Navigating LEGO’s innovation during a defining era.
CHAPTER 01.
Prelude
This documentary provides a unique insight into a defining era for LEGO company`s innovation and showcasing the resilience and creativity that turned crisis into triumph. It’s a story of dedicated individuals who navigated immense challenges, fueled by passion and ingenuity.
For professionals and students, it offers a powerful lesson in innovation and strategic thinking across management disciplines. For LEGO enthusiasts and employees, it celebrates the company's enduring legacy and the spirit that has kept it at the forefront of the toy industry.
More than a historical account, this narrative is a source of inspiration, a testament to the power of perseverance and visionary leadership. Join us in exploring the heart of LEGO's transformation and be inspired by a journey of incredible challenges that lead to the foundation of extraordinary successes.
Introduction
Many excellent management books and articles have documented how top management, using visionary strategies, transformed LEGO's deficit into a multibillion-dollar profit. I do not intend to diminish those achievements. However, my story begins with a small group of dedicated creative leaders who refused to give up during the toughest times. We could just as well have fled, likely with disastrous consequences for the LEGO Group. Instead, we stayed, navigating an unprecedented battle beneath the "engine hood" in LEGO's core development.
Here, I share my experiences as Design Manager and later VP for the LEGO Group, and the significant challenges my team and I faced during those pivotal days. Sometimes, it is those whom no one imagines anything of, who accomplish the unimaginable.
In 1994, LEGO faced dramatic poor sales figures, prompting a top-level reshuffle. Christian Majgaard who had been entrepreneurial in making the LEGO DACTA education division, emerged as a key director, part of a broader team under Kjeld Kirk Kristiansen. They launched themselves like a jazz orchestra, employing a bit of improvisational management they called "compass management." One of Christian's visions required a greater business understanding throughout the group, restructuring the organization into three divisions for low-age, mid-age, and high-age products, aiming for greater transparency, financial responsibility, and agility.
The consequence of this was a reshuffle and change of directors and middle management in order to lead in 3 divisions instead of one!
For over a decade, LEGO had experienced remarkable and uninterrupted growth by essentially doing the same thing repeatedly. Core product lines like LEGO System, City, Space, Pirates, and Castle, as well as Trains, Basic, and Duplo, relied heavily on incremental innovation. Models improved a little year by year, and the boxes looked a bit more inviting, but that was the extent of the progress. There had been attempts to introduce new concepts, such as Fabuland, Duplo Primo and Scala for girls, but none had a successful and lasting impact. Other concepts, such as a large building system for outdoor vehicles and an electrical computer interface to control motors and sensors, were ahead of their time and didn’t generate significant sales and thus finding limited success only in the smaller school market.
Marketing director Finn Mørkenborg Rasmussen occasionally warned that if our growth curve ever broke, we would be in a tough spot because we hadn’t built the resilience to withstand a downturn. He was partially right. The growth curve did break in 1988, leading to a period of concern within the LEGO Group. Sales numbers and the bottom line were poor, expenses remained high, and income couldn’t keep up.
Various factors contributed to this decline. On the global toy market, several trends, known as crazes, began to dominate. Major toy companies found success by tying different categories together around a compelling marketing story. Pokémon from Nintendo was one of the first, with games, playing cards, figures, models, comics, and videos all linked together into a massive business success. This was followed by Pogs, Beyblades, Yu-Gi-Oh, and Bakugan from Spinmasters, all using similar marketing principles. As these new crazes thrived and LEGO sales dropped, there was a growing sentiment that LEGO had become "yesterday’s" toy.
Management discussions were heavily influenced by these trends from the American toy market. LEGO's marketing strategy was still very traditional, focusing mainly on creating a push into stores with a classic news program for the trade. There was little emphasis on creating a pull from consumers and children asking for LEGO products. The annual physical LEGO catalog was probably the most significant marketing tool at the time. Internally, there was also a sense that LEGO had built up layer upon layer over the years without ever truly reviewing its organizational structure. Perhaps we could simplify it and reduce costs?
The pressing questions I grappled with at the time was: How could I help reverse this trend? What role could I play, in transforming LEGO company`s fortune?
Most likely due to my successful and enterprising work with the LEGO Technic product line, I was then asked to lead a new, much larger team—four times the size of my previous one—with unfamiliar product lines and a marketing team of mostly newly hired employees. My new direct boss, Jesper Torpe, unfortunately left the company quite abruptly and this left his position vacant for almost a year. During this time, I worked without direct management, which granted me few restraints but also left me isolated and no one to spare with for the many challenges ahead.
