I am a big LEGO fan, and finding someone who isn’t charmed by its iconic mini figures and beautiful building sets is getting harder every day. This increasing popularity is kind of odd – one would think that a company selling bricks would be long obsolete by now. We’re living in a world where children are increasingly growing up playing games on iPad, and where the appeal of physical toys is losing appeal every day. Yet, LEGO seems to be unaffected by this digitalization.
The truth is somewhat different. In fact, by 2013, LEGO was heavily impacted by the changing landscape and got into big trouble. After posting profit after profit since its founding in 1932, LEGO was now faced with US$800 million of debt, and 30% year-on-year sale droppings since 1998. It was clear that LEGO needed change. To help address the crisis, LEGO hired consultants to help turn the company around. Their advice: LEGO needed to diversify – the brick had been around since the 1950s, and it had become obsolete. LEGO took the advice – it started its own video games company, opened theme parks, introduced jewelry for girls and started selling LEGO clothes. This turned things from bad to worse, and the company almost went bust.
Fast-forward to 2022. With a brand value of nearly US$8.6 billion, LEGO is now the world’s most valuable and strongest toy brand. It has an exceptional Brand Strength Index (BSI) score of 90.6 and a corresponding brand rating of AAA+. This exceptional turnaround has been hailed as one of the greatest turnarounds in corporate history. If “moving with the times” didn’t do the trick, then what did?
While LEGO’s revival is a story of many changes, 3 changes in particular are hailed as the most impactful changes leading to its turnaround.
First, LEGO refocused on the brick, and dropped every side-product.
Second, they sharpened focus even more by slashing the inventory, halving the number of individual LEGO pieces.
Third, – and this is what I want to focus on in this blog post – it went all-in on interaction with LEGO’s fans, including the crowdsourcing of products – something previously considered verboten. To make this tangible, LEGO launched its LEGO Ideas website to solicit new products from fans worldwide. Originators of winning ideas would get 1% of their product’s net sales.
Fans as A Driving Force
With LEGO Ideas – which is still going strong to this day – LEGO effectively opened up its design department to the whole world, turning the entire LEGO fanbase into its creative pool. So far, 30 LEGO sets that originated on the LEGO Ideas platform were released as official LEGO sets.
For those not familiar with LEGO Ideas: it follows a fairly simple, community-driven process of idea submission and review.
Phase 1 – Idea Submission
“Got a great idea for a LEGO set? Share it with us!”. That is the message LEGO sends with its open LEGO Ideas platform. Submitting an idea is as simple as describing the idea, and uploading a sample model that demonstrates the concept. As soon as the idea is submitted, it is shared with the entire community.
This allowing of free and open sharing of ideas doesn’t just allow LEGO to identify where fans’ interests lie, it also immediately provides LEGO with with a detailed concept addressing the interest. On top of that, the open nature of the platform allows cross-pollination to occur. Fans see each others’ contributions which, in turn, inspires them to come up with even more ideas.
Phase 2 – User Voting
As soon as an idea is published, the entire community can vote on the ideas it likes best. When certain thresholds are met, the idea is sent to the LEGO Ideas review team. This review team then rates the concept based on how well it suits the LEGO brand, and whether it complies with the community and product rules.
Allowing the community to vote is a clever way for LEGO to quickly identify how much support a concept has, ultimately giving a first indication of its sales potential. On top of that, it serves as a system of instant gratification towards the idea submitters. Even if a submitter’s idea doesn’t make it into a final product, he/she has been able to show the idea to the world, and enjoy immediate feedback from fellow LEGO fans. This in itself strengthens the community and engages submitters to come back and try other ideas.
Phase 3 – Review
All eligible projects are collectively reviewed in the order of whichever projects hit the supporters threshold within the given deadlines. When an idea is rejected, LEGO provides clear, publicly visible feedback on why the idea was rejected. Over the years, LEGO Ideas has refined its submission standards to increase the rates of relevant submissions.
By transparently reviewing the ideas and circling back to the community, LEGO effectively opens a communications channel allowing fans to better understand what the LEGO brand is about and what qualifies as a LEGO product, and why. This creates an ever-learning community of people who, over time, will understand LEGO’s brand so well that they become a spiritual member of the LEGO creator family.
Phase 4 – Production
Once a concept is cleared for production, it is further developed by LEGO set designers and the final model gets released as an official set under the “LEGO Ideas” banner. Users that have their concepts produced receive ten copies of the final set, as well as a 1% royalty of the product’s net sales and credit and bio in set materials as the LEGO Ideas set creator.
In 2020, a record 61 projects qualified for review. Lego cited the sudden increase in projects surpassing the vote threshold was likely due to the global lockdown amidst the COVID-19 pandemic.
LEGO Ideas isn’t only an important part of LEGO’s revival, it is also a driving force that helped turn the brand into a phenomenon. And while consumer-driven innovation doesn’t apply to all businesses, there’s countless businesses that seem to forget that their employees are consumers too.
Collaborative Innovation is an important part in staying in tune with your customers, and to make them part of the solution. And as LEGO’s story illustrates, it’s not always about the big, disruptive stuff. Often it’s just a matter of focussing on less, and making sure that focus is sharpened by the insights from the best consultants you can hire: the people connecting with your company each day.