Legos are a household name, and treasure, but not an overnight or no-brainer success.
Originally a "wooden toy" company, Legos are known the world over as the "clickable brick toy" company. Today they have a vibrant brand with lucrative and varied product lines and licensing arrangements with popular franchises such as Star Wars and Harry Potter.
The decision to license was not an easy one for the Lego company but it soon led to substantial revenue and profit. While solid performers, those licensing deals were like sugar-highs. They provided cash but would fade in between movie releases.
In the early 2000's Lego decided that they would bring in "professional leadership" and strive for the ambitious mission of becoming the "kid's favorite company" as they expanded into numerous markets -- all at once. They heavily invested to innovate, but without a good handle on "how to innovate", they rapidly spun their wheels and wasted resources. Seems hard to believe that the "creative" folks at Lego would struggle to innovate, but this unbridled innovation lead to near bankruptcy.
Can you imagine Lego running out of money? Preposterous!
The company that brought Lego bricks to every corner of the world, and even the International Space Station, nearly failed in a big way. Of course, they had an asset so even if they failed, the brick would likely survive with a more mature firm gobbling them up. Thankfully, Lego managed to survive but not without some substantial course-correction.
It is a sobering thought for those of us with the ambition to build a great company to think that Lego could struggle on that scale. Our world is so full of "survivor bias" -- we read about the winners and rarely hear about the not-winners. Personal note: I don't really care for the term loser in the context of starting and running a legit business. It takes guts, grit and a whole bunch of other things to start and run a company, particularly one with lots of customers and employees. Lego's journey is notable for those of us who "have an idea" and think that an idea unto itself will lead to fame, fortune and fun. Building and sustaining a company is really hard work. Starting is *easy*, that's just the beginning of the work.
Brick by Brick takes us along on the roller-coaster experience of the Lego company with successes like Mindstorms, Bionicle and Ninjago along with their struggles with lego stores, theme-parks, clothing lines as well as numerous false-starts in the digital world including Lego Universe. A large factor driving the ambition for innovation was the threat of "digital". That threat led to an undisciplined and unmeasured response. Getting back to their core and working on adjacent opportunities brought them back to solid ground. In fact, their first objective was to simply "operate" not "innovate" for robust good health. From that position of stability, and continuing to strive, Lego advanced to the company we know (and largely love) today in 2022.
Over the course of fifteen years or so, Lego learned to innovate consistently, bringing numerous successful products to market, gaining financial success and becoming a world-class brand.
I can be guilty of finding Goldratt's "Theory of Constraints" under every rock, however some of Lego's best outcomes came about when resources were constrained, the team size intentionally limited, and a set of meaningful guardrails introduced. Some of those guardrails included setting minimum ROI targets (13%) and revenue targets (come up with an idea which can become 10% of company revenue). These constraints helped the product teams avoid big bets on low-potential product concepts. The ROI targets also drove them to do what every "lego kid" the world over does -- find awesome uses for "the brick". Inspiring real-world experiences and brand-new fictional stories are examples -- Lego architecture kits and Lego games are products which drove into adjacent sales channels yet relied upon the "core" of "clickable bricks" which were extremely low cost to produce.
The book is an enjoyable and quick listen, particularly for anyone who has grown up with legos, (may or may not) still have an embarrassingly large collection of them ,and for the parent and coach of 9-16 year old kids competing in First Lego League. I guess that would make me a closet AFoL (Adult Fan of Legos).