CHICAGO — An academic who has studied the near bankruptcy and recovery of Lego used that company's experience to urge credit unions to be careful about how they use innovation.
David Robertson is professor of practice at The Wharton School at the University of Pennsylvania and author of a forthcoming book “Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry.”
He spoke Tuesday to credit union industry executives gathered or the CO-OP Financial Services THINK 13 conference, held at Chicago's Swissotel from April 29 to May
Robertson detailed how the company steadily grew from 1932 until early in the 21st century when it almost went bankrupt under the weight of what amounted to undisciplined innovation.
Essentially, Lego had adopted many of the attitudes and innovative practices that academics and consultants said companies should use, but had done so in such an unrestrained way that innovation had almost caused the death of the company.
“What Lego learned is that all innovation is not necessarily profitable innovation,” Robertson said. Out of the 11 products the company had innovated and launched since it began to self-consciously drive innovation, only three of those had been profitable, he said, and of those two were only profitable in some years.
In a question-and-answer period afterward, Robertson said innovators need to be aware of their identity and to innovate to advance that identity, not to abandon that identity. “There needs to be an awareness of what they are and what they are not,” Robertson observed.
Other lessons Lego learned involved limiting the immediate scope of innovations. Innovative teams should not be turned loose on an entire company, Robertson explained, but actually work best when targeted on specific projects.
“From a time of unlimited innovation,” Robertson said, “Lego moved to a situation where teams were asked to create their best police station, their best fire truck."
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- Mayor Booker Keynotes on Change
- Innovation That Maintains Identity
- THINK 13 on Tuesday: Slide Show
- Self-Assessment First Step in Innovation
- Leaders Should Talk Last
- CO-OP Rebrands ATM, Branching Networks
- Chicago Confab Kicks Off