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Lego: A Case Study in How to Use Design Thinking to Deliver Record Sales and Profits

“Everything is awesome!” proclaimed CEO Jørgen Vig Knudstorp in a recent article in Strategy+Business.  And why not – with record sales and profits in 2014. Over the past ten years, sales have more than quadrupled. Last year, the Danish company added 893 employees, opened new offices in Shanghai and London, passed Mattel to become the leading toy manufacturer in the world, and topped Ferrari as the world’s “most powerful brand” in the rankings by consultancy Brand Finance.

 While Lego’s logistics and efficiency are fairly well known, the real, unheralded secret to the company’s success is its serious study of play. Most toy companies—like all companies—conduct market research by sending out surveys and forming focus groups. Lego behaves more like an anthropology department. It sends people out into the world to study kids in their natural habitat. It’s Design Thinking in practice!

Through the Lego Foundation, Lego is the largest private sponsor of play research, globally. Play is simply part of the company’s DNA. (In fact, the word Lego is an abbreviation of the Danish “leg godt,” meaning “play well.”) Lego has attacked the question of why we play from many angles, including watching kids’ brains under an MRI to see which parts light up when playing with different toys.

Most companies study consumers to figure out how they make decisions, in order to hijack the decision-making process and sell more products. But Lego does not simply wish to understand why kids play. The company has a different approach to its research, one that is far more ambitious. It aims to understand children’s cultures, the interplay between kids and their parents, and the social dynamics that shape people’s aspirations. The company’s sustained efforts toward achieving a deeper comprehension into consumer behavior give it a unique perspective on what’s important to kids and how to construct meaningful experiences for them. Lego’s focus and sense of direction are unparalleled in the toy industry.

Read the complete article here.

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