Amputate the Empire to Save the Idea

“So Jørgen Vig Knudstorp, in close cooperation with Jesper Ovesen, began working on a new rescue plan. The two completely cut areas like film production and PC games, moved 80 percent of the brick production to cheaper countries like Mexico and Eastern Europe, reduced the number of bricks to 7,000, sold off buildings, sold the majority stake in the theme parks to Merlin Entertainments Group and the private equity fund Blackstone Partners for 2.8 billion kroner, and made the budgets financially transparent so it was visible exactly where money was being made and where it wasn’t.”

““LEGO is an idea-driven company. It can be difficult to hold onto an idea. But the idea becomes stronger when you concentrate. If you spread yourself too thin, you lose your identity. Companies usually don’t die from hunger but from indigestion. You need to grow and grow, and then you start to dilute the brand. LEGO found itself in an identity crisis. When you expand on as many fronts as LEGO did, there is a tendency to forget the core business. The values had been hollowed out at LEGO. Management had become a process-oriented culture with steering groups and the like, where everyone was involved and everyone had a say, but no one felt responsible. I said that now we have to make tough decisions and become clear on where the responsibility lies,” says Jørgen Vig Knudstorp.”