Brick by Brick Book Summary - Brick by Brick Book explained in key points

Brick by Brick summary

Name: Brick by Brick
Rating: 4.6 (10 reviews)
Author: David Robertson with Bill Breen

David Robertson with Bill Breen

How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry

4.6 (10 ratings)

18 mins

Brief summary

Brick by Brick by David Robertson with Bill Breen chronicles the history and success of the LEGO Group, analyzing the strategies used to build such a profitable business. Through insightful anecdotes, this book provides insights into the importance of creativity, innovation, and perseverance.

Topics

Leadership Innovation Memoirs Strategy

Table of Contents

Brick by Brick
Summary of 10 key ideas

Audio & text in the Blinkist app

Key idea 1 of 10

What’s in it for me? Manage innovation intelligently by following LEGO’s example.

In today’s rapidly changing, hypercompetitive economy, innovation is a crucial ingredient in the recipe for long-term success. Companies that are unable to innovate demonstrate a rigidness that causes them to snap under the pressure from market changes, and long-term success often means showing a willingness to be creative.

However, as you’ll soon find out, innovation can be both a blessing and a curse: the radical, unchecked innovation that we often hold to be so inspiring sometimes comes with a lack of focus that can cause an entire business to unravel before our very eyes.

Such was the case with the famed Danish toy company LEGO. But as you’ll find out in these blinks, the lessons learned by the LEGO company in their turbulent quest to balance innovation and their bread-and-butter would prove crucial to their long-term success. Not only that, but these lessons can be applied to any business model that aims to produce controlled, measurable innovation.

In these blinks, you’ll find out

what led to LEGO’s near-bankruptcy in 2003;
why it’s sometimes better to think inside the box; and
why LEGO hires T-shaped people.

LEGO’s initial success resulted from shifting focus from creating individual products to developing a system of play.

Everyone has heard of LEGO. You probably even grew up playing with those distinctive, multi-colored bricks in your home! But have you ever thought of LEGO as the multinational corporation behind the bricks – an economic force to be reckoned with on the world stage?

Founded in 1932 by a former carpenter named Ole Kirk Christiansen in the small town of Billund, Denmark, LEGO (which roughly translates from Danish to “play well”) originally specialized in building wooden toys for kids.

Kirk followed a principle of constant innovation, so it’s no surprise that the LEGO company was the first toy company in Denmark to experiment with plastic toys.

LEGO’s big turning point would come when Kirk’s son, Godtfred Kirk, followed the advice of one retailer, who suggested he build an entire system of play rather than building individual products. As a result of that discussion, Godtfred decided to scrap the vast majority – 90 percent – of LEGO’s portfolio to focus on what would become one of the most iconic toys of our time: the interlocking brick.

This new unified toy-production system meant that a brick from one set was compatible with bricks from any other set. This meant, for example, that kids could combine LEGO model buildings from one kit with LEGO model cars, streetlights, traffic signs and train tracks from other kits, allowing kids to create all kinds of interesting, novel contraptions.

Decades before the rise of Apple’s suite of connected i-branded products, LEGO had taken a holistic approach to its product portfolio, linking everything together via the ubiquitous brick.

Not only was LEGO’s new system fun; it also allowed LEGO to increase its share in the market and opened up a whole new world of product development.

By the late 1990s, the LEGO company was a booming business facing a crisis.

Like every company, LEGO has seen its fair share of ups and downs. The period between the late 1970s and mid-1990s are now considered the “golden age” for LEGO’s sales.

The invention of LEGO’s modular brick was akin to striking gold. In 1991 the company saw an 18-percent jump in sales, despite the meager four-percent growth in overall toy sales that year. By the mid-1990s LEGO had grown into a group of 45 companies on six continents with nine thousand employees.

LEGO’s attempts at innovation in the 1990s severely backfired, leaving the company on the brink of bankruptcy.