I had no choice but to improvise and to let my natural intuition and strong creativity guide me in the 5 big challenges I was trown into taking leadership of. Make or brake.
On a personal level, the HR department was notably silent. It could have been a natural place to seek support, but instead, I later ended up offering them sparring and inspiration. This narrative offers an insight into my journey and the significant hurdles we overcame to steer LEGO through one of its most defining eras.
THE 5 CHALLENGES:
1. DOWN SIZING! -The staff budget has to be cut 20%!
How do I take over the development responsibility for a whole range of product lines and the management of 100 employees, of which I only know a few, with a fixed mandate from top management to cut the team by 20% as my first task, and how do I find a new middle management group?
2. LACK OF MOTIVATION! – All remaining employees are scared, if they will go next!
How do I build trust and motivation again among the remaining employees?
3. CATCH UP! – 3 months innovation delay due to organizational turmoil!
How do we recover a loss of ¼ of a normal one year development cycles? It would be disastrous if we had no new products on the shelves in the coming year, especially since one-third of LEGO`s revenue is generated by the needed new releases.
4. CULTURE, SKILLS & ORGANIZATION! – Old structures are not agile enough to succeed!
How do you create a new culture based on a modern matrix form of collaboration that integrates employees across all development functions? And how do I persuade the managers of other functions to agree to this need and idea?
5. INNOVATION! – The increased market competition demands new innovation!
Although it seems too ambitious to implement at the same time, I have a burning desire to increase the conceptual impact of our models and sales units to make LEGO more competitive, which was desperately needed from a competitive & business perspective to survive in the long run.
TEAMING UP
I remember that it took a very long time before the marketing colleagues started to be just a little present and engaged in taking responsibility in the new setup. They did remarkably little to create process and a cultural changes! To their defense, the situation was that in the top management's efforts to bring LEGO closer to understanding the markets, it had been decided to set up a LEGO headquarters in Slough in England and place senior marketing managers there. Steen William Reves and Per Hjuler had accepted this package. In practice, this meant that they seldom participate in the daily tasks of creating a new collaborative culture where teams could work together more fluidly and continuously according to functional needs and resource availability.
Sten Reves was probably the only one who acknowledged that there was a task that had to be solved for the broader team. Together with my handpicked management group consisting of Torsten Bjørn, Kim Pagel, Joan Knudsen, Dorthe Kjærulf and Jytte Assenholm, we took on a huge responsibility that went far beyond our own job descriptions and tasks. It was this core team that really held LEGO's future development in the palm of our hands. If we had gone down with stress, not taken responsibility or just given up! Then it is difficult to see how the company had fared?
It subsequently had major personal consequences for all of us, with the workload and strain on personal strength, which especially the next one to two years came to mean. It was simply tough on everyone and our families!
In order to understand where I personally got the energy and inspiration from in the decisive management decisions that I and my team was able to make and implement, that led us forward and took care of most of the challenges we faced, I have to talk about my LEGO employee past.
THE BEGINNING
I was hired as a modeler one cold January day in 1981, the year before the Comodore 64 came on the market. I remember how happy and proud I was to have got the job. It was a bit of a dream come true, I must admit. Jørgen Bruhn was then head of LEGO's Billund development department, which he called Fortura. My direct boss was Jan Ryaa, who was the leader of a small team consisting of 4 other designers/model builders. Jan was a really good man to me. He was goodness itself and created respect for himself through his dedicated and skilled work. Believes that he was trained as a craftsman originally. It was cozy in Jan's group when there was coffee and Monday's weekly meeting. After a number of very good training years where Jan Ryaa taught me a great deal about all the design and development processes in LEGO, I was moved to Erik Bach's team together with the further development of the LEGO Technic program. Which turned out to be a very good decision. In my first years in the LEGO Group, Godtfred Kirk Chrisitansen occasionally came by in the development department. It was he who initially introduced the LEGO brick into the company's program and then transformed the small wooden toy factory into a modern concern. I remember him as a small, round and pleasant man, often with a cigar stub in the corner of his mouth. He was merely interested in following his business career as it developed. I never saw him express opinions about our work or models. Perhaps it was more Jørgen Bruhn who had that conversation with him. But his son Kjeld Kirk came after a while to participate in the final model approval meetings. So I got to see him quite often. At that time he was quite involved in the development of the models and the sales units. I remember that I had designed a seaplane which had to be motorized. This created a possible moment of risk for children who could hit themselves if they stuck their fingers in the rotating propeller. Kjeld suggested that we put an outer ring on the propeller! But I flatly refused that - expressing that I would resign if that was the solution! I was too much of a plane enthusiast to be able to live with the plane's design having to be spoiled, I felt. Kjeld was a little shocked by my robust statement, but perhaps also a little impressed by how much I cared about the expression and realism of the product! Now the solution was something with a special toothed wheel, so that safety was put in place. So I kept the job this time.
