Every big data study LEGO commissioned drew the exact same conclusions: future generations would lose interest in LEGO. LEGOs would go the way of jackstraws, stickball, blindman’s bluff. So-called Digital Natives – men and women born after 1980, who’d come of age in the Information Era – lacked the time, and the patience, for LEGOs, and would quickly run out of ideas and storylines to build around. Digital Natives would lose their capacity for fantasy and creativity, if they hadn’t already, since computer games were doing most of the work for them. Each LEGO study showed that the generational need for instant gratification was more potent than any building block could ever hope to overcome.
In the face of such a prognosis, it seemed impossible for LEGO to turn things around – but, in fact, the company did. It sold off its theme parks. It continued successful brand alliances with the Harry Potter, Star Wars and Bob the Builder franchises. It reduced the number of products while entering new and underserved global markets.
Still, probably the biggest turnaround in LEGO’s thinking came as the result of an ethnographic visit LEGO marketers paid in early 2004 to the home of an 11-year-old boy in a midsized German city. Their mission? To figure out what really made LEGO stand out. What executives found out that day was that everything they thought they knew, or had been told, about late twentieth- and early twenty-first-century children and their new digital behaviors – including the need for time compression and instantaneous results – was wrong.
In addition to being a LEGO aficionado, the 11-year-old German boy was also a passionate skateboarder. Asked at one point which of his possessions he was the most proud of, he pointed to a pair of beat-up Adidas sneakers with ridges and nooks along one side. Those sneakers were his trophy, he said. They were his gold medal. They were his masterpiece. More than that, they were evidence. Holding them up so everyone in the room could see and admire them, he explained that one side was worn down and abraded at precisely the right ankle. The heels were scuffed and planed in an unmistakable way. The entire look of the sneakers, and the impression they conveyed to the world, was perfect: it signaled to him, to his friends and to the rest of the world that he was one of the best skateboarders in the city.
At that moment, it all came together for the LEGO team. Those theories about time compression and instant gratification? They seemed to be off base. Inspired by what an 11-year-old German boy had told them about an old pair of Adidas sneakers, the team realized that children attain social currency among their peers by playing and achieving a high level of mastery at their chosen skill, whatever that skill happens to be. If the skill is valuable, and worthwhile, they will stick with it until they get it right, never mind how long it takes. For kids, it was all about paying your dues and having something tangible to show for it in the end – in this case, a pair of tumbledown Adidas that most adults would never look at twice.
Until that point, LEGO’s decision making was predicated entirely on reams of big data. Yet ultimately it was a chance observation of a pair of sneakers belonging to a skateboarder and LEGO lover – that helped propel the company’s turnaround. From that point on, LEGO refocused on its core product, and even upped the ante. The company not only re-engineered its bricks back to their normal size, it began adding even more, and smaller, bricks inside their boxes. The bricks in turn became more detailed, the instruction manuals more exacting, the construction challenges more labor-intensive. For users, it seemed, LEGO was all about the summons, the provocation, the mastery, the craftsmanship and, not least, the hard-won experience – a conclusion that complex predictive analytics, despite their remarkable ability to parse “average” scores, had missed.
Cut to ten years later when, during the first half of 2014, in the wake of the worldwide success of The Lego Movie and sales of related merchandise, LEGO’s sales rose 11 percent to exceed $2 billion. For the first time ever, LEGO had surpassed Mattel to become the world’s largest toy maker.
*Source: https://www.linkedin.com/pulse/lego-engineered-remarkable-turnaround-its-business-howd-lindstrom/
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