Summary: Brick by Brick

Review and Analysis of Robertson and Breen's Book

BusinessNews Publishing

• Editore: Must Read Summaries
• Anno: 2016
• ISBN:
  9782511023990
• Argomento: Betriebswirtschaft
• Categoria: Wirtschaftsbiographien

The must-read summary of David C. Robertson and Bill Breen's book: `Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry`.

This complete summary of the ideas from David C. Robertson and Bill Breen's book `Brick by Brick` explains innovation through the story of the LEGO Group. LEGO was founded in 1932 and through sheer grit and determination it grew into a multi-billion-dollar enterprise. However, at the end of the twentieth century, LEGO found itself fading as the digital world arrived. This summary highlights how LEGO's new management team developed a practical approach to innovation and as a result the company emerged from its near death experience to become one of the world’s fastest-growing and most profitable toy companies.

Added-value of this summary:
• Save time
• Understand key concepts
• Expand your business

To learn more, read `Brick by Brick` and discover the story behind the world's biggest toy company, LEGO.

Summary of Brick By Brick (David C. Robertson with Bill Breen)

1. The Seven Truths of Innovation and LEGO’s Decline

The arrival of video games, MP3 players and high-tech goodies in the global toy marketplace at the end of the twentieth century heralded a new challenge for LEGO. While the company has always been innovative, it suddenly found itself in catch-up mode. In response, LEGO rolled out an ambitious growth strategy based on seven of the most widely heralded innovation theories of the business world. These ideas – which seemed to work wonders for other companies – almost sank LEGO and it looked like the company was in a death spiral.

LEGO came into being in 1934. It was founded by Kirk Christiansen in a small carpenter’s workshop located in Billund, Denmark. The company took its name from two Danish words: leg godt which means “Play Well” in English. LEGO’s early years were marked by extraordinary hardship as Kirk Christiansen worked through the Great Depression, Germany’s occupation of Denmark during World War II and a fire which destroyed the LEGO factory in 1942. Christiansen almost gave up at theat stage but his tenaciousness and his sense of obligation to the company’s employees kept him going. Eventually, a new LEGO factory was back in operation by 1944 and Kirk Christiansen set about rebuilding the company.

Kirk’s mission was to: “Inspire and develop the builders of tomorrow.” He was also passionate about the principle: “Only the best is good enough,” and he had been known to recall items which had been incorrectly manufactured rather than let shoddy workmanship stand.

In 1946, LEGO became the first toy manufacturer in Denmark to acquire a plastic injection molding machine – which cost more than twice the previous year’s profits. It would take about ten years of experimentation for LEGO to learn how to make the company’s trademark LEGO brick. Much of that time was swallowed up trying to figure out the stud-and-tube coupling system which allows the bricks to come together with a satisfying click. Bricks allow kids to build whatever they wanted – making LEGO an endlessly expandable toy. The brick would turn out to be one of the toy industry’s legends.

As Kirk Christiansen worked to build the LEGO Group, he adhered to his own core set of founding principles which went something like this:

• Values are priceless – and should act as guiding principles for the enterprise at all times and in all settings.
• Relentless and persistent experimentation bears dividends – it will always get you to the future first. LEGO often places multiple bets on new innovations and then hangs tough long enough to reap the rewards. The fact LEGO took a decade to perfect its brick was no real surprise.
• LEGO is good at seeing the big picture – it realized early that it had to evolve from producing stand-alone toys to creating an entire system for kids to play with using the brick as the central element.
• LEGO focuses tightly – as exemplified by the fact the company dropped manufacturing wooden toys which accounted for 90 percent of its revenue in the mid-1950s in order to concentrate on plastic bricks. This was a bet-the-company proposition at first but eventually the advantages of building a plastic toy which is infinitely expandable came to the fore.
• LEGO works to make everything authentic – it created a kid’s fantasy world that grew out of their real lives and involved toys which were miniature versions of familiar things. It was not unusual, for example, for children to get LEGO tractors at the same time as their father’s bought new tractors for their farms.
• The LEGO Group works hard at getting retailers onboard first and building strong personal ties with them – so they became enthusiastic promoters of the LEGO range. While the company’s products are sold to children worldwide, the retailer’s interests have always been accommodated and prioritized by LEGO.

Kirk Christiansen’s son Godtfred started working for LEGO at age 12 and as his father’s health failed as he grew older, Godtfred assumed more responsibilities. He was named junior managing director of the company in 1950 and got into the habit of driving around Denmark to meet with LEGO retailers each summer. Throughout the 1960s, LEGO gradually grew its market by starting to sell throughout Western Europe and into the United States, Asia, Australia and South America.

By the early 1970s, the LEGO Group now employed one thousand employees and generated around one percent of Denmark’s industrial exports. Godtfred Christiansen passed leadership of the company over to his thirty-one-year-old son Kjeld Kirk Christiansen in 1979 but by that stage, there was concern because LEGO’s revenues had flat...