SATELLITE DEVELOPMENT DEPARTMENTS
I believe that Jørgen Bruhn was instructed by top management to initially establish a development satellite in Boston. It was in connection with the fact that Kjeld Kirk had entered into a contract to donate a considerable amount to the MIT university every year. Which in the first instance meant that MIT students would be encouraged to think in terms of modular teachers and LEGO-like research initiatives, at the same time that LEGO also got more direct access to being able to keep up with MIT Media Lab's research projects. Therefore, it was obviously an idea to have an external development team that could benefit from MIT's research results "first hand". It was Professor Seymour Papert who had developed the computer language LOGO, which also, among other things, contributed to the smart block unit which became one of the basic inspirations for LEGO Mindstorm's programmable basic unit. In addition to this idea, there was a tendency for Media Lab's research projects to be 10-20 years ahead of anything that could be industrialized. So like Electronic Inc, as an example! But the development group that was invested in outside MIT's direction in Boston had a hard time creating ideas that could get involved in the "development machine" in Billund, for several different reasons. It was not improved by the fact that another satellite was established in Tokyo and one in Milan and later one more in London. Most of the satellites were managed by Danes from Billund! A strategy had been expressed that these satellites should not be influenced by the development in Billund and that they should be completely free to have their own ideas for what LEGO could develop in the future! Whether it was Jørgen Bruhn's own idea or whether the strategy had been imposed on him remains unanswered. The result, however, was that very little came of these efforts in the subsequent launches. It seemed as though Jørgen was quite preoccupied with establishing these foreign satellites, probably in light of the fact that top management had expressed that if LEGO was to succeed as a global player, it was important to get input from other cultures in the world. Which was a healthy thought in itself. The question was simply how? An integrated process needed to be created for the ideas to progress and, in general, for some ideas to be created that could be used concretely and not just be basic research. Another kind of development satellite was one that Peter Boli had created in Switzerland. He had established a large technical development center for manufacturing equipment in a newly constructed headquarters near Zug in Switzerland. In this center, there was also budget and space to have a small product development team, thus completely decoupled from all other development, led by Philipe Kunz. They had actually been working there for quite a few years without much achieving any sort of integration into the launch processes. For all these satellites, it appeared that they all had skilled employees employed, but when not much came of the efforts, the main reason was probably the lack of intervention in the development gears in Billund, at the same time that they were professionally quite single-minded! This meant that they had difficulty inventing entire concepts. I don't even dare to think about what it cost to establish and operate these satellites with 6-8 employees in each for the 4-7 years it lasted? Jørgen Bruhn had many good sides and one was a very good eye for spotting creative and managerial talent. Not just for me, but also for a number of other employees, such as Jens Knudsen, Niels Milan, Gitte Thorsen, Lars-Bo Jensen and Jørgen Peter Sørensen just to name a few. Jørgen sent, among other things, me very early on a self-development course he himself had found useful, which was created by Lasse Sall. What later became Stifinder. It actually came to mean a lot in my strengthening of my own belief that I was capable of much more than I thought I could! As I said, Erik Back also became a really good teacher for me, but in other disciplines, among other things. how we could use freelance resources to solve special tasks, etc. But most of all, Erik Bach gave me a lot of freedom and trust, which I used to, among other things, create a small team of freelance designers, first in New Castle in Northern England and later in Milan, Italy and Valencia, Spain. It strengthened my management experience a lot on the international level and it was also during that time that I came into close contact with IDEO and Stanford University, the ideas of how to streamline and qualify development processes by integrating employees from a range of disciplines from the start of a project. Incidentally, the same time as Steve Jobs was on these edges without further comparisons. The whole idea of not working frequently, as Henry Ford's assembly line paradigm had otherwise been the most prominent method in the industrial age, but in multi-competent project groups instead. I was exposed to that idea in practice during my visits to Paleo
