Even in the face of global financial crisis, the rebound strategy followed resulted in incredible growth. From 2007 to 2013, LEGO displayed a 24% growth in sales.
Much has been written about LEGO and many explanations have been given for its fall and upturn. Some gave emphasis to the discipline and limits its innovation culture required, while others discussed the qualities of its different leaders.
We at THNK postulate that in the end, it is all about the brick – it is all about the concept of a modular system both for its users to endlessly recombine, as well as for the company itself to maintain synergies in development and production. A modular system enables independent portfolio development without added costs. It also allows for consistency, by maintaining a portfolio of related products, as well as allowing for efficiency, by avoiding one-solution-fits-all common platform.
Practically speaking, actualizing a modular system is a two-plus-one-steps process that starts by defining your value proposition; namely, by making a clear, creative and simple statement of the benefits your organization provides to your customers. The second step involves separating your value proposition into independent parts or modules that can be treated as logical units and can interoperate. It is therefore important that the modules display similarity and one-to-one correspondence between their physical and functional architectures. Once a modularized design of the value proposition is introduced, stepping into the final phase of continuous development is what remains. This final phase entails experimenting with various combinations of the basic elements and introducing new lines of products and services.
The lesson learned from LEGO’s story is that creating the conditions that allow for infinite possibilities is indeed attainable. Let LEGO inspire us to create a modular system; providing products or services that our customers can recombine and base our products on common components that can be reconfigured.