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Lego: a renaissance through open innovation

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There are sixty-two LEGO bricks per person in the world. The Danish group's turnover increased by 38% in 2011 to reach 182 million euros. However, LEGO, after experiencing the first loss in its history in 1998, recorded a historic loss of 188 million euros in 2006, less than 6 years ago.

The LEGO Group has managed to turn its situation around by radically changing its innovation policy and its relationship with LEGO users, in particular by moving towards open innovation and crowdsourcing.

Change of brick, change of CEO

In the 1990s, as children became increasingly interested in game consoles, computers, etc., LEGO came very close to bankruptcy. It was at this time that LEGO recruited Jorgen Vig Knudstorp as its new CEO. Knudstorp combined Scandinavian modesty with the American conviction of the importance of making money and surviving in a world controlled by Playstations and iPods.

First of all, Knudstorp will strive to change the culture of the LEGO Group by replacing the number one priority "taking care of children" with "making money for the company". Actions in this direction are for example relocation, removing variations on the LEGO characters, as well as a large part of the non-core activities that had developed in previous years have arrived. Stop diversification, the group is now focusing on profitability and competitiveness.

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Innovation at the heart of the renaissance

The relationship with LEGO users had been neglected during difficult years, which damaged LEGO's image as well as its revenues. The second aspect of Knudstorp's intervention therefore consisted in committing the group to a new innovation policy. In particular, a particularly innovative customer relationship was set up thanks to the creation of a social network dedicated to children and LEGO bricks.

In addition, LEGO became aware at this time of the interest in LEGO among young adults, particularly with regard to the LEGO Mindstorms range, equipped with a set of computer-programmable sensors. This awareness led to a series of decisions

LEGO Ambassadors" are a way of listening to users

In order to improve relations and dialogue with its customers, the LEGO Group has set up the "LEGO Ambassador" program, which consists of choosing some forty ambassadors in some twenty countries around the world from the community of enthusiasts that had naturally developed on the Internet. These ambassadors, representing these communities, are responsible for transmitting information in both directions and are fully integrated into the design of new products.

Changing the image

legoadultsAlways following the awareness of the use of LEGO bricks by young adults, the Danish group has also worked on its image in order to exploit this area of development. The illustration opposite is taken from an advertising campaign that LEGO recently set up in Germany. This campaign is really explicit about LEGO's new positioning on adults (image and baseline). This campaign refers, not without humour, to encrypted films and contrasts with the traditional image of LEGO.

Open innovation and crowdsourcing

With the introduction of LEGO Mindstorms (sensor-equipped and programmable LEGO), savvy users began hacking into the LEGO system to customize and use it in a way that the Danish company had not anticipated. After trying to fight these hackers, LEGO finally realized the potential behind them. LEGO finally let this "forced collaboration" by the users take place. This allowed LEGO to exploit crowdsourcing, i.e. the ability to tap into the creativity and intelligence of a large number of users.

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LEGO has even taken the experience one step further with its LEGO Factory, a free software that can be downloaded from the eponymous website to design your own "toy" and then order it.

From December 2009, LEGO goes even further by considering remunerating the most popular design authors.

In short, the innovation that allowed LEGO to recover from its near-death experience is above all an opening to the outside world.

 Appeared in open-your-innovation.com

 To go further: 

LEGO: rebirth through open innovation and user communities.

The rebirth of LEGO.

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