From Bricks to Billions: How LEGO Dodged Bankruptcy and Crushed the Game
In today’s intricate business landscape, understanding and applying the concept of systems—a pivotal element of Endsley’s model of situational awareness—can be a cornerstone of your strategy.
Here’s why you should pay attention:
Beyond the numbers: delve deeper into the world of social media. It’s more than just rising user counts; it’s a nexus of motivations and technological interplay.
From sky to ground: discover how fighter pilots’ strategies aren’t just about aerial prowess but are grounded in systems, offering vital takeaways for businesses.
Customer connections: recognizing what drives your customers can make all the difference. We’ll explore a tool that can help you see through their lens.
In this article, we unpack these concepts using the case study of Lego, equipping you with tools and insights to bolster your business comprehension.
The rise of social media
Take a moment to think about the meteoric rise of social media platforms. On a superficial level, many businesses marked the uptick in user engagement. But there’s a substantial difference between noting a trend and comprehending its intricacies. Why did these platforms become indispensable in our lives? Was it the yearning for human connections on a global scale or the dopamine rush from every like, share, and comment? Identifying these undercurrents meant businesses could craft nuanced strategies, directly touching the very nerve of what keeps users engaged and returning.
The importance of systems
Now, shift your focus from the buzzing world of social media to the open skies. Fighter pilots, epitomes of SA, aren’t just winging it alone. A labyrinth of interconnected support buoys their seemingly autonomous decisions. The intricate dance between the pilot, the advanced machinery of the aircraft, and the command centre on the ground exemplifies coordinated SA. Whether human intuition or raw data, every piece feeds into a holistic understanding, guiding life-or-death decisions miles above the earth.
This intricate synergy isn’t restricted to high-flying jets. Businesses, too, have foundational systems — their business models. More than just operational blueprints, these models are like the company’s neural network, transmitting information, ensuring harmonized operations, and fostering a shared situational insight. A meticulously crafted system empowers a business to lead, enabling it to react to changes and anticipate shifts, creating ripples instead of merely adjusting to waves.
But here’s the catch: a business’s ecosystem isn’t complete without its customers. And true SA mastery? That means delving into the labyrinth of your customer’s psyche. Here, tools like the empathy map transition from being handy to essential. These tools unlock insights into the preferences, motivations, and pain points of those you aim to serve.
Lego’s turnaround
Let’s look at the iconic case of the Danish toy behemoth, Lego, to understand the value of sound systems.
The early 2000s were a turbulent time for Lego. On the verge of bankruptcy, the company faced a paradigm shift in the toy industry driven by electronic toys and video games. But was it the end? Far from it.
Lego’s first move was to instate a committed innovation team. This team brought to life themes such as Lego Friends and Lego Ninjago. These weren’t just new sets but portals inviting a wider demographic into the Lego universe. Beyond physical sets, the company made headway into the digital arena—launching mobile apps, online games, and the Lego digital designer platform, where aficionados could create and share their custom Lego visions.
In an era of complexity, Lego chose simplicity. Trimming down its overwhelming product line, the company honed in on what made Lego... well, Lego. The focus reverted to the foundational Lego brick, adding versatile pieces that promised endless creative opportunities.
Strategic partnerships with giants like Disney and Marvel also marked Lego’s resurgence. This move saw our favourite cinematic moments crystallized into Lego sets. Collaborations extended beyond corporations; they reached out to the real Lego aficionados—the customers. The launch of Lego Ideas, an online community platform, enabled Lego enthusiasts to design, vote, and bring to life community-inspired sets.
Come 2016, from the shadows of bankruptcy, Lego emerged as the world’s premier toy company—capturing a 26% global market share. A year later, they reported a staggering $5.8 billion in revenue.
Lego’s phoenix-like resurgence wasn’t just a result of innovation or partnerships—it was the consequence of a robust system. A system that didn’t just identify problems but discerned the underlying currents of a shifting market. By repositioning its core product, Lego demonstrated how a solid, adaptive system can navigate and neutralize the most wicked problems.
Systems: a three-dimensional compass
To sum it up, the systems element of SA goes beyond mere data collection. It’s about curating a vivid, holistic picture from disparate data points. It offers businesses a robust compass to steer through uncertain terrains and emerge as leaders.
When faced with near extinction and acutely aware of your situation, how do you pivot in business?
Take a cue from Lego. Faced with the tidal wave of electronic toys in the 2000s, they revamped their system—innovated with new themes, simplified to their iconic brick, and collaborated with giants like Disney. But most importantly, they listened—to fans, trends, and the market. By 2017? A revenue of $5.8 billion.
Lego’s resurgence shows the power of an adaptive, responsive, customer-centric system tuned to their situation. It’s not about avoiding storms but learning to navigate them in business.