Leadership secrets from Lego

LegoJorgen Vig Knudstorp has been Lego’s “master builder” of the company’s turnaround since 2004.

At the time, Lego was losing $1 million a day. Now it’s the world’s most profitable toy company, having grown fivefold between 2005 and 2015. Knudstorp sold noncore assets, made painful cuts and repaired the firm’s relationship with retailers.

His thoughts on leading the brand out of trouble:

On how he visualized the changes that had to happen: Soon after taking over, Knudstorp went on a “discovery journey” to understand what made Lego unique, visiting retailers to ask about what was missing, stopping at MIT for a reminder about how children learn, and attending a Lego conference for adult fans. “They really inspired me to go back to the creative expression of the core product,” he says.

On making tough decisions: Before layoffs, he gave employees lengthy advance warning, offered retraining and tried to be physically present. “I could show I care for them,” he says.

On executive bonuses: Financial metrics make up less than a third of the weighting used in determining bonuses. Most of the weighting relies on customer behavior, employee engagement and how employees rate top managers.

On leadership: Saying, “Thank you for doing all the things I never told you to do.”

On customer service: For a sick child who’d been saving money to buy a Lego set that was out of production, employees combed through the company looking for an unopened box. They were following Knudstorp, who said, “Don’t just do what you were told to do; do what you think is the right thing to do.”

— Adapted from “Brick by brick: The man who rebuilt the house of Lego,” Jena McGregor, The Washington Post.