I’ve just read this fabulous article in Fast Company which gives us a fascinating insight into the Lego business and how – like Apple – it came back from the brink of bankruptcy and re-invented itself as a Global mega-brand. Here’s some of the key lessons we can all learn from the Lego story.
1 Acquire Deep, First Hand User Insight
What became clear was that Lego lost sight of how kids really play. To remedy this, they embarked on a huge, ongoing insight generation programme using a variety of research approaches where ethnography – observing real life play experiences – had a key role to play They also created alliances with universities and research agencies to get fresh perspectives. Now they know more than anyone about the true nature of play.
Key lesson: never stop learning about your consumers. Use a a variety of approaches to acquire fresh insight
2 Re-define and Stick to Your Core Business
This is an ongoing theme of David Taylor at the Brand Gym who writes about this extensively. The grass is always greener. New markets always look tempting, but it’s so easy to lose sight of what made you successful in the first place. Lego over-invested in ventures such as Legoland, where they had little experience or knowledge of the hospitality or leisure business. Today its entire focus is on creating innovative play experiences.
Key lesson: remember what made you famous. By all means look for new opportunities, but focus primarily on growing your core business
3 Attract New Users
One of the big learnings from Byron Sharp’s book How Brands Grow was that brands are bigger because they have more users. So, having re-focused on their core business, Lego looked to actively seek new users beyond their traditional audience of 5-11 year old boys. 2 key groups they embraced were:
(a) young girls, who they attracted via a new range called Lego Friends which has proved to be hugely successful
(b) AFOLs (Adult Fans of Lego)…I love that phrase…via a range called Lego Architecture
In addition, they’re looking to grow their business in Asia, beyond their heartland of Europe and North America
Key Lesson: be open-minded about targeting. Look to grow by increasing your brand penetration.
4 Develop a Powerful and Creative R & D Resource
The Lego R & D function – Future Lab – is well equipped and highly influential. Also, it’s a very diverse group of people, with a range of backgrounds, skills and experiences. Cutting back on R & D resource may lead to short term cost-saving, but will ultimately starve the organisation of much needed innovation.
Key Lesson: you need an active, eclectic and well – resourced R & D function to ensure you stay future-focused.
5 Engage Your Superfans
People who love your brand are never short of ideas, so it’s great if you can harness their passion and creativity. Indeed the original idea for Lego Architecture came from Adam Reed Tucker, a Chicago architect. Lego has a site called Lego Ideas where fans can submit, review and vote on potential new ideas.
Key Lesson: create opportunities for your fans to suggest ideas and contribute to your success.
6 Test and Learn
innovation inevitably has a high failure rate – it goes with the territory. The issue is that mistakes can be costly and in the past, Lego was guilty of expensive failures, such as Lego Universe. Nowadays, it tests ideas in a more controlled environment, so that it learns as it goes along.
Key Lesson: keep trying new stuff out, but do so on a smaller scale. Absorb the lessons before you invest in a big launch.
7 Embrace the Digital World
For many brands – Lego included – the virtual / digital world can be perceived as a potential threat to the existing business. Lego is currently focusing on is merging virtual with physical play to create a new, hybrid play experiences, something they call Lego Fusion
Key Lesson: embrace opportunities the digital world has to offer. Keep abreast of new technologies and seek out ways to merge the virtual world with the physical.