In the mid- to late-1990s, LEGO was in trouble. So, in 1998 they finally brought in an external consultant to help develop new innovation initiatives and turn the company around.

Exploring new directions to take your company is fine and good, but as LEGO quickly learned, haphazardly investing in various innovative approaches can weaken the brand overall.

Innovations ought to grow organically out of the culture and history of the company.

So what did LEGO do to turn things around? It became clear that one of the major problems with LEGO’s initial push for innovation was that it had lost focus, thereby alienating core customers and straying from the company’s area of expertise.

Thus, the very first corrective measure that management took was to scale back its expansion into adjacent industries.

Tighter focus allows for more productive innovation.

LEGO’s initial innovation efforts weren’t only problematic because they strayed from the brand – they also faced dismal returns on investment.

In order to focus development, LEGO management began tasking development teams with producing ideas that were not only innovative, but also profitable.

Innovation should take place within a structured process that allows for development at different levels.

Explosive diversification wasn’t the only mistake LEGO made in their frantic attempt to turn things around. In their push for innovation, they also lost the balance between nurturing their core product and developing a diversified portfolio.

As you now know, LEGO moved too quickly, and in the process gave preference to costly top-line ventures with high start-up costs while neglecting the very product that captures LEGO’s essence: the brick.

When fostering open innovation, develop a set of direction-setting tools, then get out of the way.

Crowdsourcing is among the most powerful strategies available to corporations in our Internet Age. One of LEGO’s many successes is the way it managed to create a framework with which to harness the innovative potential of its fanbase while avoiding the often unruly consequences of crowdsourcing.

When engaging in open innovation, LEGO sets a fixed direction, but stays flexible in the execution. For instance, when developing its customizable robot line Mindstorms NXT, the company turned to its hard-core adult fans, many with backgrounds in robotics.

Collect a diversified team of “T-Shaped People,” counterbalanced by a focused group of managers.

By this point, we’ve focused mostly on how LEGO altered its product and innovation strategies to ensure success. But how has LEGO’s restructuring affected its recruitment and management strategies?

LEGO now recruits what some call T-Shaped People: individuals who combine an expertise in a particular area (the vertical leg of the T) with a broad knowledge extending across various other disciplines (the crossbar of the T).

Every innovation makes a difference, even the small ones.

When people think of innovation, they often think of revolutionary ideas that completely change the way the game is played forever.

The go-to example for this is the case of Steve Jobs at Apple, whose radical ideas such as the iPad and iPhone literally changed the way we go about our daily lives.

Sometimes the best strategy for growth is not thinking “outside the box.”

When you’re stuck in a rut, it seems like the one thing everyone will tell you is to “think outside the box.” But as LEGO has shown us, sometimes it’s better to stay inside the box, and use these limitations to your advantage.

When LEGO thought “outside the box” in the late 1990s, the results were disastrous. LEGO’s misadventure actually demonstrates the innate danger of “out-of-the-box” thinking: when all of the focus is on creativity, companies can easily lose sight of what brought them their initial success in the first place.

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What is Brick by Brick about?

Brick by Brick looks at the failures and ultimate success of one of the world’s most beloved brands: LEGO. By examining the management strategies that brought LEGO back from near-disaster, Brick by Brick outlines how innovation can be managed responsibly.

Best quote from Brick by Brick

The result [of LEGOs innovations efforts] was a cascade of runaway innovations that either bombed or imploded.

—David Robertson with Bill Breen

Who should read Brick by Brick?

Anyone who played with LEGOs as a kid
Business leaders looking to yoke their innovation efforts into a coherent system
Anyone interested in how LEGO almost collapsed, but came back stronger than ever

About the Author

David C. Robertson is a former McKinsey & Company consultant who currently teaches at the Wharton School of the University of Pennsylvania.

Bill Breen is a founding member and senior editor of Fast Company in addition to the co-author of The Responsibility Revolution and The Future of Management.

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