Alto. Here, IDEO demonstrated, among other things, how to develop in fast loops and fail-fast methods with teams consisting of researchers, designers, engineers, marketing and process managers. I really took that idea to heart, but of course wasn't able to put it into practice on a larger scale yet. In addition, I gained insight into the matter of how important it is to always have someone who takes the role of facilitator in development meetings and how much more efficient it could make collaboration and work processes. Another more design-wise inspiration on the same lines was SYD MEAD, whom I got to know and even visited at his home in Beverly Hills, LA. He was, among other things, the man behind the super-futuristic staging for BLADE RUNNER, the breakthrough film for Harrison Ford. Another thing that became important was that I was on a sales visit with some of LEGO's "Cowboys" sales agents in the New York area. It gave an exciting insight into how that part of the business chain worked. Very different from what I had imagined. What was most striking to me was how little the product itself meant to them! They sold toys today but yesterday they had sold candy for the trade and tomorrow it might be barbecues. Most of it was about making a good deal! But if a product had a good selling in-selling out ratio, then they were the most energetic in pushing the deal. Later, I also experienced LEGO's sales director in the Netherlands how he was able to create breakthroughs in the trade for petrol stations and kiosk shops. A new sale had arisen in devices that were no more expensive than parents might be tempted to throw a few boxes over in the back seat for the kids when they were waiting to fill up with gas. This meant that he was missing LEGO products that were in pocket money price levels, which we didn't have very many of at the time.
LEGO TECHNIC
I was in charge of LEGO Technic design management for an important number of years from 1986 to 1999 and during that time I succeeded in having models and concepts strengthened and expanded quite significantly. My most important contribution was probably a good eye for design and function, but also to have a nose for including the marketing aspects in the development process. I had some really good marketing colleagues in that time, such as Lene Bach, Jens Christian Lauritsen, Kirsten Walther and Finn Mørkenborg. Another important reason for a successful development was of course the employees in my own design team. We grew step by step with very different strengths/weaknesses and practiced letting the individual do what he was best at across the team and the projects. In 1994, we were up to approx. 25 in-house designers. The LEGO Technic program did not stand still in these years. First, we developed more and more advanced and larger models. We created new concepts that tried to push the boundaries of what LEGO Technic could be and become. So like LEGO Competition, LEGO Technic Cyber Master, Znap and many more internal prototype concepts. The most important concept, however, will be the LEGO TECHNIC SLIZER. That idea starts from my own hand and thinking. There is no one in management or marketing who expresses any need for what I set in motion. There was also no research report that pointed out a need or an opportunity? My biggest inspiration was probably watching my own children play in kindergarten and school at the time. As described, the toy industry is currently very much characterized by concepts that have in common that they have a low price point, are relevant all year round, have integrated packaging, are marketing driven and preferably with a physical competitive element. This mixed together with my experiences in the American trade and the need for low-cost products in the Netherlands. In short, this will be the brief I give my 3 "Skunk" team designers in Newcastle UK. I remember the Sunday when I wrote down and sketched out a 3-week assignment for them on the kitchen table! They draw and make some simple prototypes, which I present at the annual marketing input meeting. The concept is received a little coolly in the first transition. But after the meeting, I facilitate across the organization and thus for the first time a real attempt to work cross-organisationally from the start-up phase. Now I initiated for the first time the process that I had been inspired by at Stanford University and IDEO a few years earlier. Marco Ilincic from sales UK, Per Høvsgård from Engineering, Erik Kramer from Marketing Billund, Martin Christiansen one of my design group leaders and Andrew Nagle from my Newcastle team. This interdisciplinary workshop-facilitated one-day meeting results in us laying down all the basic cornerstones for the concept that will become the Slizer product series. After this meeting, we work in the design team to develop what will become a ground-breaking action robot series with a number of exciting robot heroes who each live in their own climate, a special planet. The robots get their unique ball joint assembly system, which is a necessity to get robots that can pose. They each get their own color code and some special design elements that make up the heads. We buy assistance from the advertising agency Advance, which creates the beautiful graphic staging for packaging and marketing. Finally, we are developing a completely dedicated plastic packaging for the robots, which partly makes the product more visible in the shops and which also means that the children can easily transport the models. All together with a strong focus on optimizing the units' investment and the business margin to become a financial success. Herein lies my choice of design expression. As a design manager, I choose a fairly ion-cast industrial look which partly works right for the robot theme and partly maximizes the financial gain because mold costs and production efficiency are already optimized from this design choice. The following year's sales will pleasantly surprise everyone! Slize will simply be a resounding