Overview: LEGO Group launched an Agile transformation of its corporate digital departments in early 2018; this transformation included the introduction of a new digital operating model. The “LEGO IN THE AGE OF DIGITIZATION” case is in two parts. Lego recently defunded its Digital Designer virtual building program. Products like Znap, Primo, Scala and worst; Galidor all came out of this period. The company's revenue grew 7% to 15.7 billion Danish krone ($2.46 billion) in the six months to June 30, compared to the same period last year, which Christiansen said was due to investments in products, e-commerce, and brand paying off. to grow our food. This was combined with a decision to 'retire' a large number of the LEGO Designers who had created the sets from the late 70's through the 80's and into the 90's and replace them with 30 'innovators' who were the top graduates from the best design colleges around Europe. Overview: LEGO Group launched an Agile transformation of its corporate digital departments in early 2018; this transformation included the introduction of a new digital operating model. At the core of the problem was LEGO’s misapplication of digital transformation to both its business model and its operational model. 'will replace those that do not,' IBM executive says, Travel needs to return from April or some airlines might disappear, CEO says, Chinese e-commerce platform Pinduoduo wants A.I. Digital transformation is all about bringing new, innovative tech into your organization, be it AI, chatbots, AR/VR applications, etc. See our Research The letter F. A stylized bird with an open mouth, tweeting. The coronavirus pandemic has sped up the rush to e-commerce and digital experiences, according to the chief executive of Lego, as the company announced double-digit growth in consumer sales. With everything going digital, Lego had to find a way to adapt. Lego's Duplo line is intended for children 1-5 years old and has been around since 1975 (barring a couple brief absences). Lego bricks: before the digital strategy. They don’t create a transformation … The answers can help you revive a digital transformation that is … They don’t put the right change-management infrastructure in place, or they don’t establish a cadence of leadership-oversight meetings. Reaching a tipping point, LEGO started restructuring and digital transformation focused on new revenue sources coming from movies, mobile games, and mobile applications. A leading-edge research firm focused on digital transformation. He tossed series that were wasting money, cut the number of Lego pieces by more than half, and began hiring talented designers who were also passionate fans of the brand (like Stafford), rather than just smart people with impressive degrees. "We've actually been investing quite a bit in … longer-term initiatives around strengthening our product portfolio, making it more diverse, touching more passion points (at) different ages, adding more technology," he told CNBC by phone. Based on a kid's show of the same name, the line was basically an action figure series with awkward features like interchangeable arms for characters. It launched its Monkie Kid sets, based on the Monkey King Chinese legend, in May, and Christiansen hinted other culturally-based characters may be in the making. Yet, as was the case at the end of our discussion on GE in class today, I am left rather perplexed regarding what it truly takes to effect a successful digital transformation … For some reason, Lego decided to revive an obscure line from '79 targeted at young girls. Get this delivered to your inbox, and more info about our products and services. "The entire Lego ecosystem is actually, I think, only at the beginning. … ... Lego Technic Fiber Optic Multi Set (1996) Read on for eight questions to ask about your digital transformation. The Primo offshoot was intended for babies too young to even play with regular Duplo bricks. See our Research ... Lego Designer Mark Stafford, ... Stafford considers the Galidor series to be Lego's biggest failure. [ Culture change is the hardest part of digital transformation. Even for digital-first industries like high-tech, media and telecom, only 26% saw success. One year into the transformation, the impact of the new model is beginning to show in a significant reduction in the time required to respond to change—from months to weeks—in the company’s core … A leading-edge research firm focused on digital transformation. © 2020 CNBC LLC. Data is a real-time snapshot *Data is delayed at least 15 minutes. A leading-edge research firm focused on digital transformation. Part A provides an opportunity to follow the developments of the LEGO Group in the digital gaming arena. This is something LEGO pioneered over many years, which is also the root for its design thinking.” Follow the enterprise cloud tech revolution at The Forecast by Nutanix. The LEGO Group has begun to make latching game in 1932. In terms of the former, LEGO had diversified itself into digital mediums which distracted from its core product offering—the LEGO brick. Unfortunately, though