Connie Kalcher (25:05)
I think one of the key things that happened during that time was we kind of lost a little bit sight on understanding our core consumer. And at this point when we were in a crisis and we were bleeding money, the core consumer became the six to nine year old boy. So not boys and girls, but just boys in order to start somewhere simple. And what we did was we did an ethnographic study of these boys. So we lived with families around the clock for a couple of weeks. And what we mapped out was what do they do in the morning? You know, they take their breakfast cereal, what's in their breakfast cereal or what cup do they drink from? Do they watch TV at the same time? Do they get a story before they pack their lunchbox? So everything was kind of written down. And at that point in time we saw ourselves very much like a toy company. And our window as a Toy company was 20 minutes a day. That was the play window that kids had. And that window was just getting narrower and narrower and narrower. So we could just see ourselves shrinking and shrinking and shrinking. So we needed to understand what happens throughout the day. And then when we mapped that out, we then looked at so where could LEGO play a role? From that we learned that how important stories and characters are that the kids are emotionally connecting with, that they don't wish for 100 red bricks that they can build a wall with. That's the parents dream of how they want to see their kids playing with lego. But kids of then and today, they're looking for a cool spaceship to build where they can play out some role play and something with pirates or something with a deeper emotional connection behind it. So we learned about the power of stories and characters and how they were used in the everyday life of kids. And then we looked at, okay, they play a lot of computer games. Can we do computer games? Could we do more licensing? We had been doing licensing before, but we were always struggling with this. Putting a LEGO logo onto a lunchbox, that didn't really feel right for lego. And if you look at all the partnerships LEGO is doing today, they are smart, smart, smart partnerships that adds value to the brand. Both brands, I would say. So I think that was a really good insight that if you don't understand your customer and the customers are not the same today, they won't be the same ten years from now or even two years from now. They constantly change. And going really deep on that understanding is sometimes something we forget as marketeers. We kind of maybe keep on scratching the surface, but don't go deep. And now we have with AI coming like a roller coaster into our world of marketing. That's a huge disruptor. What does that do to customer behavior, customer needs? But sometimes there is no external disruptor to make you change your mind or go deeper. Sometimes it just happens, slowly sneaks up on you. So I would say that that was a really huge learning for me that I take with me and which I don't think has been talked so much about. It's almost been flipped from the other side that LEGO was spreading itself too thin and which also LEGO learned from. And it's not spreading itself too thin, but picking these really valuable partnerships now, that drives value for both partners. So I would say that's one aspect. Are there others? Yeah, I think what I really learned from Jan Wiet, who was the CEO then, was the holistic way he looked at transformation and which elements do you need to use? So he was looking at the products, the economical structures, so the profitability of products, but also processes. We learned, for example, that where LEGO is being produced in Denmark or were produced by then, we learned that between the factories in Billund and the storage facilities, I think we were driving bricks around in Billund 23km before they ended up in a box and went out to the. To the customer. Another thing we learned was we were having. Suddenly we were having 14,000 different bricks. Every brick needs a mold. A mold is driving cost beyond belief and it lasts forever, but it's still a huge cost. And if you think about how many ways you can combine 14,000 Lego bricks, it's like astronomical. So how do you produce to that? So it's very difficult to control production. We were running out of brick for one box. So we Couldn't produce it. So all of these intricate details of understanding your flow, the workflow, the logistics, how much it matters, was really becoming visible. And we cut them down on these breaks, which were also driving complexity for the children. So they could hardly build these models. They were too technically difficult. And then in production, so we were actually a, we came from a manufacturing culture. We were at a manufacturing company, more so than an actual marketing company. So that was also a transition there. But one thing they did very cleverly in production during those times is they created what they called the visual factory. So we're planning in the factory and this drives cost. Like, it's very difficult to understand, but it does drive a lot of cost if you're not in control of your production. So what they did, they brought the planning out on the factory floor and then they had all the data from the day before. So how much were produced, where did it go to, which boxes are not, are lacking production facilities. And then leadership stood up in the middle of the factory and discussed actions, dedicated people to solve the actions every day. And they were visible. So the sense of urgency was visible to the factory people as well. But it was not happening in a closed door office. It was happening right there in the middle. And it created this sense of, I can go see that data, I can understand it as well. And then the sense of urgency, and that was a very smart move too.
