How Lego Reinvented Themselves Using Strategies of Digital Transformation
1) They committed to drastic changes
Lego had never been a company afraid of taking risks, and this is likely why they were able to reinvent themselves so successfully. They gave themselves an honest appraisal, and made sweeping changes throughout the organization, shaking up everything from internal processes to their product lines.
2) They analyzed the data
Data is one of the most important aspects of digital transformation. Decisions based on objective data are nearly always better than decisions based purely on subjective views or impulses. There was a period when leaders at Lego were blaming the popularity of video games for their lost revenue, but this was a misdiagnosis.
When they looked at the data, they could see that the vast majority of their sales came from their non-electronic line of products. The blocks weren’t the problem. This same analytical approach was applied to their supply chains. A great product doesn’t mean anything if producing it is losing money for the company.
3) They worked with their competition
Working with competitors is vital to digital transformation. The digital age has changed the ways that consumers interact with brands. Many brands have harnessed the spirit of collaboration that the ubiquity of social media has brought about, and pooled their resources to launch creative ventures together.
Lego partnered with other franchisees in the toy industry. Brands like Harry Potter, Star Wars, and Batman were competition for toy sales, but Lego made their competition their collaborators, and licensed characters from these franchises to create exciting new Lego toy sets.
4) They innovated by looking at complementary markets to enter
5) They had a solid vision for what their brand was about
When Lego ran into financial trouble, and they started bringing in outside consultants to help them identify where they’d gone wrong, they found that a big part of the problem was that they’d strayed too far from their own philosophy. From the very beginning, Lego’s vision had been all about helping kids play. When they remembered to be true to this philosophy, everything else fell into place.
Lego is a disruptor and an innovator.
They embrace change, and this is key to a total digital transformation in any company. They know what their vision is, but they also listen to their customers and pay attention to market trends. They look to collaborate, instead of competing.
By looking at the steps that Lego took to turn it all around, any company can start to lay the framework for their own digital transformation.