Lessons in disrupting your business: Lego goes gaming
At TomorrowToday we talk a lot about disruptive change, and we spend much of our time helping our clients develop corporate cultures that are able to handle disruptions. There is a negative side to disruptive change, and it’s necessary to think and act in ways that reduce risk. But, equally, turbulent times bring huge opportunities as well.
There are opportunities to extend one’s offerings to existing clients, find new clients for both existing and extended products and services, and change the business models that support these. Great questions that can get the right type of thinking started include:
- Who else could use our products?
- What else can our products be used for?
- What do our best clients desperately want? (Not “want from us”, but what needs and wants do our best clients have in their lives in general.)
- What else can we deliver/produce with very little change to our core processes?
There are other ways to get to disruptive innovation, but these questions are a simple and great starting point. Maybe the best starting point for disruptive innovation though is to ask yourself what type of company you are.
To help our clients understand the power of this, we’re constantly looking for examples of companies who have navigated disruptive change successfully.
My current favourite example is Lego. The Danish construction toy is about as ubiquitous an object as you can imagine. More than 400 billion Lego bricks have been produced since the company began in 1958. There are about 62 Lego bricks for every person on Earth. Approximately 19 billion Lego elements are produced per year at the moment: that’s 2.16 million moulded every hour, or 36,000 every minute.
Successful. Yes. And they could have simply continued doing what they were doing. But instead, Lego is constantly adapting.
When I was a kid, Lego was basically a set of standard blocks that you could turn into anything. And that’s what I loved about it. One day I built a castle, the next a space ship, and on the weekend, a dinosaur. Through the 1990s, Lego began to shift to kits, where the pieces in a box were purpose designed to produce a particular model, and the fun was following the intricate building instructions to do so.
Some time ago, they recognised that the younger generation had shifted to computers, and that the heart of creativity was no longer just in building models (from imagination or instructions) but rather using software to control machines. So, Lego produced Mindstorms, which is still their best selling line of all time. This allows you to build objects that are controlled by software. You wouldn’t really classify this as “disruptive”, but it was a nice step change for the company. Instead of seeing themselves just as a manufacturer of children’s toys, they see themselves as a company that provides opportunities for creativity. They therefore look for opportunities to develop products and services that enhance creativity. Software was an easy step when they changed their lens.
They also provide support to schools and teachers wanting to use Lego in the classroom. They see themselves in education too. This has extended into the corporate world, where there are many consultancies who use Lego to teach creativity, team building and innovation. Lego actively supports these initiatives.
Over the past two decades, they have also recognised the value of Hollywood. Instead of seeing themselves only as a manufacturer of toys, they see themselves in the entertainment business. When they looked at themselves through that lens, it was easy to make the next step, which was to link up with some big movie franchises and offer Lego products to match. Star Wars and Harry Potter are the bestsellers of these, but there are many others. Some Lego mini figures from these collections have become highly sought after, and very expensive collector’s items. For example, in 2007 when LEGO celebrated the Star Wars 30th Anniversary, 10,000 14K Gold C3P0 figures were randomly inserted into Star Wars sets. Now the price of these gold Lego minifigures is more then $400.
Their most recent innovation has been a big step. Lego now produces video games, often linked to Hollywood movie franchises, in which you navigate through a world or a movie plot line doing what normal adventure video games do, but with digital Lego characters. As with most disruptive innovation, when you look backwards it’s quite obvious and easy. But how did a manufacturer of plastic bricks get to developing video games featuring their plastic minifigures? At one level, it’s simple: they understand that they’re not in the manufacturing business. They’re actually in the games industry.
So, what industry are you in? What industries could you be in? What industries do you connect/intersect with? How could you play in other industries?
These are all great questions to ask as you look to try and take advantage of the opportunities created by disruptive change and turbulent times.
Lego reminds us that this can be done. Successfully. Like Lego, for most people, this is not optional. It’s the only way to deliver growth and success in the years that lie ahead.
By the way, there are no guarantees to success in this process. You can stray too far away from who you are, and lose everything. There’s an easy way to stop that happening, and that’s to accept that mistakes might be made but that it’s better to try, evaluate and scrap an idea than it is to do nothing. A few years back, Lego strayed far from their core product line when created an action figure line called Galidor. It had no traditional Lego construction elements and did not integrate with other Lego products which is the essence of Lego. It proved to be too unfamiliar to Lego fans who expect a certain kind of play experience from the brand. It was quickly abandoned. No damage was done.
What was the last experiment your company made that failed? How was this handled? What lessons were learnt?
These too are important questions.
Are you asking the right questions to ensure you build the kind of culture that can produce innovation required in a world of disruptive change? Maybe an hour or two with that old Lego set will be helpful after all.