David Robertson Explains How Lego Conquered the Toy Industry in Brick by Brick

Posted on July 9, 2013

David C. Robertson explains how Lego conquered the toy industry in his new book, Brick by Brick. Robertson also explains how the company managed to turn itself around after being on the brink of bankruptcy nearly ten years ago.

From 2002 through 2010, Robertson was the Lego Professor of Innovation and Technology Management at Switzerland's Institute for Management Development (IMD). As the Lego Professor, Robertson was given unprecedented first-hand access to the company. He has toured the factories that produce billions of bricks each year, watched designers dream up new toys, and interviewed the company's top executives.

The book reveals how Lego failed to keep pace with the revolutionary changes in kids' lives and began sliding into irrelevance nearly ten years ago. It also reveals how Lego's near-collapse shows that what works in theory can fail spectacularly in the brutally competitive global economy. Robertson explains how the seven key elements of Lego's growth strategy from 1999 to 2003, driven by the business world's most popular innovation strategies, nearly ruined the company

Robertson also shares what Lego did to turn things around. Because of its ability to innovate, Lego has become the world's most valuable toy company. It has grown sales at 24% per year and profits at 40% per year, every year for the past five years, all while operating without patent protection in a viciously competitive global market.

In an interview with Amazon.com, Robertson was asked what the most dramatic ship was from the old Lego to the new Lego. Robertson says, "The Company's brush with bankruptcy gave it a dose of humility that it sorely needed. In the years between 1999 and 2002, the company's manager made decisions about which toys to launch and which to kill. They proved remarkably bad at that. Mads Nipper, who runs all of product development and marketing, says 'there are only two totally honest groups of people in the world: kids and drunks.' Now, when LEGO is looking to develop a toy, they show different concepts to groups of kids, then they do rough mockups of the toys, then more finished versions, and so on until they're sure they've got the toy right. Management's role has changed from making decisions about which toys to bring to market, to making sure their teams have tested the toys thoroughly."

Photo: Random House