success with a really good earnings profile! The market is screaming for more in the same direction, also because Slizer has broken the assumption that LEGO can only be in the building and construction corner! Now LEGO can also be found in the ACTION figure category. The foundation was then laid for the biggest breakthrough for self-developed media integrated products in LEGO's history. The LEGO Technic Slizer thus forms the foundation for the Bionicle series, which is going to become a billion revenue success for LEGO. In 2001 alone, the Bionicle series will make up ¼ of LEGO's revenue. Probably at that time the very best answer to a LEGO created product and universe that can in itself cope with the tough competitive situation. The concept is also strongly contributing to the fact that along the way we develop and learn how LEGO can become more effective on the marketing front and create a real PULL at fthe usurpers! At this point, I have released the responsibility for the product and it is i.a. Martin Riber Andersen and Stig Blicher who drive it on. Another good teacher and boss I had at this time was Torben Ballegaard Sørensen. He later became director of Bang & Olufsen. Torben was preoccupied with building a computer and LEGO model technological brand called MINDSTORMS. We therefore entered into a development work across the LEGO group's division for learning materials for schools, called DACTA. What I took with me from working with Torben was probably mostly his totally positive-energetic and uncompromising-entrepreneurial management style. Things could only go too slowly when you were with Torben. Many internal and external walls were broken down through Torben's way of leading and his belief that things could be done! His business drive and insight were also very rewarding. He came from the technology industry and even then had the multi-tasking way of working that most people have today. I also learned a lot from that. Although I did not attend many courses during these years, apart from a single business week at INSEAD in Switzerland, my education consisted more of doing things purely practically. Perhaps it would have been an idea to more systematically expand one's field of competence in a business direction, but my focus was constantly on the creative and the human resource-related and not on becoming a top manager with business responsibility as the goal. I would still say that it was the right choice both for LEGO and for myself.
However, I was on a now more extended self-development course with the Pathfinders, who specifically had 3 days out in nature without sleep building rafts and the like. Organized by ex-hunter soldiers. It opened the eyes to the fact that one's endurance limit can be moved quite so significantly. With this, I have explained a little about my background to quite suddenly and alone facing the series of major challenges I described at the beginning.
DIRECTORS AND MANAGERS GET`S FIRED!
What is happening almost at the same time as I am facing the 5 big challenges is that the top management is being replaced once again. Now it is the so-called business doctor Poul Plougmann who is brought in to save LEGO. He initiates yet another management turn-around which is called LEGO FITNESS and it is mainly about making big cuts and not so much about how we get back up with the core business. The LEGO core product as such is not his strength and focus, so after the cuts we find him mostly occupied with big ambitions to roll out more LEGOLAND parks in the world, roll out digital games, and initiate change initiatives that are received very negatively in the trade. Everything that lies outside or does not strengthen the core business.
A lot of managers and deputy directors were quickly fired. There was some who apparently took it with a raised forehead, while others were unbelievably knocked out. Others got really angry or unhappy. Quite to be expected after many contested the job for many years and actually did a good job.
After the dismissals on the top level, came the changes and further dismissals of the employees on the floor. In itself an unhappy time for the LEGO company. Especially because LEGO had been spared for many years. Of course, from time to time an employee had been fired for one reason or another and probably mostly for personal reasons, but that was absolutely not part of everyday life.
It is in the middle of this break-up that I am asked to take over the largest part of the creative staff and associated administrative and support staff. I remember that I didn't just say yes, thank you right away, but that I just had to think about it with myself and with the family. After all, it was a big leap for a relatively young manager. I also thought that there could be a big risk that it would not go well. Either as a result of my own mistakes or because the company simply failed in the challenges that lay before us. But I said yes, thinking that if I could do this task, there was almost nothing I couldn't do!
So there I sat as a newly appointed DESIGN & INNOVATION VP with a few simple binders from the former director, as a reference. So after a quick reshuffling and takeover, I am pretty much alone with the 5 big challenges on my shoulders and then experience that it will be without any direct senior management affected by stress. So no one to ask for advice and lean on! Which in the moment didn't actually worry me, but rather felt like a huge freedom. Who was going to stop me now? At least now I had the keys to LEGO's development for a while!
