{"id":31167,"date":"2018-11-13T02:49:15","date_gmt":"2018-11-13T07:49:15","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/building-the-worlds-you-want-to-see-lego-calls-on-you-to-co-create\/"},"modified":"2018-11-13T02:49:15","modified_gmt":"2018-11-13T07:49:15","slug":"building-the-worlds-you-want-to-see-lego-calls-on-you-to-co-create","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/building-the-worlds-you-want-to-see-lego-calls-on-you-to-co-create\/","title":{"rendered":"Building the Worlds You Want To See: Lego Calls on You To Co-create"},"content":{"rendered":"

Background: The Lego World<\/strong><\/p>\n

\u00a0<\/strong><\/p>\n

Founded in 1932, the LEGO group, is a privately held Danish company that has grown from a carpenter\u2019s workshop to one of the world\u2019s largest toy manufacturers. Central to the LEGO group\u2019s enterprise was the foundational, iconic LEGO brick that was developed and re-engineered throughout the 1950s.[1]<\/a> Deemed the \u201cToy of the Century\u201d twice, the LEGO brick, with its interlocking principle properties allowed children throughout the decades to build unlimited castles, worlds, and playgrounds and helped make LEGO one of the largest, most recognizable brands in the world.[2]<\/a><\/p>\n

Despite widespread awareness of the brand, LEGO faced a crisis in sales and suffered record losses in the 2000s as the Internet revolution and changing trends toward physical toys jarringly hit the company.[3]<\/a> Recognizing this new reality and the impending changes in customer behavior, the LEGO group became one of the first large global corporations to turn to content co-creation to drive awareness, interest, and engagement within their customer base. By 2013, LEGO had revenue of US$4.7 billion, a profit of US$1.1 billion, and 12,000 employees.[4]<\/a> The Lego Group recognized that open innovation could be the answer to renewed consumer engagement and dynamic product innovation.<\/p>\n

Game Change and Game Plan: Lego Crowdsources<\/strong><\/p>\n

\u00a0<\/strong>While traditionally veering away from taking consumer inputs into product innovation pipelines[3]<\/a>, LEGO\u2019s declining revenues and stagnating innovations led the company to work with the CUUSOO system in Japan in 2008 to test the viability of crowdsourcing from consumers[4]<\/a>. The success in Japan led to a global beta test in 2011 and a subsequent global in-house program in 2014 that was named Lego Ideas.<\/p>\n

Lego Ideas functions by allowing users to submit images and contents regarding potential ideas for Lego products. Once an idea receives over 10,000 views, it enters the Review Process, <\/em>where it qualifies for a review by Lego\u2019s design, product management and manufacturing staff members. This process includes the viability\u00a0of consumers playing with the toy idea, any logistical licensing for the idea, and market potential. Pending completion of this phase, successful ideas are announced on the website, and then the co-created ideas will enter the Production Phase, <\/em>where Lego will perfect and re-engineer the design, build instructions, and handle marketing and manufacturing of all ideas. The consumers who have had their ideas crowdsourced by Lego are given 1% of the product\u2019s revenues and credited on the packaging[4]<\/a>.<\/p>\n

Lego\u2019s use of crowdsourcing and co-creation is critical to their ability to stay relevant in a rapidly changing digital landscape and to their competitive advantage of adding value to consumers. By crowdsourcing, Lego builds excitement and news for the brand, easily gains access to a much larger funnel of design ideas it can refine to create truly unique products, and gauges interest, demand, and market potential for product ideas in question. More importantly, Lego allows users to be actively engaged with the brand, working towards ideas that will attract individual recognition, perhaps even monetary rewards if selected, and will realize their imaginations. In a world where people are turning away from physical entertainment, such as toys, to the Internet, Lego is leveraging the Internet and consumer engagement to innovate exciting product ideas and having those who engaged in the innovation process buy those physical products.<\/p>\n

Recommendations<\/strong><\/p>\n

\u00a0<\/strong>While the crowdsourcing strategy has proven effective and lucrative for Lego, it is important they focus on encouraging continued interest in Lego Ideas, ensure product quality and demand, and are strategically planning the company\u2019s future innovation pipeline.<\/p>\n

Continued Interest: <\/em>There is a risk that crowdsourcing as they currently are doing may get tiresome for consumers if added incentives or challenges are not added in a way that continues to drive engagement.[5]<\/a><\/p>\n

Product Quality and Demand: <\/em>It is important for Lego to have a holistic process to vet ideas to ensure that product innovations fit into the brand, to avoid creations like Shaun of the Dead, that may alienate younger users, who are the target consumer of a toys manufacturer.[6]<\/a><\/p>\n

Future Innovation Pipeline: <\/em>With most of the crowdsourced innovators being adult Lego fans who have always been engaged with the brand, it is vital that Lego manages to make crowdsoured innovations and regular innovations relevant to young consumers who will similarly build love for the brand and associate with their childhood. Alternatively, it is also important for Lego to cater its content co-creation streams to younger consumers.<\/p>\n

 <\/p>\n

Questions: <\/strong><\/p>\n

Can this form of an innovation pipeline be sustainable in terms of driving interest and generating product ideas?<\/p>\n

Is this crowdsourcing idea lucrative for the long term success of Lego as a brand or just a fad for adult Lego fans?<\/p>\n

(Words: 776)<\/em><\/p>\n

[1]<\/a>\u00a0Lego. “About Us: The LEGO Brand”. Lego.com<\/p>\n

[2]<\/a>\u00a0Lego. “Lego History Timeline”. Lego.com<\/p>\n

[3]<\/a>\u00a0SCHLAGWEIN, D.; BJ\u00d8RN-ANDERSEN, N. Organizational Learning with Crowdsourcing: The Revelatory Case of LEGO.\u00a0Journal of the Association for Information Systems<\/b>, nov. 2014. v. 15, n. 11, p. 754\u2013778<\/p>\n

[4]<\/a>Yoo, Andrew. “Lego Ideas: Crowdsourcing the next big hit.”\u00a0HBS Digital Initiative.\u00a0https:\/\/d3.harvard.edu\/platform-digit\/submission\/lego-ideas-crowdsourcing-the-next-big-hit\/<\/em><\/p>\n

[5]<\/a>\u00a0Nagle, F., 性视界 Business School, & 性视界 University, degree granting institution. (2015).\u00a0The Digital Commons: Tragedy or Opportunity? The Effect of Crowdsourced Digital Goods on Innovation and Economic Growth<\/i>.<\/p>\n

[6]<\/a>\u00a0GUSTAFSSON, K. Who Ya Gonna Call? Lego Dials Fans.\u00a0Bloomberg Businessweek<\/b>, 7 abr. 2014. n. 4373, p. 27\u201328<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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