Lego Innovation

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Innovation at LEGO

Overview

LEGO is a leading company in the toy-making industry and the sixth-largest enterprise in the field. The the word “lego” is an abbreviation of two Danish words, “leg godt,” which means “play well.” In Latin, the word means “I put together.”

The Danish company was founded in 1932 by Ole Kirk Kristiansen, who failed at carpentry workshop providing wood supplies, later to succeed in the business of wooden toys and then converting to plastic toys. After his death, Kjeld Kirk Kristiansen started manufacturing brick-toys in 1958 from cellulose acetate and using an early version of a hollow design with holes and studs, thus giving company more ways to compete and open the door to unlimited building capabilities.

Since the start of the company, LEGO has maintained a clear vision of “inventing the future of play.” While achieving this vision has been a matter of hard work and continual research into its customers and how to provide innovative products, repeatedly returning to this vision has been a key element that helped LEGO in the journey to success.

LEGO had collaborated with various famous production firms and characters such as Star Wars and Harry Potter which, although short lived, did well in the market. This out of the box thinking almost led them to the verge of bankruptcy as the craze of characters went away.

They returned to their original brick themes, thus started thinking inside the box again. One of LEGO’s key marketing strengths was making consumers buy a new brick set which would actually add to the previous one, thus adding another chapter to the story.

Strategies: D4B and Shared Vision

LEGO developed a design process model known as “Design for Business” (D4B) to ensure the continual linkage between innovation and its business plan which shifted innovation strategy from being product-focused to being company-focused. D4B focuses on defining creativity and design within an organizational strategy. It provides for more collaboration between teams to improve the innovation process with the understanding that design is the roadmap that turns creativity into innovation.

The new vision was to rebuild the company’s brand identity as a creative toy-manufacturing enterprise. This vision ensures that both the creative side and business side share the same aims and fully understand LEGO’s business strategy and how to achieve strategic goals using the other team’s resources. The “Shared Vision Strategy” is the link between business and creativity and puts the process of innovation in its correct place in the organization.

Innovations

• User-Linked Approach: Lego has been on a journey which puts their user- linked approach increasingly at the centre of their strategy. An important aspect of such involvement – typical of ‘lead user behaviour’ – is that it is not driven by financial reward but rather from intrinsic interest and involvement.
• Architectural innovation: They built a system based on interlocking bricks.
• Product, process and market innovations: Adding wheels, figures, targeting and segmenting different markets, switching from cellulose acetate to acrylonitrile butadiene styrene (ABS) plastic, adding instruction manuals, etc. They included control and programmability to support such toys.  

Significance in the Subject

This company shows magnificent innovation which can be an excellent example of innovation matrix. Its ultimate Core Competency is the superior product and quality know-how and continual innovation which enables the company to deliver unique value to customers. LEGO strongly believes in expressing creativity not only in its products but in its production process.