1. DOWN SIZING
I quickly realized that coming from the creative ranks of the company, my management style would have strengths but also weaknesses that were different from what a more administrative personality would exercise. The first thing I therefore did was to find myself a kind of management partner, or wingman. I thought a lot about finding someone who complemented my own skills. Someone I could build trust with and someone with whom I had good chemistry. It was Torsten Bjørn. It turned into a tremendously good collaboration in the next 3 years. Next, it was about finding some good, strong middle managers who were robust enough to withstand what we now had to go through as a management team. I used Torsten as a good sparring partner and together we came up with what would turn out to be a good and solid team for the next 3 years. Now came the difficult task of selecting and firing approx. 20 employees! Not exactly a dream task to begin with and it also gave me a lot of sleep-disturbed nights, I must admit. In fact, we decided to go a little deeper to make room to use new foreign designers who I felt could significantly strengthen our conceptual strength. My theory was that if we were to field the best possible football team, then it could be somewhat better if we could include players from abroad and not just those who were once in series 3 in Jutland. Without discrediting the core employees who were completely unique and who for some of them are actually still there to this day. Another factor was my desire to achieve a greater degree of diversity. It may sound very obvious today, but it certainly wasn't at the time. Firstly, the development was characterized by men and quite a few women. Next, there were no known representatives of the LGBT and representatives from other cultures and races were virtually non-existent. We did away with that and let it be an integral part of our fairly extensive recruitment process, which now began to focus internationally, instead of the local Jyllandspost ads. We chose to see it as a kind of resource allocation task. In reality, this was the start of the way we broke up the old line organization and introduced a more matrix-oriented project management instead. Up until this point, the development department had been a line organization where people remained as a starting point in the groups they had been employed in from the start, regardless of whether the needs and nature of the projects changed. Some of the downsides were that there could be a group scrambling to meet a deadline, while the group right next to it had too little to do. Or there could be groups that did not have particularly good design skills for certain task needs, while there were super strong employees in other groups who could have made a qualitative difference for a period of time! But as I said did not come into play. Resource and competence allocation in relation to the projects' stages and needs therefore became the focal point in an ongoing adjustment of the placement of employees in project groups. This also meant something for the need for the physical arrangement of teams! The building we are sitting in is actually the old factory hall built in the 50s, which has been rebuilt. Actually quite nice with the old classic slanted factory skylights, as well as an inset cover around the walls. But there is a rather large factory floor which makes up the largest area. We are experimenting quite a bit with how we can make the project groups flexible? The challenge is that the groups change size and members continuously over time? So how do we utilize it physically? At first we moved tables and shelves around, but found that it was much simpler to move some specially designed lightweight walls that we had produced ourselves. It made it much simpler and easier after that. All in all, the interior design was something we changed quite a bit. We also created a Cafe with a smaller range of dishes, which was a welcome innovation for the employees who would otherwise have to spend 30 minutes going to the factory canteen if they did not want to eat their own packed lunch.
HARD, BUT JOB DONE!
2. CATCH UP!
So there was the challenge of the lost schedule of about 3 months? How on earth were we going to make up for lost time? With a 20% reduced workforce? With demotivated employees after a long threat of dismissal? With employees who, on top of that, we would ask to participate in the work processes in an unknown way? Would there be layoffs? Would we managers and employees be able to handle the pressure? In the next 3 months, overtime was of course one of the means to make up for lost time. A lot of overtime pay was paid to the employees, but of course the budget still had to be kept! As I recall, it was at this time that the long-standing 8-hour workday rule completely disappeared for white-collar workers. My management group and I put in at least 60-70 hours a week for the next year and apparently without direct compensation! But we took responsibility and that as part of the task. We could see that if we didn't do it, then LEGO simply wouldn't make it to the news launch and what would that mean for all of our workplaces. No one complained about it and our families supported us in most cases, even if they also had to suffer resignations. I myself had two children who were barely school-ready yet, and my wife chose to go part-time during that period so that we could make it work together on the home front. I remember when I got home from work that year, the kids were usually put to bed and maybe I could just catch up on a bedtime story with them before they fell asleep. After the first 3-4 months we had actually succeeded in catching up with the approximately 3 month delay that had occurred before we took over management. With a joint effort and the tenacious efforts of the entire team, it was successful. This was of decisive importance so that the production and sales functions could do their part in getting the products to market. As I said, it would not have been useful to have the news launch ready 3 months after Christmas!
WELL DONE!
