Thanks to Ole Kirk Christiansen, a carpenter from Denmark, just about everyone is familiar with Lego. In 1932, Christiansen started out developing wooden toys in an effort to make a living during tough economic times. In fact, it was a few years into the Great Depression that created desperation and economic calamity worldwide.
Despite the fact that many companies shut down during this time in history, it was in 1934 that Christiansen decided to launch a new business, and he called it Lego. The word Lego is actually derived from the phrase “leg godt,” which is Danish for “play well.” The products initially offered by Lego were not exclusive to toys. In fact, Christiansen also provided household items, such as ironing boards and ladders. Despite the Great Depression, he forged ahead and found a way to stay in business.
It was in 1947 that Lego expanded and started manufacturing plastic toys. When Lego first started producing toys, they were basic and relatively simplistic, such as ducks, yo-yos and small trucks. In 1949, their signature product became plastic pieces, often called “bricks,” that interlock to create figurines. When the interlocking bricks were first created, they were called “Automatic Binding Bricks.”
The Automatic Binding Bricks were much like Self-Locking Bricks that were created in 1939 by Kiddicraft, a company in the UK. This came about when Lego purchased an injection molding machine from a supplier and that company provided them with a sample of the bricks made by Hilary Fisher Page of Kiddicraft. Page’s invention included plastic cubes that had four studs and two rows for the purpose of stacking.
This sparked further innovation because the stackable bricks that had previously been made by Lego were then manufactured using cellulose acetate. Essentially, the bricks developed by Lego was a modified version of those created by Hilary Fisher Page. One of the most stark differences was that the Lego version had sharper edges. Unfortunately, the initial iteration of Lego bricks did not fare well because they didn’t have the high level of quality for which Lego would come to be known.
Lego started shifting towards higher quality products. They also recognized that the creativity fostered by playing with colorful Lego pieces has always been part of the appeal. Children have fun playing with Lego bricks and parents appreciate that they require imagination. In fact, Lego bricks are often associated with childhood creativity. From the beginning until present day, Lego bricks work by finding ways to connect them to construct various objects, such as buildings and vehicles. As the years progressed, Lego pieces would be used to create more complex objects, such as robots and movie characters.
In addition to manufacturing billions of Lego parts, Lego Group also developed six amusement parks called Legoland, as well as various games, movies and competitions. The development of the Lego brand has resulted in many accolades, such as the “World’s Most Powerful Brand,” a title granted by Brand Finance, and once held by Ferrari. Lego has been highly regarded and a fierce competitor of companies like Hasbro and Mattel for many years.
In 2013, David C. Robertson wrote a book about Lego titled “Brick by Brick,” where he spoke of the seemingly insurmountable obstacles that Ole Kirk Christiansen had to overcome during the early days of the business. As a widower in the 1930s, he was raising four sons on his own, while also dealing with the tremendous difficulties brought on by the Great Depression and the invasion of Denmark by the Germans.
After battling through a difficult economy, as well as social and political woes, in 1940 the Lego factory experienced a fire that destroyed critical documents, such as blueprints for toys that were in the development phase. Perhaps even more devastating was that the fire destroyed the company’s entire inventory. Fortunately, Lego was able to recover from these tremendous losses.
A Commitment to Quality
By 1951, about 50 percent of products manufactured by Lego were toys. Ole Kirk Christiansen developed a value statement for the Lego Group that it has maintained for many years, which is “det bedste er ikke for godt,” translated “the best is never too good.” Long before the quality initiatives that are so prevalent today existed, Lego encouraged its employees to ensure the highest possible quality during the development of Lego products.
As is often the case with innovation, there were naysayers concerning plastic Lego bricks. In a highly publicized article in “Toy Times,” a Danish trade magazine, the author believed Lego could not replace traditional wooden toys with plastic toys. It wasn’t just the author who felt this way, it was a sentiment of many people during that era. However, it’s believed that Lego bricks became an exception to the rule because of Christiansen’s high standards and the level of quality that he demanded.
The mindset of Ole Kirk Christiansen was much like that of Steve Jobs when it came to Apple products; only the very best and the highest quality would suffice. It’s no wonder both leaders experienced tremendous success, despite competition and difficult market conditions. Both Christiansen and Jobs focused on finding ways to make good better, then make further improvements until their products were so outstanding that they could not be ignored.
A Family Affair
In 1954, Christiansen brought his son, Godtfred Kirk Christiansen, into the business in the capacity of junior managing director when he was just a teenager. Possessing business acumen learned from his father, Godtfred was open to ways to drive innovation and continued growth. It was while communicating with an overseas buyer that the concept of a toy system first arose. Like his father, Godtfred could see the potential for growth and pursued opportunities for further product development. He was particularly interested in expanding the creative elements of Lego bricks.
As the company engaged in product development activities, they experienced technical problems with the locking aspect of the Lego pieces. While the pieces were generally able to interlock, the locking ability and versatility were limited. It took five years to develop an improved product. In 1958, modern Lego bricks were created that consisted of acrylonitrile butadiene styrene polymer, commonly known as ABS. The Lego Group received a patent for their new Lego bricks in that same year.
What was exceptional about the new design is that it contained a stud and tube that enabled children to connect the bricks without them falling apart. Unlike previous iterations, they were a lot more functional because the pieces didn’t fall apart, which gave way to more creativity during playtime. Although similar in appearance and compatible to other designs that dismantled easily, the modern design was sturdier.
By 1958 when Ole Kirk Christiansen died, Godtfred had gained the experience necessary to take over and grow the business. He was there when the company overcame many obstacles and he was well acquainted with the mission. Godtfred was instrumental in advancing company objectives and championing the vision. The underlining mission was rooted in maintaining the value that Lego bricks added to the lives of children – it was what his father wanted.
