"Lego has gone digital"
EXCLUSIVE INTERVIEW – In an interview at Figaro, the CEO of the Danish toy manufacturer delivers his strategy for the future. The famous plastic brick this year celebrates its sixtieth anniversary.
From our special envoy in Billund (Denmark)
Niels Christiansen, 51, took over as CEO of Lego on October 1st in turmoil. The group, which had become the most profitable toy manufacturer in the world, experienced a historic fall in results last year. Last September, it had to part with 8% of its workforce. In an exclusive interview with Le Figaro, Niels Christiansen, whose group published its annual accounts on Tuesday, discusses the transformation undertaken within the group and its digital projects.
THE FIGARO.-What changes have you implemented at Lego since you arrived?
Niels CHRISTIANSEN.- We have simplified the way we work. Starting with removing hierarchical strata. The five zone patterns (United States, China, Europe…) now report directly to me. This gives greater proximity to our markets, both to consumers and to our distributor customers. Country leaders are also more autonomous, allowing them to be more responsive, especially during the crucial holiday season. Our designers are also encouraged to express their creativity more freely. Finally, we need to move faster in the design of our products to be able to keep up with the rapidly changing desires of children. This is what happened at the launch this winter of our virtual reality app. Our team did it in just six months. But this transformation of the company takes time. We must drive these changes without forgetting our DNA and without renouncing quality.
Why was this transformation necessary?
We had for more than ten years a “supernatural”growth. We knew it wouldn’t last. But Lego has grown a lot. Today, it is necessary to adapt its organization to the size of the company.
Is digital a threat to Lego?
On the contrary, it is an opportunity for us. It’s a way to add dimension to the gaming experience. The heart of our profession remains brick; it is what makes children vibrate. But this does not prevent us from combining physical constructions with the digital world. With our values and the breadth of our ranges, we are in a unique position to do so. The child can have experience with the Lego brand through the family ipad or smartphone. It is possible to animate a Ninjago blue dragon through our applications. Or program a robot, with our Lego Boost game kit, which had a great success last Christmas.
Should we see the year 2017 as an accident in the history of the company?
We are not satisfied with our results but our level of profitability and cash flow remains good. Our sales declined by 7% because we cleaned up inventory at home and at our distributors after being overly optimistic in our sales forecasts in 2016. And no because fewer people bought Lego!
Will 2018 mark Lego’s return to growth?
This is a period of consolidation. Today we are laying the foundations for a future return to growth. We prefer not to set a deadline. Our goal is to convince more and more children around the world to play with our bricks. Our shareholder, the Kristiansen family, has given us the mission to continue to ensure the success of the brand over the next fifty years!