3. FROM LINE TO MATRIX.
When I look back on it now, it really surprises me that there was no one in the top management who took responsibility for spreading a matrix structured organization? Most people had heard and were inspired by OTICON and Lars Kolind's Spaghetti organization principle, but now nobody saw it as a means to achieve something? My own management was, as I said, undermined by stress, so there was no backing, direction or resistance from there either? But I was absolutely clear in my conviction that this would be the way forward at that time and with the need for change we were dealing with. The challenge for me then consisted of persuading the other department heads to restructure into a joint project-oriented matrix organisation! On paper, many would probably believe that it would be a good idea, but from there and then wholeheartedly wanting to participate in the experiment was another matter. After all, some of the department heads had been at their organization for many years and would no doubt feel insecure and perhaps threatened by such a reshuffle. If all their employees were suddenly scattered across many different teams? How would they then be able to keep up with their efforts and work progress? How could they assist them with professional training and coaching? How should they be able to assess their bonus and salary development? As well as many other questions loomed large. But it was very much about creating a spirit of necessary renewal in the present. Positive pressure and communication about how effectively we as multi-competent teams could achieve our common goals. How the different skills and professional groups could facilitate and solve each other's tasks by working smarter. I remember that I held meetings with managers from Marketing and Engineering and that I somehow managed to reach an agreement to move the departments together in the same building and then divide the employees into project groups. Of course, each head of department had to be responsible for their resource allocation, but our management group took on the responsibility of forming an overall ongoing overview, together with project managers who had been appointed for each major project. In other words, we succeeded in creating a new form of collaboration across all functions, even if it was done at "Gehör", since there were not many direct role models to lean on.
WELL DONE!
4. CULTURE, SKILLS & INVIRONMENT
How could we create a new culture that would become a lever to make the many changes that were necessary? In those times, the big HR mantra was the word READINESS FOR CHANGE. Yes, today we are probably about to throw up over it, but in fact it was exactly what we needed if we were to succeed. The question was whether we could use a kind of event culture, as an extra drive to achieve both commitment, efficiency and direction, at the same time? My management team and I decided to give it a try anyway. There was not much to lose. So one of the first things we did was to place all our own desks together right in the middle of the floor in the large former factory hall. We made visible leadership quite literal. Until now, managers were some who lived in their own offices scattered around the building. Here in the middle of the floor, we proclaimed that the creatives had taken power in several ways. Kim Pagel remembers one Sunday I had a huge banner hung on the outside of the building that said RED ALERT! That was the sight that met the employees when they arrived on Monday morning. Then everyone could see for themselves that something different was going on! I remember standing up on my own desk and giving a commencement speech to everyone for RED ALLERT. Where I explained to all employees what challenges we were facing, what was going to happen now and what I expected from them and what a significant role they played in us being able to achieve our common goals. Namely that:
• Reach the news launch this year!
• Increase the attractiveness of the products and the right "value for money",
• Provide a team effort with respect for the needs of the individual,
• Create improved and more efficient forms of collaboration,
• Strengthen the individual's skills and get new ones on board,
• Improve our "tools and working environment",
RED ALERT was therefore not a top management strategic decision, but a necessary rather local management approach, which of course underpinned what the company wanted and needed. But here it was made tangible and meaningful for the individual. Large broad top management Power Points with COMPAS Management and FITNESS were replaced with something alive and present in a different way. Godtfred's wife Edit Kirk Christiansen, who at the time still lived in their villa just behind the development buildings, had observed the large banners on the building and wondered what it might mean? She had then asked the guards if a strike had broken out at LEGO! There was no way, quite the contrary! There was now an employee battle for the company's survival. It thus succeeded in using the creation of a new and more creative and event-based corporate culture to shift the employees' general reluctance to change. This made everything else easier to make happen.
BRAVO!