Lego started to focus on what Lego products allowed children to create. To that end, they created a marketing plan with a campaign that said “You can go on and on, building and building.” Another campaign during the holiday season stated “Lego, the toy they won’t be tired of by December 26th.” Yet another read “Lego toys build anything, especially pride.” This shift in focus came about after repeatedly observing how children engaged with their products.
As Lego expanded their offerings, they started to develop a more holistic approach to the development of products. In 1962, they created wheels to accompany Lego bricks and other products. This added a tremendous amount of versatility to what children could create with Lego pieces. These tires weren’t just made of plastic, they were also made of rubber like real tires. As it turns out, Lego has manufactured so many wheels, that they are considered the largest producer of tires in the world. They now make nearly 400 million wheels each year.
The growth of Lego has continued for decades. In 1969, the company introduced their Duplo product line, which consisted of simple bricks with dimensions that were unlike their original bricks. They were double the height and width as other pieces produced by Lego because their expanded target audience was younger children. The goal was to widen their market share by accommodating the learning and development needs of children that were previously outside of the typical age group.
With Lego bricks, tires and many other offerings, in the 1970s, Lego recognized the need to support the creativity of the children who played with Lego products by offering miniature figures. These figures would be used to inhabit the buildings, vehicles and cities formed by children. It was also during this time that Ole Kirk Christiansen’s grandson, Kjeld Kirk Kristiansen, took over for his father Godtfred, and led the company through many changes and continued success.
It was nearly a decade after Lego produced larger Lego bricks that they expanded their offerings to minifigures. This occurred in 1978, and turned out to be one of the best decisions the company has made because minifigures have become one of the most popular products made by Lego. In fact, it’s part of most Lego sets because of their ability to enhance the creative process when using other Lego products. Minifigures generate a lot of revenue because they’re used by people across a wider age range.
After overcoming many obstacles and experiencing decades of success, Lego faced the challenge of an expiring patent in the 1980s, which meant a tremendous amount of competition was right around the corner. After the patent expired, a slew of competitors started to manufacture products similar to Lego bricks, and the company was powerless to stop them. While they tried to do so with lawsuits, they were unsuccessful. Fortunately, brand loyalty would prevail as consumers knew the real deal and they were unwilling to compromise by purchasing fake products.
It’s not uncommon for brands to align themselves with successful enterprises, which is why Lucasfilm, a TV production company, sought out Lego during the development of Star Wars movies. The partnership would involve Lego licensing Star Wars toys. While this was a great opportunity for Lego, it was already an established brand and they had concerns about whether Star Wars aligned with their brand image.
Despite concerns about brand strategy, Lego made the decision to partner with Lucasfilm, which proved to be the right move. They introduced a product called “Phantom Menace” that ultimately represented over 15 percent of their sales revenue. In fact, it was the success of this partnership that made way for future partnerships, such as Disney, Harry Potter, UNICEF and IKEA.
The fascination with Lego bricks has contributed to ongoing pursuits to create the largest display in the world. There have been many worthy competitors, with one record consisting of a tower that was 112 feet tall. However, it couldn’t compete with the model built in 2013 that used more than 5 million Lego bricks to create an X-wing starfighter, which is a fictional spacecraft from the Star Wars movie. This Lego display was built to scale and had an incredible wingspan of 44 feet and weighed 23 tons. This model was so impressive that it was displayed in New York City and viewed by thousands of people.
Lego became part of the Space Shuttle Endeavour mission in 2011 when they developed the Lego Bricks in Space program. Astronauts involved with the STS-134 mission took 13 Lego kits with them to the International Space Station where they built models in an effort to find out how Lego pieces would react in an environment where there is microgravity. This was one of many times when Lego played a significant role in world history and proved to be an enduring brand, despite market disruptions.
As times have changed, so have the entertainment habits of children. In 2003, Lego found itself in a difficult situation because the breadth of products offered was too wide, which caused their sales to drop significantly. It was even reported that the company was going to file for bankruptcy because they had too many products that simply were not selling. It was no longer just about toys, they also had a clothing line that wasn’t sufficiently marketed. Some were even saying that there was a good chance Lego would be sold.
The following year in 2004, Kjeld Kirk Kristiansen resigned, although he was still a majority shareholder. The problem was that Lego had spread itself too thin and failed to be strategic about the products that were produced. For instance, some of the more popular product lines were constantly out of stock, while less popular products remained on the shelves at toy retailers. Some believe the problem arose because Lego became too focused on partnerships and licensing agreements.
It probably comes as no surprise that the digital revolution is also believed to be a reason why Lego has experienced problems with sales. It’s worth mentioning that Lego executives likely held this same opinion because they entered the video game arena for a short period of time. Unfortunately, it was an unsuccessful endeavor, mainly due to tremendous competition in online gaming.
In an effort to find a strategic solution to the increasing problems facing the brand, Lego executives chose to downsize by closing some of their theme parks and retiring product lines that never achieved the anticipated success. Lego maintained it’s top selling products and remained in partnership with brands like Harry Potter, Disney and Star Wars. Today, some of the most popular Lego sets include Harry Potter and Fantastic Beasts Collectible Minifigures, Hogwarts Castle, Rough Terrain Crane, Ninjago City Docks and X-wing Starfighter.
Lego continues to partner with other brands, but in a way that’s far more strategic. It’s as if Lego has decided to embrace the original mission of Ole Kirk Christiansen; quality products that allow children to be creative. Now known as Lego Group, the brand is constantly evolving in order to maintain its reputation as a global and highly respected company.