Lego's shift from the abyss to the saving grace of Co-Creation
"Lego was hemorrhaging cash after several years of increasingly heavy losses. By January 2004 LEGO had a deficit of Dkr1.4bn (£144m). And its debts amounted to more than Dkr5bn. There was even speculation that the Kristiansen family would be forced to sell, or large parts of it, to an all-American, plastic-fantastic interloper such as Mattel. All Denmark mourned.
So what happened? The LEGO people got medieval on looking at the problem – they embraced it and started to understand that that they needed to rethink how they created relevant and valuable products that would sell. They learnt the hard way. Susan Fournier wrote in 1996,
It’s startling how wrong we’ve been in what it takes to cultivate intimate relationships with customers. And alarming how quickly and thoughtlessly relationships can be destroyed through the muddled actions we engage in.
This point was made repeatedly and discussed in the company. They realised they had to listen deeply to their customers, and that together they could co-create a successful future. In fact to to co-create with their most ardent critics – their most ardent and passionate fans.
But to co-create requires trust, it requires knowledge in HOW to engage, and to treat customers as people not as some metric on a slide rule. There are no conscripts in the networked society, only volunteers, said Peter Drucker, and he additionally observed that coercion is a very poor way to inspire people to deliver their very best work.
Today, the Lego System of Play which started humbly as a set of bricks, a few tyres, and some windows has evolved into a goal to integrate physical and virtual play and to create a new operational/commercial model that has integrated its customers into that model via initially the factory.lego.com.
While the rest of the corporate and commercial world slept, LEGO was hard at it learning that there existed a better, more agile, more sustainable, more relevant model for an organisation in today’s world. So we have arrived at a model where customers, are designers, co-creators, who share in revenue. LEGO has connected to and become part of the LEGO community – the LEGO community has become part of LEGO.
And that process is still evolving." (http://www.no-straight-lines.com/blog/lego-cuusoo-the-whats-next-for-business-in-a-non-linear-world/)