Tuesday, November 26, 2013

Lego group has something to teach



The book Brick by Brick: How LEGO rewrote the rules of innovation and conquered the global toy industry is an interesting read of how a company moved from almost failure to an innovative success story.  David Robertson does an effective job of presenting  avery fascinating story although a don't consider this a great management book. It is not much different from others in the field because it does not seem to give a good sense of the tension inside the company and it moved through the process of becoming more innovative. These issues are never easy. There is failure and internal fighting. How is this company able to get beyond its past? Every companies wants to be innovative and creative but so many fail, why?

The story of Lego is still very fascinating. This is an innovative company which follows some simple rules which could be applied to many businesses. There are seven rules that describe Lego, which are what many companies have tried to follow to different degree.

  • Hire diverse and creative people 
  • Head for blue-ocean markets
  • Be customer driven
  • Practice disruptive innovation
  • Foster open innovation - heed the wisdom of the crowd
  • Explore the full spectrum
  • Build an innovative culture

I will not go through all of the key strategy but to say that all of these strategies are not easy to implement. Take the simple idea of hiring creative and diverse employees. Try and find them and include them in your existing culture. This is expensive and prone to failure. Head for blue-ocean markets. This requires a high fixed cost and potential failure. Be customer drive. Who isn't, yet do you listen to everyone? Clearly, you need innovative management. Can that only occur in a private company? 

What makes Lego different is that it executed on all of these key principles and have embodied these key strategies in their thinking. Few have been able to incorporate more than one of the key rules of current business strategy. They did this one brick at a time. 

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