Lego: Building On Open Innovation Brick By Brick

Posted by jartese on Nov 1, 2013 3:17:42 PM

In-house design and development is a common way to maintain complete control over your product. It does have its down-side, however. Unless you're willing to hire new blood for fresh ideas, things tend to stagnate. Products start to conform to a company standard of appearance, function, design, etc., until it seems that there is no room for bold, fresh ideas.

One way to avoid the doldrums is to adopt a policy of open innovation, the farming of ideas from outside of your organization. Companies sponsor competitions, such as General Electric's "Ecomagination Challenge", to tap one of the greatest resources for ideas there is, the general public. Others may maintain contact with a specific resource base, such as Hewlett Packard's collaboration with researchers and entrepreneurs in government and business in a constant quest to produce superior products.

One fortunate corporation, however, has open innovation built right into its product. Founded in 1932 and still held by the Kirk Kristiansen family, Lego has appealed to the imagination of children in over 130 countries. With about 10,000 employees, it is the world's second largest toy manufacturer, recently overtaking Hasbro and now topped only by Mattel.

A good part of Lego's success is its openness to suggestions from its primary customers, the children who grew up snapping little plastic bricks together since 1949. By marketing a toy whose primary purpose was to foster imagination in young minds, that investment was returned in spades as those children went on to become artists and engineers, many of whom continued building more and more elaborate models. Some of them even modified existing bricks to bring their plastic dreams to life.

Lego artists and engineers have built everything from readily recognizable world capitols to elaborate examples of spaceships and vehicles from science fiction movies, and Lego has not let this opportunity pass by. Creating sets based on popular movies such as "Star Wars" and "Lord of the Rings", the popularity and relevance of the little plastic brick has never been in doubt. Fairly recently Lego sought to break free from it's pigeon-holing as a "boys' toy" to include Lego Friends, a series of construction sets aimed at girls and including bakeries, houses, forests, and other sets aimed at pre-teen girls.

Lego's most recent tapping of the minds of its enthusiasts is the Lego CUUSOO program. CUUSOO is the Japanese arm of Lego and it holds a quarterly competition in which Lego artists build, design, and submit their models and plans to CUUSOO. The Lego artist community examines and votes on which models they like best. After 10,000 votes are accumulated, Lego reviews the qualifying models and selects one grand winner. The designer of the model will then receive design credit and 1% of the sales for that model. Among the models currently being voted on are the DeLorean from Back To The Future, traditional Japanese-style pagodas, and a series of detailed exotic birds. These models demonstrate to the world the rich resource that is the public's imagination.

Through open innovation, Lego has been able to withstand even the worst of economies. Now seated in the #2 spot, it is quite conceivable that, with its business plan of listening to artists and designers from all over and from exploring traditionally non-toy markets (a modular Apple store is on the CUUSOO site), Lego may soon overtake toy legend Mattel.

Watch out for flying bricks, Barbie.

Topics: Innovation Insights

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