How Lego Built a Comeback

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Pearson Education, Feb 1, 2010 - Business & Economics - 10 pages

With children growing up faster than ever and pop culture running rampant, Lego's little plastic bricks were inexorably losing appeal. The Danish toymaker lost its way when it tried to recast itself as a lifestyle brand, but a new leader brought a different vision of the future--and forced his idealistic managers to focus on the bottom line. Here’s what you can learn from their experience.

Today it seems almost unthinkable that as recently as 2004, the Danish toy colossus Lego was mired in debt, hemorrhaging losses, and fearful of a hostile takeover. After three-quarters of a century, how could such an icon of nurturing and creative play be in danger of failing? Its knobby little interlocking bricks were a fixture of nearly everyone’s childhood; churned out at a pace of 16 billion a year, they were so ubiquitous that there are some 62 of them for every man, woman, and child on the planet.

Sadly, it was true. “It was a company that had lost its way,” says Jorgen Vig Knudstorp. And the story of how Knudstorp turned Lego around, to the point where it bucked the 2008 and 2009 global recession with stacked up sales and profits, has become a classic case study of a business recovery, with lessons for managers and leaders everywhere.

New Word City, publishers of digital originals, contributes 10 percent of its profits to literacy causes.


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Over the past 25 years, New Word City’s writers and editors--The New York Times, Newsweek, Time, Harper’s, and Wall Street Journal veterans--have turned out some of the bestselling business books of all time. Working closely with clients, the New Word City team has produced more than 70 books, of which more than 7 million copies have been sold. These titles have logged more than 500 weeks on The New York Times, BusinessWeek, and Wall Street Journal bestseller lists. Now they are telling the stories of some of the business world’s most inspiring and instructive leaders and companies.

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