There have been a lot of books written on how to make a company succeed and the leadership qualities that go with it. But rarely do we come across one where the authors look at the role of innovation as the driving force in transforming a traditional company into a dynamic one, more due to the force of circumstances. It is even more compelling when the story is about a company that manufactures mere plastic bricks—LEGO.
Brick by Brick, as the title suggests, is the story of LEGO, a Danish company that has become a household name, literally, with the maximum number of bricks existing in this world. The genesis of this book is quite unique. The authors, Robertson and Breen, were on the lookout for separate stories on companies that were models for innovation. While researching the same about LEGO, they realised it was worth more than a chapter, and that nothing less than a book would do justice to the tale. With the exception of probably Apple, no other name strikes a similar chord with the customer and the LEGO brand is probably on a par with those like Coca-Cola and Disney. Quite surprisingly, while the brand is well-known, the organisation is not, since it is a family-run business and not listed on Wall Street. Some of the terms associated with the company are creativity, educational, imaginative and so on. But the story of its rise has been quite inspiring because there is a lot which went behind building the bricks of this storyline. This book is really about the lessons from the strategies put in place by LEGO to reconstruct in turbulent times. Some glimpses of what it has shown can be sampled here: The company has given room for innovation while retaining focus, provided autonomy with responsibility, delivered in short run while building for the long term and, more importantly, has operated within the limits of business orthodoxy while creating value. LEGO is a family-run business started by a master carpenter in 1932 in Billund, Denmark. From wooden toys to plastic bricks to Star Wars, it has had it all. The authors research the practices of the company and find that there are six core principles, which have remained untouched over the years and which can be templates for other companies to consider. The first is that core values should never change irrespective of circumstances, howsoever adverse they may be. Second, companies must focus on relentless experimentation, which, in turn, will beget innovation. Third, companies should look at creating not just products, but a system. By not doing so and focusing on a narrow corner, they lose sight of the bigger picture. Fourth, to have profitable innovation, we need to stay focused on the business. Fifth, the product should be authentic as far as the customer is concerned, which will separate it from competition and imitation. Sixth, the focus should always be on the store and then the customer, not the other way round, as it is the store that sells your product. This may sound contrary to what we normally hear. In the context of these principles, there is an interesting anecdote shared of how LEGO reacted to the Star Wars mania, when the US office suggested they tie up with Steven Spielberg to create these characters in 1997. Internally, they were against the idea of such partnerships and more so as they were against getting into the concept of ‘war’ in children’s play kingdom. It was finally agreed upon only after a survey among parents to ask for their views.The dream run of the company actually carried on till the end of the 20th century. But it lost lustre when the group’s patents ran out on the interlocking brick. Low-cost competition hit it hard, and the response was to bring out more toys every month. This pushed up costs, but not sales, which had reached a plateau, putting pressure on profit lines. By the late Nineties, kids preferred interactive games and other innovative software, leaving conventional toys behind. Compared with Game Boy and Xbox, the brick appeared to be quite a part of a bygone era. As losses mounted, they had to change track with a new management and their new approach is what the book is mostly about. To reinforce these ideas, the authors give examples across companies which have done similar things. P&G followed the connect-plus development initiative, where it formed 1,000 successful agreements with top innovators around the world. Southwest Airlines redefined their industries as they sailed to blue ocean markets that others ignored. Canon’s digital cameras were a case of disruptive innovation, where the film camera was made obsolete. Apple sustained its hold on the MP3 music player as it surrounded the iPod with a full spectrum of complementary innovations. But as is the case with most books on innovation, the lessons matter more than the story. The internal restructuring and the names that go with the story are more for local consumption and may not mean much for the reader. A differentiator in this story is the distinct focus on the retailer, which is a lesson, because to push any product you have to make it attractive for the final seller. The fact that innovation is the driver in this competitive world should be remembered by companies, as otherwise all of them would enter the syndrome of low growth and stagnation, and would have to foster a culture of innovation within to emerge successful.
Brick by Brick, as the title suggests, is the story of LEGO, a Danish company that has become a household name, literally, with the maximum number of bricks existing in this world. The genesis of this book is quite unique. The authors, Robertson and Breen, were on the lookout for separate stories on companies that were models for innovation. While researching the same about LEGO, they realised it was worth more than a chapter, and that nothing less than a book would do justice to the tale. With the exception of probably Apple, no other name strikes a similar chord with the customer and the LEGO brand is probably on a par with those like Coca-Cola and Disney. Quite surprisingly, while the brand is well-known, the organisation is not, since it is a family-run business and not listed on Wall Street. Some of the terms associated with the company are creativity, educational, imaginative and so on. But the story of its rise has been quite inspiring because there is a lot which went behind building the bricks of this storyline. This book is really about the lessons from the strategies put in place by LEGO to reconstruct in turbulent times. Some glimpses of what it has shown can be sampled here: The company has given room for innovation while retaining focus, provided autonomy with responsibility, delivered in short run while building for the long term and, more importantly, has operated within the limits of business orthodoxy while creating value. LEGO is a family-run business started by a master carpenter in 1932 in Billund, Denmark. From wooden toys to plastic bricks to Star Wars, it has had it all. The authors research the practices of the company and find that there are six core principles, which have remained untouched over the years and which can be templates for other companies to consider. The first is that core values should never change irrespective of circumstances, howsoever adverse they may be. Second, companies must focus on relentless experimentation, which, in turn, will beget innovation. Third, companies should look at creating not just products, but a system. By not doing so and focusing on a narrow corner, they lose sight of the bigger picture. Fourth, to have profitable innovation, we need to stay focused on the business. Fifth, the product should be authentic as far as the customer is concerned, which will separate it from competition and imitation. Sixth, the focus should always be on the store and then the customer, not the other way round, as it is the store that sells your product. This may sound contrary to what we normally hear. In the context of these principles, there is an interesting anecdote shared of how LEGO reacted to the Star Wars mania, when the US office suggested they tie up with Steven Spielberg to create these characters in 1997. Internally, they were against the idea of such partnerships and more so as they were against getting into the concept of ‘war’ in children’s play kingdom. It was finally agreed upon only after a survey among parents to ask for their views.The dream run of the company actually carried on till the end of the 20th century. But it lost lustre when the group’s patents ran out on the interlocking brick. Low-cost competition hit it hard, and the response was to bring out more toys every month. This pushed up costs, but not sales, which had reached a plateau, putting pressure on profit lines. By the late Nineties, kids preferred interactive games and other innovative software, leaving conventional toys behind. Compared with Game Boy and Xbox, the brick appeared to be quite a part of a bygone era. As losses mounted, they had to change track with a new management and their new approach is what the book is mostly about. To reinforce these ideas, the authors give examples across companies which have done similar things. P&G followed the connect-plus development initiative, where it formed 1,000 successful agreements with top innovators around the world. Southwest Airlines redefined their industries as they sailed to blue ocean markets that others ignored. Canon’s digital cameras were a case of disruptive innovation, where the film camera was made obsolete. Apple sustained its hold on the MP3 music player as it surrounded the iPod with a full spectrum of complementary innovations. But as is the case with most books on innovation, the lessons matter more than the story. The internal restructuring and the names that go with the story are more for local consumption and may not mean much for the reader. A differentiator in this story is the distinct focus on the retailer, which is a lesson, because to push any product you have to make it attractive for the final seller. The fact that innovation is the driver in this competitive world should be remembered by companies, as otherwise all of them would enter the syndrome of low growth and stagnation, and would have to foster a culture of innovation within to emerge successful.
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