Stuffed Crocodile

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Tag Archives: economy

David Robertson: Brick by Brick

Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy IndustryBrick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry by David Robertson
My rating: 3 of 5 stars

In the mid-2000s Lego was the bestselling toy manufacturer in the world.
It also was on the verge of bankruptcy.
This was a surprise to everyone, most of all Lego’s management.
It took the work of a group of talented analysts to convince them that while some of their recent business decisions were quite successful to say the least (Star Wars, Harry Potter, and Bionicle), altogether the company was losing money on developing and even selling their products.

In the ’90s, when action figures and computers became all the rage in the toy industry, a few bad numbers had convinced Lego’s management to take a new direction. Old people with insitutional knowlege were let go, new people with the best, but often unrelated, qualifications were brought in. Multiple new development units had been created that were not providing any benefit to the company. New toys were created that did not really fit with the Lego brand.
Some created that were successes, like the buildable actionfigure line Bionicle, or the robotics supplement Mindstorms, but others fizzled out unloved and unlamented. A media tie with a TV series and action figures that could not interface with the usual Lego bricks was a non-starter. Classic Duplo bricks were replaced with non-brick toys. And sets started to become filled with specialized parts unusable for other models, but costing enormous amounts of money to produce.
In the end the company arrived at a point where many sets cost more to manufacture than they retailed for, while management was unaware of any issues, not talking to each other.

Spoiler: it helped that they went back to their roots and started creating high-quality, well-designed brick toys again.
Who’d have a-thunk?

This book is about the history of Lego and how they first became famous and successful, but it mostly is about the business decisions that lead to their near-collapse, and what the company did to turn itself around. This means this book has a lot of interesting parts about the company itself and the philosophy that drives it. It also has some long and astute observations about business decisions that are analyzed in how they can affect a company, and how they actually worked out for the company in question.

Unfortunately this is also where the book loses its impact. Maybe it is the fact that I am not an economist, but some of the analysis seems long-winded, overly-laudatory, and oddly contradictory in places. Some of the elements seem to come out of the blue with no explanation (e.g the first time we hear about the success of Bionicle is in the chapter about Bionicle). Sometimes economic jargon is used with no explanation whatsoever. This doesn’t make the book unreadable, but it lost my interest about 3/4s in, when nothing really seemed to happen anymore, and I had to force myself to go on reading. I think the main problem is that while the topic of the book could be framed as an interesting story, after about the half-way point the author just seems to fill it with descriptions of how all those new and awesome product lines were developed.
Definitely interesting in parts, but drags.

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