great designers they knew little specifically about toy design and less about LEGO building. Each set in the line featured specialized pieces, which were expensive to produce and in practically no way resembled a Lego product. One year into the transformation… Tags: artificial intelligence, David Gram, digital transformation, lego, Lego's Creative Play Lab, Robotics Digital transformation: The difference between success and failure. since. The LEGO Group had been through earlier business transformations, but the transformation to a digital company posed unique adaptive challenges. Digital also renders distribution intermediaries obsolete (how healthy is your nearest big-box store? And according to the Harvard Business Review Lego, Burberry, Procter & Gamble, and Nike have all ... the most significant barrier to digital projects succeeding is a failure to account for business processes. That leaves companies with a rigid product development ecosystem that can’t handle the next wave of innovation in engineering, manufacturing and service. Lego reported revenue growth of 7% to 15.7 billion Danish krone ($2.46 billion) in the six months to June 30, compared to the same period in 2019. Most organisations are seeking to step up their digital transformation efforts, but history has shown that such efforts can be doomed to failure if they take the wrong approach. Digital transformation … All Rights Reserved. We saw strong growth in digital and traditional play, a rapid shift to e-commerce and the importance of having a truly global operating model," Christiansen said in an emailed release. A look into the tech transformations underway at the world's largest companies. Assuming that “digital transformation” is a one-time event doesn’t address the ever-accelerating pace of innovation. as well as other partner offers and accept our, How Lego Came Back From The Brink Of Bankruptcy. But what is digital disruption and why do companies fail in digital transformation? He is … To make matters worse, Lego even used those highly unprofitable Technic motors in some of the sets. Talk to our friendly LEGO experts online. Sometimes your brand must too. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Failure 1: Glad That’s Over With! Lesson Learned: Times change. Procter & Gamble wanted to become “the most digital company on the planet” in 2012, but ran into growth challenges in a difficult economy. A Division of NBCUniversal. Lego Designer Mark Stafford recently took to Reddit to offer some insight on what went wrong in the first place and how the Danish toy company turned it around. "Many of the major trends shaping our industry, such as digitalization and e-commerce, are accelerating as a result of the pandemic. Michael is a partner at PulsePoint group. The “LEGO IN THE AGE OF DIGITIZATION” case is in two parts. Graham Charlton covered LEGO’s online strategy back in 2012 and he felt that despite the many mentions of Lego on social media and the general affection for the brand, it didn’t seem to interact with its audience as much as some other brands.. Plenty of cash is flowing into digital initiatives at large, industrial companies. For more information on every Lego series — both the good and bad — check out Brickipedia. brickipedia. Lego recently defunded its Digital Designer virtual building program. LEGO : After a period of expansion (1970-1991) LEGO suffered a steady decline (1992-2004) and by 2004 LEGO was close to bankruptcy. Account active CEO Niels B. Christiansen attributed the growth to long-term investments into e-commerce, new toy products and its brand. Lego is set to open about 120 new brick-and-mortar outlets in 2020, including 80 in China by the end of the year, bringing the total number of Chinese outlets to more than 200. Lego Technic Fiber Optic Multi Set (1996) Nike halved the size of its digital unit in 2014 by discontinuing its Nike+ Fuelband activity tracker and some other investments. It’s very interesting to contrast Lego’s more progressive digital transformation to Mattel’s as described in another post. Sign up for Innovation Inc. By clicking ‘Sign up’, you agree to receive marketing emails from Business Insider And that's a long-term journey, that's a 10-year journey … And we're just a couple of years into this," he told CNBC by phone. Nike halved the size of its digital unit in 2014 by discontinuing its Nike+ Fuelband activity tracker and some other investments. Tony Saldanha is president of Transformant, a consulting firm specializing in assisting organizations through digital transformations.During a twenty-seven-year career at Procter & Gamble, he ran both operations and digital transformation … Agile transformation in LEGO’s two large digital depart-ments has improved responsiveness of digital deliveries, and early results show significant improvement in speed of response to change in many … Reaching a tipping point, LEGO started restructuring and digital transformation … It focuses on the “failure” of LEGO Universe, the LEGO Group’s first Massive Multiplayer Online Game (MMOG), versus the success of Minecraft, launched