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Citizen Brick is a company based in Naperville, Ill., that makes custom Lego figures and sets.
In response to the war in Ukraine, the company designed a figurine made to look like Ukrainian President Volodymyr Zelenskyy in his familiar military fatigues.
With sales of the figurine and a Lego toy Molotov cocktail sold separately Citizen Brick was able to raise more than $186,000 in March for Direct Relief, a charitable agency providing medical assistance in Ukraine.
The claim often made for Lego being the greatest toy ever invented derives mostly from its remarkable versatility. It can rise to almost any occasion.
While laid off during the COVID-19 lockdowns, Glenn Waddingham, a veteran bellman at the temporarily shuttered Chateau Victoria Hotel in the B.C. capital, used more than 62,000 Lego bricks and figurines to recreate the hotel.
Waddingham’s intricate replica, authentic down to the Lego figurine guests sunbathing on the hotel’s balconies, was completed last month and now graces the hotel’s lobby.
The triumphs and travails of Lego A/S, which celebrates its 90th anniversary this year, are widely instructive in business enterprises of all kinds.
The company was born out of adversity when Danish carpenter Ole Kirk Kristiansen turned to making toys after carpentry contracts ran dry during the Great Depression.
Lego later gained prominence in the wider European market after shifting from wooden to plastic-molded toys.
Its big breakthrough came in 1958, when Lego was among the first to mass-market interlocking toy building blocks that underpin the company’s global success today.
At that time, alas, Lego also provided the world with one of the most painful toys to accidentally step on.
But in the early 2000s, by which time Lego was the world’s fourth-largest toymaker, the company nearly slipped into insolvency. It lost money in four of the seven years between 1998 and 2004.
A complacent Lego had lost touch with its market.
Lego neglected core products including Duplo, Technic and Mindstorms — all now major profit centres for Lego — in order to chase fads that often bombed.
As part of its make-or-break turnaround, Lego sold off non-core assets, ending an ill-advised diversification into theme parks, clothing, computer games and other distractions that blurred the brand’s image.
In reinventing the company, Lego also slashed its supplier count of more than 11,000 by 80 per cent and streamlined its unwieldly manufacturing processes and distribution system to gain long overdue efficiencies.
A Lego that prided itself on the creative freedom of its artists had to retrain them to invent products not only with lower production costs but consistent with the new capabilities of its reinvented supplier and distribution networks.
And in a precursor to today’s “in-sourcing” trend, Lego also repatriated manufacturing and parts supply from far-flung low-wage jurisdictions to facilities close to its customers. That cut delivery times to retailers demanding “just in time” deliveries to keep their inventories low.
Lego’s now robust supply chain has enabled the firm to keep growing during the current supply chain crisis. Lego managed to post revenue gains in 2020 and 2021.
Today, Lego is the world’s biggest toymaker, with 832 stores in 130 countries. Its employee count of 24,000 is almost five times higher than at the nadir of Lego’s fortunes in 2006.
Lego earned a profit last year of $2.4 billion on sales of $10.1 billion, an enviable return on sales, which were up 27 per cent from 2020.
The firm remains headquartered in Billund, Denmark, where it was founded. It is still a private company, controlled by descendants of the founder.
Lego’s usefulness extends beyond toys. Lego is used in a growing number of medical, commercial and research applications. And for decades it has been a tool in strategic management training programs.
As a therapeutic tool Lego play has been found to improve social interaction in children with Autism and in elderly adults with cognitive disabilities.
Lego leaves those activities to others, focused solely to making products based on the interlocking bricks it invented 64 years ago.
Today’s Lego understands its market.
Lego caters to its enormous fan base with tubs of assorted bricks that appeal to purists, often adults, who prefer to let their imagination alone determine what they will build.
Lego also profits from themed sets, based on Batman comics, Star Wars movies and Ferrari sports cars, to name a few.
And its Duplo bricks capture the lucrative preschooler market, while its chip-enabled Mindstorms sets for older children appeal to a generation of kids raised on video games.
The Lego story is a lesson in how to continue thriving from a 64-year-old invention — Lego’s interlocking bricks.
And the firm’s arduous turnaround is a cautionary tale for any company now coasting on past success.
Lego’s legacy also includes its decades-long accumulation of goodwill from making a consistently excellent product.
With that goodwill, the odds are favourable in being granted a second chance. A chance, in this case, to achieve greater and more sustainable success.
Clarification — July 7, 2022: Lego was among the first to mass-market interlocking toy building blocks. A previous version of this file said Lego invented the system of interlocking toy bricks.
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