Bob's Gutsy Leadership Blog

The Lego Turnaround – Quality Listening is Essential!

Lego was founded in 1932 by a carpenter selling wooden toys.  In 1947 the products were changed to plastic, and Lego launched the classic interlocking bricks.  It quickly became a kid’s favorite because of its invitation to imagine and create.  In the 1980’s and 90’s Lego began to struggle, primarily due to the fact that it had not added anything of interest to its portfolio of products.  Basically, the interlocking bricks had been around for decades and it was still just a package of interlocking bricks.  By 2003, Lego was in big trouble.  Sales were down 30% year-on-year and it was $800 million in debt.  The company was virtually out of cash and in 2003 it lost $300million. 

Fortunately, in 2004 the company brought in a fresh CEO who first launched a big cost cutting effort to clean up the sloppiness, but most importantly he launched what has been described as the biggest ethnographic study of children in the world.  He called it “camping with the customers.”  Lego product people spent a huge amount of their time travelling around the world, talking to kids and their families and listening intently to their comments and ideas, watching how kids play on their own and with friends, and why some toys remain their favorites.

The kids loved Lego bricks, but the product folks learned that kids needed a regular stream of fresh Lego products and ideas to encourage ongoing interest and usage.  This quickly led to develop what turned into a GIANT success; the introduction of a progression of Stars Wars Lego kits, enabling kids to build their own X-Wing /Fighter, Stormtrooper army, TIE Fighter, Armored Assault Tank, and the list goes on and on. Also, they launched the Lego stores, which displayed some amazing Lego creations and sold Lego products.  All this led to an absolute explosion in the business.  Lego quickly started reapplying what they learned, leading to product kits featuring for example, the Harry Potter series, superheroes, and even things like famous buildings ( Taj Mahal, Empire State Building, White House, etc.)

So…what saved Legos.  Regularly listening very carefully to their customers/kids, probing for ideas, and getting their reaction to product concepts.  Stepping back, experts say are the key ingredients in quality listening are as follows:   

  • • Put People at Ease – It is essential to come across as warm, non-threatening, laid-back, and not in charge.  They have to feel they are highly valued and respected.  
  • • Get people talking – Don’t start with a bunch of directives and facts.  Begin with simple questions and requests to understand their habits, ideas, and thoughts.  You should be doing at most 10% of the talking.
  • • Listen carefully – You need to realize that your task initially is to find out how others are viewing things and what things are of interest to them.  You should not immediately react to what is being offered but keep probing and seeking understanding.
  • • Be respectful – Questions need to be asked in an honest, even-handed way, with none of your pre-conceived notions reflected as you probe.
  • • Floating Ideas – Eventually you can steer the conversation toward ideas that you have in mind or have come up during the dialogue, to get reactions and suggestions.  

Quality listening skills are critical to business success, but it is amazing how people, especially those who experience some success, lose interest it what others, like their customers or employees, are thinking! 

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