number of multidisciplinary teams across the globe. Together with clever marketing and astute business decisions, the innovations built by those teams have helped turn Lego into the Apple of the toy world.
As Gram explained during the the recent Strategy Execution & Innovation Forum though, none of this would’ve been possible if Lego didn’t have the right people thinking in the right ways.
Many employees, one vision
Lego employs about 19 000 people around the globe. With those kind of numbers, it would be all too easy for different parts of the company to pull in different directions.
In order to prevent that happening, the plastic bricks giant puts a lot of effort into ensuring that all its employees are plugged into the company’s overarching vision.
Fittingly, he uses the humble Lego brick as a metaphor for how the company achieves this.
“It’s not just a physical brick,” he said, “it’s what it stands for, it’s the core DNA of the company”.
“Whatever we do, is part of a bigger system, a bigger mission. A Lego brick is just one brick but put them all together & you make something,” he told the conference audience.
The brick, he added is also a promise to the consumer: “The more products you buy, the more value you get”.
While that vision is obvious to anyone looking at Lego today, it wasn’t always the case.
“Back in the 90s and early 2000s, the company had a strong brand because of the work it did in the 60s,” he said. “But it wasn’t doing well on the business side. Turnover was abysmal, profits were not great.”
Realising that it was missing out on a chance to make full use of the brand, the company decided to innovate its way out of trouble.
Thing is, a lot of those innovations had little to do with the brick at the core of Lego’s DNA.
To say it didn’t work would be a gross understatement: by 2003, the company was almost bankrupt.
As Gram sees it, the problem was twofold: Lego was innovating in too many directions (because it felt like it could) and consumers no longer recognised the brand.
It looked like it was curtains for Lego. But Kjeld Kirk Kristiansen, the then president and CEO of Lego refused to give up.
He put US$400-million of his own money into the company, at the same time insisting that the company return to its roots and focus on “the brick”.
It hasn’t looked back since, growing more than 400% in the last decade or so.
Real life lessons
So, what lessons can other companies learn from what Lego went through?
According to Gram, there are three things you need to get right when it comes to innovation.
The first, he says, is to “really understand your mission, not just as a sentence in the executive hallway, but the very purpose of why the company exists.”
“Beyond the products and services that we’re doing today, what is the long-term effect that we want to have on the world?”
The second is to understand the core DNA of what the company is all about. Among the most important questions a company can ask itself, he says, are: “what is it that we do uniquely well? What is it that we understand?”
Finally, Gram told the audience, every company should create a brand framework that lays out what the brand should and shouldn’t do in the future.
All of that makes innovation much easier. “Now you know who you are, where you’re going, what you want to do,” he said.
Creating the future
At Lego, he told the conference audience, all 19 000 people understand the mission.
They understand that the brick is at the core of what they do and that novelty comes from adding to that DNA rather than moving away from it.
This, he points out, is especially important in a world where technology is advancing more rapidly than ever.
“That also means you don’t have time to wait to invent the future,” he said. “Everybody needs to gear up and become part of creating the future”.
All innovation though must come back to the brick.
Speaking about that mission is one thing, but how did Lego actually go about ensuring that its employees stick to it.
According to Gram, culture plays a part, but it’s easier to change staff behaviour rather than culture.
Part of that behavioural change included collaboration “across the silos, across the different functional areas, because that’s where the change is happening. It doesn’t happen in isolation in the separate business areas.
One way of ensuring that collaboration is to only provide skeleton capabilities for the individual teams, forcing them to look inside and outside the company for any other capabilities they need.
“It’s hard to address culture head-on,” said Gram. In fact, he believes, it’s usually a bad idea, “because you’re telling people that the way that you’re thinking, the way that you’re working, and the way you do good things is not good”.
By looking outside of Lego for expertise, the company’s staff were also forced to drop any ego they might have had.
Moreover, it allowed Lego to grow organically instead of hiring for expertise. And when that happens, growth becomes much less of a threat to culture.
Get this behaviourally-led innovation right, Gram says, and you’ll be able to constantly disrupt yourself without causing organisational panic and anxiety.
Sure there might initially be resistance, he told the audience, but with the right approach you can win everyone over to your side.
“Be a rebel, but be diplomatic,” he told the audience.
“Finally,” he said, “make other people shine. That way, they’ll keep coming back for more.”