In 2004, Lego was on the verge of bankruptcy. Sales were tanking, and the company’s future looked grim. Jørgen Vig Knudstorp took the wheel of this sinking ship and, miraculously, not only kept it afloat but sailed it into some highly lucrative waters. What was his secret?
Sitting in his office in Billund, a town of some 10,000 people in Denmark, former McKinsey consultant Knudstorp puts much of Lego’s recovery down to refocusing the business on its core strengths.
Before Knudstrop’s arrival, Lego had sought to exploit the popularity of its brand by moving into areas such as clothing, video games and baby products but racked up huge losses after they failed to sell.
“It has been a process of getting back to what we are all about, which is putting two Lego bricks together, tossing them in the air and seeing that they don’t fall apart,” he says.
That seems like a simple and obvious solution. If you make plastic bricks, make plastic bricks.
Which is why this guy perplexes me.
I like Lego as much as the next guy. In fact, I think I’ve demonstrated that I like Lego far more than the next guy. I admit, I’ve enjoyed the Lego videogames and look forward to the Lego boardgames. I have a Lego t-shirt. But a Lego flashlight shaped like a minifig whose arm you crank to make his feet light up? Is this really a “core strength”?