It is a famous story, one that is fast becoming the cliché of grace-to-grass-to-grace stories in the world of business. But it is an inspiring one nonetheless, a history that LEGO wears like a proud badge of honour, and one it has shown over the years that it hopes to never go through again.
In 2003, exactly 56 years after the famous toy company’s founder bought the first plastic injection moulding machine in Denmark to start manufacturing plastic bricks for building blocks, LEGO was facing possible bankruptcy and eternal extinction. Despite its introduction of newer toys – some of them based on popular movies at the time including Harry Potter and Star Wars – and video games, it recorded a $300million loss with a projected loss of $400million in the following year. It seemed like the appeal around building blocks had finally run its course.
Instead of throwing in the towel, however, Kjeld Kirk Christiansen, grandson of original founder Ole Kirk Christiansen and the CEO at the time turned to a report from management consultant Jorgen Vig Knudstorp hired in 2000. Sensing that the recommendation might be what the company needs, he relinquished his role of CEO to Knudstorp and assumed the role of chairman.
Knudstorp immediately got to work. The company sold a 70% stake in its successful Legoland theme parks for $460 million to the Blackstone Group and closed the firm’s Danish headquarters building, moving management into a nearby factory. It then outsourced the overwhelming majority of its plastic brick production to cheaper facilities in Mexico and the Czech Republic. Ideas for new avenues of growth were gotten from every member of staff and tested to confirm they were in line with the company’s goal of LEGO being recognized as the best company for family products. The number of LEGO sets and toys were reduced from 12,900 to 7000.
It paid off. Sales started to look up, and by 2015, LEGO had risen to the ranks of the world’s most valuable brands. Strategic licensed partnerships, an animated movie, video game franchises, expansion into profitable markets and careful introduction of new sets targeted at both the old and young all helped to propel the brand even further, making it the world’s largest toy brand today. And now, a new art series that allows players create displays of pop culture icons including The Beatles, hero figures from Marvel Studios and the Star Wars Saga is pushing the brand’s value even higher, allowing it to record decent profits even as other businesses struggle.
These colourful mosaic displays are not only perfect for indoor games in a pandemic world but can also be converted to wall art for your personal space. Each set gives you the option to build multiple versions of the design, comprising around 3,500 pieces, and comes with building instructions as well as its own 90-minute soundtrack, so you can listen to the curated tunes and facts about your subject while you’re putting your wall art together.
The LEGO Art series is available from September 1 in the U.S. and August 1 for international retailers. As individuals look out for interesting ways to occupy themselves now that outdoor activities are limited, businesses can once again learn from the LEGO story as they try to survive in a post-pandemic world.