5. STRENGTHEN CONCEPTS
How could we increase the conceptual impact of LEGO's product lines? Before this time, LEGO's marketing department had received an inquiry from LUCAS film about an opportunity to make Starwars Licensed space products. It could be interesting since they wanted to make 3 new movies. The thing was that the LEGO System had actually had a Space themed line for a number of years already and adding an additional licensing cost was perhaps not a straightforward decision at that time? In addition, Starwars was indisputably a kind of war toy that LEGO had decided never, ever to make. But Kjeld nevertheless accepted this fantasy tale of a feathery future among alien galaxies. So let it be said right away that it was not my idea and merit that we started developing the models for the 3 old films. But when I saw the design of these models, I realized that something was really missing here! LEGO's then range of building blocks was simply too clumsy! Yes, it may sound paradoxical and logical at the same time. The question was, how could we improve the design so that we got closer to the aerodynamic and sleek shapes that many of Starwar's starships from the movies had and have? But for me it wasn't just a need for this theme, but something that cut across many product lines. Especially cars, planes, ships, but also buildings and other things all had the same need for more SHAPE. Therefore, I initiated a transversal project with the aim of creating a new family of elements that could fit together geometrically and structurally and give these streamlined SHAPE shapes. It was important to me that we achieved a coherence in the design language with the original angular block, so that they did not just become an organic blob without character. In reality, we had to stick to the Scandinavian design code, which we see practiced today in other products such as B&O, Volvo, Louis Poulsen etc. Together with the designer Henk Holzheimer, we recorded and determined the basic geometries of the entire system on a very large board. After this, all elements in the entire SHAPE family were drawn up in CAD. After this, the creative design shaping system was developed for molds and then used across models and project groups. The SHAPE system was given a design aesthetic of decisive importance for how the Starwars models subsequently came to look. They really got a boost. As I said, STARWARS was a success and later a Giant success. But no one showed it at the time. Another important license was added to the program and it was Harry Potter based on J.C. Rowling's novels. It was LEGO's American director Rob Elish's merit that Harry Potter was spotted, and agreements made with Warner Bros. Actually before there was the first movie. It was well seen by him, who had only the impression that the books had caught the interest of the prayers, to base the decision on. Now LEGO's core building system had taken 2 large license agreements on board. We actually only had a guess as to what significance it would have, but when the first new Starwars film came to the cinema, sales soared to new heights and the same applied to the Harry Potter film. Although there were immediate dips in revenue in the following year when there were no top films in the cinemas, these two licenses, as well as the self-created Bionicle series, together pointed to LEGO's new success platform. LEGO was to get its new business boost by becoming a media-integrated company and not a software and game company.
NOT SO BAD, AS WE SAY IN JYSK (DANISH).
WAS IT BY CHANCE?
Now maybe someone will object if it was in reality as critical as we experienced it and which I justify here? Or wouldn't there be others who could come from outside with good management skills and ideas who could have done the same? In a way, we have already responded because we were responsible for 75-80 percent of LEGO's then turnover on core products, but we did not have the management of the Duplo segment, which just got new management from outside.
DUPLO SEGMENT,
So
CONCLUSION
As I reflect on this remarkable journey, I am filled with a profound sense of gratitude and accomplishment. The transformation of LEGO from a struggling company to a thriving, innovative leader in the toy industry was not just a result of strategic decisions and management practices, but also of the unwavering dedication, creativity, and resilience of its people.
In the darkest days, when the future of LEGO hung by a thread, it was the collective strength of our teams that kept us afloat. We faced immense challenges—drastic restructurings, demanding schedules, and the pressure of sustaining a beloved global brand. Yet, through it all, we maintained a steadfast belief in our mission and our capacity to innovate.
The journey was far from easy. It demanded long hours, personal sacrifices, and at times, a leap of faith. But it also brought out the best in us, fostering a spirit of collaboration and camaraderie that transcended individual roles and responsibilities. Together, we redefined what it meant to be part of LEGO, not just as employees, but as custodians of a legacy that continues to inspire and delight millions around the world.
Our efforts to embrace a matrix structure, cultivate a dynamic and responsive culture, and innovate with a keen eye on market needs were pivotal. We learned to balance tradition with bold new ideas, ensuring that our products remained relevant and exciting in an ever-evolving landscape. The successful integration of iconic licenses like Star Wars and Harry Potter, alongside groundbreaking concepts like Bionicle, exemplified our ability to adapt and grow.
Looking back, I am immensely proud of what we achieved. We did more than just save a company; we fortified its foundation for future generations. LEGO’s story is a testament to the power of creativity, the importance of resilience, and the impact of visionary leadership. It is a story of how, against all odds, a small group of dedicated individuals can come together to accomplish the extraordinary.
As we move forward, the lessons learned from this transformative period will continue to guide us. We have demonstrated that with the right mix of innovation, collaboration, and unwavering commitment, anything is possible. LEGO’s future is bright, not just because of the bricks we build, but because of the people who build them.
To my colleagues, past and present, thank you for your dedication and passion. To the leaders who believed in our vision, thank you for your guidance and support. And to the millions of LEGO fans worldwide, thank you for your unyielding loyalty and inspiration. Together, we have built more than toys; we have built a legacy.