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In Brick by Brick, David Robertson takes readers inside the world of Lego

How Lego rewrote the rules of innovation and conquered the global toy industry

BRICK BY BRICK: How LEGO Rewrote the Rules of Innovation and Conquered the Toy Industry

David C. Robertson

Imprint: Crown Business
On sale: June 25, 2013
Price: $26.00
Pages: 320
ISBN: 9780307951601

Contact: Ayelet Gruenspecht
212-782-9016
agruenspecht@randomhouse.com

“A fascinating book. The story of how Lego came perilously close to disaster but then transformed itself into one of the most successful and innovative companies in the world serves both as an inspiration and an object lesson.”

– Chris Anderson, former Editor-in-Chief of Wired and author of Makers and The Long Tail

“Robertson’s entertaining, informative, and fast-paced account of LEGO’s rise, fall, and subsequent victory in the marketplace will have readers rooting for the survival of the little brick.”

– Publishers Weekly, starred review

With the possible exception of Apple, arguably no brand sparks as much cult-like devotion as LEGO. With the invention of a single plastic brick in 1958, LEGO created a world of endless possibilities for imaginative fans everywhere. Fast forward to 2013, and LEGO remains one of the world’s most profitable and fastest growing companies.

What most people don’t know is the incredible story behind this beloved brand. How just 10 years ago, the iconic toymaker was on the brink of bankruptcy, destroying economic value at the rate of half a million dollars per day, and just months away from insolvency. In BRICK BY BRICK: How LEGO Rewrote the Rules of Innovation and Conquered the Toy Industry, Wharton Professor of Practice David Robertson reveals how LEGO grew from a small woodworking shop in a tiny Danish town to become one of the most beloved global brands of all time – and in the process creating a blueprint for the most effective ways to innovate, lead and win.

Founded in 1932 by Danish carpenter Ole Kirk Christiansen, the company’s imaginative approach to play helped it create toys that consistently delighted both kids and parents – kids loved LEGO because it was fun, and parents loved it because it was educational. But in 1999, as the digital revolution changed the nature of play, LEGO’s leadership responded by rolling out an ambitious innovation strategy, following all the “seven truths” of innovation. The result was wild fluctuations in performance, hitting new highs in 1999 and 2001, followed by near-bankruptcy in 2003 and 2004. In 2004, then-CEO Kristiansen fired the President and put a young ex-consultant named Jørgen Vig Knudstorp in charge. One by one, Knudstorp and his new leadership team reinvented the seven truths of innovation, synthesized them into a world-class innovation management system, and pulled off one of the most astounding business turnarounds in recent memory. And they did it not by breaking with convention, but by innovating “inside the box.” Along the way, they built a clear-eyed framework for guiding every kind of innovation effort – one that is much more transferrable than the precedent-breaking systems of innovation renegades like Apple and Google. The result? In 2012, Net income rose 35 percent to a record 5.61 billion kroner (almost $1 billion), making it the best year in the company’s history.

Because of its ability to innovate, LEGO has become the world’s most valuable toy company. It has grown sales at 24% per year and profits at 40% per year, every year for the past five years, all while operating without patent protection in a viciously competitive global market. LEGO’s success in the face of these challenges is all the more dramatic, given the rocky road the company has traveled in the past decade.

As the LEGO Professor at IMD in Switzerland, Robertson was given unprecedented first-hand access to the famously insular company. He has toured the factories that produce billions of bricks each year, watched designers dream up new toys, and interviewed the company’s top executives – including the CEO, Jørgen Vig Knudstorp and the Chairman, Kjeld Kirk Kristiansen (the grandson of the founder of LEGO). His unique relationship with LEGO gave him deep access into the company, while maintaining the objectivity necessary to provide an unbiased view on what LEGO does well and poorly.

BRICK BY BRICK is more than a behind-the-scenes look at a beloved brand; it’s an invaluable blueprint of the most effective ways to innovate, lead, and win. In the book, Robertson reveals:

The grueling years of failed attempts that led to the invention of the plastic brick in 1958, followed by the hit-after-hit toys of the next four decades

How the seven key elements of LEGO’s growth strategy from 1999 to 2003, driven by the business world’s most popular innovation strategies, nearly ruined the company

How the new leadership team pinpointed the root cause of LEGO’s problems – an overly aggressive approach to creating distinctive new offerings, with no overall guidance of the innovation process – and then created an innovation management system for consistently inventing new toys.

Why certain innovation attempts – like LEGO Universe – failed spectacularly, while others – the Bionicle action figures, Mindstorms robots, Ninjago spinners, and LEGO Games – became instant successes

Robertson’s insider’s tale of the LEGO journey includes remarkably candid insights and critiques from the company’s leadership, employees, designers, and biggest fans. Robertson not only gives readers a rare glimpse into how an 80-year-old company built a beloved brand, lost its way, and reinvented itself; he also draws out the lessons that will guide leaders in their own efforts to improve their organization’s innovation.