by the start-up Mojang. Although it’s a staggering number, the rate of digital transformation failure hasn’t altered the belief that such efforts are crucial to the future of organizations across the spectrum of industries … For a company which was on the brink of bankruptcy in 2004, the toy maker has made an amazing turnaround. The social and economic upheaval of the last year has shown the value of digital transformation in business. Agile transformation in LEGO’s two large digital depart-ments has improved responsiveness of digital deliveries, and early results show significant improvement in speed of response to change in many areas, from market engagement to digitalization in production. But despite the leaps in technology, Lego's digital transformation is at a relatively early stage, Christiansen said. Subscriber It focuses on the “failure” of LEGO Universe, the LEGO … Procter & Gamble wanted to become “the most digital company on the planet” in 2012, but ran into growth challenges in a difficult economy. With fewer face-to-face services available – and a need to minimise public health risks, digital services are now the default for many. Digital transformation, which is the integration of digital technology into all aspects of a business, is a $1.7 trillion industry and yet 70% of all digital transformations fail! LEGO Digital Designer is a wonderful program. Not only are kids playing with more mini LEGO people than there are human beings on the planet (Delingpole J, 2009) but in 2015, they were nominated by Forbes as the most powerful brand in the world. eBay Failure 1: Glad That’s Over With! The troubles, he said, involved bad management and expensive and unpopular new products. Assuming that “digital transformation” is a one-time event doesn’t address the ever-accelerating pace of innovation. Written by Kate Lindley, Digital services - Transformation - Business Change, Civica The Coronavirus pandemic has brought into sharp focus the need to ensure robust and accessible online services. "The entire Lego ecosystem is actually, I think, only at the beginning. The 'LEGO in the Age of Digitization' case is in two parts. And digital offerings can be reproduced almost freely, instantly, and perfectly, shifting value to hyperscale players while … The "fiber optics" in this this Technic kit are actually clear plastic tubes that connect to a battery-operated LED-light pack. "Serving kids the way we do and having to connect and interact with kids in a world that becomes increasingly digital with all the issues that comes with that in terms of data privacy and creating safe environments for kids, there are many, many, many things we need to invest behind and do and create," Christiansen said. That leaves companies with a rigid … Lego's logo as displayed on a smartphone. … In particular, the end state was less well defined and critical success factors were less clear. Last year companies poured $1.3 trillion into digital transformation initiatives, 70% of which — or $900 billion — was wasted on failed programs at companies like GE, Ford and P&G. Get the digital transformation eBook: Teaching an elephant to dance. ] Not only are kids playing with more mini LEGO people than there are human beings on the planet (Delingpole J, 2009) but in 2015, they were … Stafford explains: The LEGO company at that stage had no idea how much it cost to manufacture the majority of their bricks, they had no idea how much certain sets made. Lego reported double-digit consumer sales growth in China, Asia-Pacific, Europe, and the Americas, and operating profit for the group reached 3.9 billion Danish krone for the first half, up 11% on 2019. So, it's less about just creating an e-commerce store or an online store. It focuses on the 'failure' of LEGO Universe, the LEGO … He added that the company had made efforts in what it calls "fluid play," blending physical and digital elements, with physical characters such as Lego Super Mario connected to an app via Bluetooth for example. ), with limitless choice and price transparency. ... First, get the CEO to mandate that digital transformation is a priority, and then bring digital … Nike halved the size of its digital unit in 2014 by discontinuing its ... Digital transformation is an ongoing process of changing the way you do business. The Znap line was an obvious reaction to K'Nex, an American construction toy company that was founded in 1993. By breaking into the toys-to-life market (or video games where physical action figures interact with those on screen), Lego was … Around 84 percent of digital transformation attempts have been known to fail. A leading-edge research firm focused on digital transformation. Read/Download the transcript. Part A provides an opportunity to follow the developments of the LEGO Group in the digital gaming arena. See our Research ... Lego Designer Mark Stafford, ... Stafford considers the Galidor series to be Lego's biggest failure. Lego recently defunded its Digital Designer virtual building program. The problem goes like this. 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