{"id":34792,"date":"2018-11-13T19:11:27","date_gmt":"2018-11-14T00:11:27","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/great-scott-whats-next-for-open-innovation-at-the-lego-group\/"},"modified":"2018-11-13T19:11:27","modified_gmt":"2018-11-14T00:11:27","slug":"great-scott-whats-next-for-open-innovation-at-lego","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/great-scott-whats-next-for-open-innovation-at-lego\/","title":{"rendered":"Great Scott! What\u2019s next for open innovation at LEGO?"},"content":{"rendered":"

November 2018 marks the 10th<\/sup> anniversary of LEGO Ideas, which was The LEGO Group\u2019s (LEGO) first venture into open innovation. On the Ideas platform, adult LEGO fans can pitch their ideas, vote for their favorites, and ultimately have the chance influence LEGO\u2019s product roadmap by gaining over 10,000 votes. Over the past 10 years, 1 million members participated, 26,000 ideas were submitted, 166 ideas received enough votes, and ultimately 23 new product sets were produced.[1]<\/a><\/p>\n

\"\"<\/a><\/p>\n

LEGO Ideas Back to the Future Project[2]<\/a><\/p>\n

Crowdsourcing playset design ideas is a strategic move for LEGO for three key reasons: (1) staying relevant to customers through playset designs as the toys industry is infused with consumer technology, (2) keeping former LEGO users engaged with the product line in a different phase of their life as they move out of the target age range of the core product sets, and (3) creating buzz around the brand in an industry that is ruled by the \u201cit-products\u201d of each holiday season.<\/p>\n

While LEGO is an iconic toys brand, as customer shopping and usage behavior changes, the company needs to find ways to stay top of mind for customers.<\/p>\n

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

Changing the Game Plan<\/strong><\/p>\n

Shortly before reaching the 10-year anniversary of the first open innovation concept, LEGO announced a series of new projects as an initiative to revamp the product development process, making it faster and more adaptive to real-time feedback. Tom Donaldson, VP of LEGO Creative Play Lab, said: \u201cContinuing to push our innovation approach means nurturing ideas that we don\u2019t always know the outcome of, encouraging risk-taking and finding new exiting ways to launch products that are a bit different compared to what you would normally see from the LEGO Group.\u201d [3]<\/a> The new program takes a chapter out of IDEO\u2019s playbook: focus on rapid iteration while testing ideas and concept experiences. This strategy can help bring products to market faster and reach new audiences by going outside the norms of a traditional product development process.<\/p>\n

One of the first projects is a partnership with Indiegogo called LEGO FORMA which creates foil \u201cskins\u201d for toys, the first being a moving koi fish.[4]<\/a> Unlike prior open innovation at LEGO where online votes were a proxy for purchase interest, this type of project actually gets financial backing and funding up front to pursue. The pilot can grow the customer base by targeting people who are at the intersection of creative adult hobbyists and early adopters that frequent crowdfunding websites to shop from small brands. Through Indiegogo, LEGO can deliver unique products, in small quantities, on platforms that typically don\u2019t have mass brand presence.<\/p>\n

\"\"<\/a><\/p>\n

LEGO FORMA Moving Koi Fish Skins[5]<\/a><\/p>\n

 <\/p>\n

Thinking to the Future <\/strong><\/p>\n

LEGO\u2019s push towards crowdsourcing their latest sets is a valiant effort to stay relevant as the toy industry grows through technology-based toys.[6]<\/a> In order to achieve long term success, LEGO needs to take a step back in the product development process from just playset-innovation to actual core-product-innovation. As awareness for green initiatives increases, studies have shown that customers are also interested in buying green toys for their children.[7]<\/a> By leveraging their scale in the toy industry, LEGO can capitalize on this trend by bringing green products to market at a premium yet accessible price point which will in turn attract new customers and upsell a portion of current customers who are interested in environmentally-friendly products.<\/p>\n

 <\/p>\n

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

For the core business, how will the 2017 bankruptcy[8]<\/a> of one of the largest toy retailers, Toys \u2018R\u2019 Us, impact sales for LEGO moving forward? Will playsets from crowdsourced ideas draw enough consumers through other channels to make up for the loss in bricks-and-mortar sales? As more sales move online, will lower price point LEGO sets thrive on e-commerce platforms due to profitability concerns with shipping costs? How will LEGO grow the small-scale ideas coming through LEGO FORMA?<\/p>\n

 <\/p>\n

(Word count: 787 words)<\/p>\n

 <\/p>\n

Footnotes:<\/p>\n

[1]<\/a> \u201cCELEBRATING 10 YEARS OF CROWDSOURCING AND CO-CREATION WITH LEGO\u00ae FANS,\u201d The LEGO Group press release (November 8, 2018).<\/p>\n

[2]<\/a> The LEGO Group, \u201cThe DeLorean Time Machine,\u201d https:\/\/shop.lego.com\/en-BE\/The-DeLorean-time-machine-21103<\/a>, accessed November 2018.<\/p>\n

[3]<\/a> \u201cLEGO\u00ae CREATIVE PLAY LAB TAKES PILOT PROJECT TO INDIEGOGO FOR OPEN INNOVATION,\u201d The LEGO Group press release (Billund, Denmark, September 27, 2018).<\/p>\n

[4]<\/a> Ibid.<\/p>\n

[5]<\/a> Uncrate, \u201cLEGO FORMA BUILDING KIT,\u201d https:\/\/uncrate.com\/lego-forma-building-kit\/<\/a>, accessed November 2018.<\/p>\n

[6]<\/a> Ann Zimmerman and John Kell, \u201cToys and Apps Are Yet to Play Nice Together,\u201d The Wall Street Journal, February 7, 2013, https:\/\/www.wsj.com\/articles\/SB10001424127887324906004578290353493389178<\/a>, accessed November 2018.<\/p>\n

[7]<\/a> M. Tsai, L. Chuang, S. Chao, & H. Chang. 2012, “The effects assessment of firm environmental strategy and customer environmental conscious on green product development”, Environmental monitoring and assessment<\/em>, vol. 184, no. 7, pp. 4435-47.<\/p>\n

[8]<\/a> Paul Ziobro and Lillian Rizzo, \u201cToys \u2018R\u2019 Us Tells Workers It Will Likely Close All U.S. Stores,\u201d The Wall Street Journal, March 14, 2018, https:\/\/www.wsj.com\/articles\/toys-r-us-tells-workers-it-will-likely-close-all-u-s-stores-1521060803<\/a>, accessed November 2018.<\/p>\n","protected":false},"excerpt":{"rendered":"

LEGO has been using open innovation for the past 10 years to bring new playsets to market. As they strive to stay relevant while the line between toys and consumer electronics starts to blur, how will they revamp their strategy and consequently product development process to accommodate? <\/p>\n","protected":false},"author":11613,"featured_media":35573,"comment_status":"open","ping_status":"closed","template":"","categories":[1195,1960,4239,344,38,1598],"class_list":["post-34792","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-crowdsourcing","category-lego","category-open-innovation","category-product-development","category-toys","category-usa","hck-taxonomy-organization-lego-group","hck-taxonomy-industry-entertainment-and-recreation","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2018\/","yoast_head":"\nGreat Scott! 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