CHICAGO — An academic who has studied the near bankruptcy andrecovery of Lego used that company's experience to urge creditunions to be careful about how they use innovation.

David Robertson is professor of practice at The Wharton Schoolat the University of Pennsylvania and author of a forthcoming book“Brick by Brick: How LEGO Rewrote the Rules of Innovation andConquered the Global Toy Industry.”

He spoke Tuesday to credit union industry executives gathered orthe CO-OP Financial Services THINK 13 conference, held at Chicago'sSwissotel from April 29 to May

Robertson detailed how the company steadily grew from 1932 untilearly in the 21^st century when it almost went bankruptunder the weight of what amounted to undisciplined innovation.

Essentially, Lego had adopted many of the attitudes andinnovative practices that academics and consultants said companiesshould use, but had done so in such an unrestrained way thatinnovation had almost caused the death of the company.

“What Lego learned is that all innovation is not necessarilyprofitable innovation,” Robertson said. Out of the 11products the company had innovated and launched since it began toself-consciously drive innovation, only three of those had beenprofitable, he said, and of those two were only profitable in someyears.

In a question-and-answer period afterward, Robertson saidinnovators need to be aware of their identity and to innovate toadvance that identity, not to abandon that identity. “There needsto be an awareness of what they are and what they are not,”Robertson observed.

Other lessons Lego learned involved limiting the immediate scopeof innovations. Innovative teams should not be turned looseon an entire company, Robertson explained, but actually work bestwhen targeted on specific projects.

“From a time of unlimited innovation,” Robertson said, “Legomoved to a situation where teams were asked to create their bestpolice station, their best fire truck.”

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