Innovation Speaker David Robertson: LEGO’s Innovative Path to Success



all right so there's this kind of weird variation on the church collection plate going around here I'll get to the ducks in a minute but what we're gonna do is we're going to talk about Lego and I wrote a book about Lego I didn't mean to I was going to write a book about innovation and innovation management it was gonna be kind of a typical boring business book where every chapter was a piece of the framework and then there was an example of a company to illustrate that framework and at the end it builds to that thrilling conclusion and I'd done a couple of case studies of companies and then I saw Lego and I saw this amazing story of a company that had because of the way it thought about innovation had gone through some incredible ups and downs they double the size of the company every five years for 15 years they introduced new themes you know pirates and Wild West and trains they go into North America they do tremendously well for 15 years and then the string runs out this is Legos sales during the mid 90s from 94 to 98 and there's kind of a natural end to that growth period right I mean just just like we're hearing from Mitchell right there's a there's a natural flow of things but then the world changes and what worked before doesn't work anymore but Lego kept kind of coming back to that you know let's do the same thing but let's do more of it and so I actually got the catalogs I counted the number of new toys that they introduced between 94 and 98 and they introduced a hundred and nine new kits in 1994 they introduced 347 in 1998 more than tripling the number of new kits but sales didn't go anywhere what do you think happened to costs right so what happened to profits they ended up having their first loss in company history in 1998 but mods nipper the head of all of product development and marketing called his 600 people together into two sets of meetings and held up a firetruck and and this is his slide I got a slide from him and he said this is where we started to go wrong this is our fire truck from 1997 wasn't very good but this is where we hit bottom this isn't a fire truck you know it's a spaceship we will never do something like this again this is who we are and this fire truck this kid's 72 39 I think it's the most important toy in Legos history because what it showed to Lego internally was how much could be done under very limited constraints half the number of pieces you couldn't invent the future of play you had to be focused on a great police station of firetruck and when they challenged the team to do that the team responded and the market responded this this firetruck was incredibly popular which brings us back to the Ducks think about this exercise right you had one minute six pieces to build a duck that is about the most constrained creative challenge we could possibly think of and look at what you came up with look at the variety look at the creativity I mean some of these are more duck-like than others but there's some amazing possibilities here that even under the most constrained innovation challenge I could possibly think of that what you've created is incredible in terms of the range and creativity the results that we got and that's what Lego learned that was one of the first light lessons Lego learned is that to deliver what the customer cared about that creative construction experience involved focusing and directing the efforts of its people toward that core experience that Lego wanted that that fire truck that police station under very tight constraints and so you know Lego through these toys and many others learn this lesson that it's not enough to just offer another box of bricks it's not enough to just do the same thing better each year it's necessary but it's not sufficient to be successful in the market that in fact that is just innovating inside the box and that worked for a while for Lego what it wasn't enough but if that isn't enough you can't leave the box right you can't do that experimentation you can't just folk on disruption you know Lego is still looking at what is the next big thing how do we reinvent the future of play but the core of Lego is still innovating around the box and that's what's really been successful for them you

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