July 15, 2013

Staff Picks: Brick by Brick, or How LEGO Was Awesome, Failed, and Then Became Awesome Again

By: Michael @ 11:15 AM – Filed under: Innovation & Creativity

We have reached a point in time when those of us who missed out on playing with LEGOs as kids have by now had the opportunity to buy the iconic toys for our own children. I am fortunate enough to have experienced the joy of LEGO both as a child and an adult, so my interest in David C. Robertson’s Brick by Brick is all but automatic. Simply from an historical perspective, Brick by Brick is alluring. LEGO is such a ubiquitous brand that the company’s fundamental eponymous product offering—the LEGO brick (originally the Automatic Binding Brick), is now genericized both in name and form. As Robertson says, “If you Google ‘fake LEGO’, you’ll get more than sixteen million results.” Brick by Brick does, of course, deliver more than simply the historical narrative of Lego’s growth, recession, and renaissance: the book provides valuable insights into sustainable innovation.  Robertson shares LEGO’s six “founding principles” that have guided the company’s course over the majority of its 80-plus-year history. Some of these are simply inspiring due to their common-sense simplicity, such as the first principle: Values are Priceless. This colors every corner of the organization, and when I read about this founding principle in the book, I immediately thought of Luka Apps and his quest for a replacement Ninjago figure. You might say LEGO has a killer marketing strategy here, but you might also simply conclude that LEGO’s values are excellent. Other founding principles are strategic, like the third: Not a product, but a system. LEGO’s focus on creating more than a simple line of products has allowed for not just enormous proliferation of its product line, but also ultimate backward compatibility. Any LEGO brick made after January 1958 is still compatible with bricks being made today. Robertson spends a healthy chunk of pages on delineating LEGO’s quick and frightening brush with bankruptcy, underlining a number of contributing factors rooted in poor tracking of profit and loss and a general absence of centralized direction across the company’s global entities. He prefaces this downfall narrative with a description of LEGO’s unofficial "seven truths"—another set of guiding principles by which the company operated at the time (though, as Robertson points out, LEGO never explicitly called these innovation strategies the “seven truths”). One by one, LEGO failed to successfully adhere to the seven truths, and each failure was manifest by a significant product flop or strategic shortfall. Many of these—like LEGO’s Galidor TV show and its sister product line—are cases in which success was within reach, but the failure that occurred was incredibly costly to the company. Every one of LEGO’s steps down toward bankruptcy is a lesson for companies today. The majority of Brick by Brick is occupied with Robertson’s retelling of LEGO’s comeback. Each chapter in this section is dedicated to one of the "seven truths", and each chapter provides instances in which LEGO is bringing their seven truths of innovation more in line with the original six founding principles that Robertson discusses earlier in the book. LEGO, while attempting to innovate relentlessly (which it certainly did), had ended up far adrift from its founding principles. Beginning in 2004, the company’s re-alignment meant a dramatic return of focus to the ‘system’ and ‘customer-driven’ principles. Spurred by a sudden awareness of a changing landscape (i.e. the rapidly-growing popularity of digital toys), LEGO had tried to leap far into the future of toys, but in doing so it ended up producing products that could barely be identified with the iconic brand.

The Modern LEGO City Fire Truck

The Modern LEGO City Fire Truck

Robertson uses three fire trucks as an example. In 1997, the LEGO City fire truck was behind the times—it was unmistakably LEGO, but it was clunky and a bit inauthentic. In 2001, the updated “Jack Stone” fire truck lost the iconic look and feel. But by 2004, the company’s designers figured out how to keep the look and feel of LEGO, but also produce a toy that feels fresh and—more importantly—authentic. Even the current LEGO fire truck is very detailed and authentic, yet distinctly LEGO—you can’t mistake it for anything else. LEGO’s story is riveting, and Robertson’s narrative is exceptionally educational. If you were to look at LEGO today, it would be easy to think that the company has simply been on upward trend since its birth. The LEGO brick that we know today was first released in 1958, and at this point LEGO is still innovating inside of that original system. Few, if any, product lines can boast that kind of backward compatibility. The seven truths of innovation are great rules to operate and innovate by, but LEGO’s story proves that it innovation isn’t easy or automatically successful. Even great ideas can fail if they’re not built right.


About Michael

Michael Jantz oversees “special projects,” a task that corrals any number of imaginable alterations and re-imaginings of the umpteen books 800-CEO-READ so gracefully sells day after day. But never content with the appellations of the common workplace, Michael also now enjoys exploring other avenues of 800-CEO-READ’s enterprise, including reading, writing, design, and lively conversations with those writers whose books the company sells. It is a happy time for Michael, whose love of books and good company has found 800-CEO-READ's office and philosophy to be like nutrient-rich compost to his hungry, burrowing roots.