How Lego’s Purpose Made It The Most Powerful Brand In The World

From the age of 5 until maybe 11 or 12, I was a builder. A pretty good one. I built cities, roads, firehouses and castles. My holy grail was the Pirate Ship, but sadly Santa never brought that particular gift. For hours I was lost in a world where it didn’t matter if that road didn’t lead anywhere or that the houses were built of multi-colored bricks of different sizes. For those moments, I was a builder and I was making things. Lego defined my childhood complete with brick shaped marks on the bottom of my feet when I jumped out of bed and landed on one of my little building materials.

My building materials grew with me, from larger bricks and fewer instructions when I was younger to more advanced mechanical and pneumatic features as I grew older. But one thing stayed the same, I was able to imagine a world that I could build. Perhaps my first example of dreaming, planning and executing.

What a world away that feels today. That might have been 30 years ago but I still buy Lego (for my nephew) so that he can experience it the way I did. Lego has been through the wars since then too, from near bankruptcy in 2004 to being declared the Most Powerful Brand in the World in 2014 with record profits, a blockbuster movie, an appearance at the Oscars and more cultural relevance than ever.

What brought them from their knees to this lofty position in ten short years? How did the company turn around losses of more than $300m a year? Lego’s CEO Jorgen Vig Knudstorp was responsible for a turnaround that was unimaginable ten years ago. According to a great article in the Daily Mail, he consulted old colleagues at the Massachusetts Institute of Technology (where he studied for a PhD in business and economics), who told him Lego is the ideal way for a child to learn how to think systematically and creatively – something that was confirmed to him by a cover story in Time, in which the Google founders said that it was Lego that had shaped their young minds.

Despite the growth of the company over the years, here was confirmation that the “secret” was under their noses the whole time:

‘Inspire and develop the builders of tomorrow’
Our ultimate purpose is to inspire and develop children to think creatively, reason systematically and release their potential to shape their own future – experiencing the endless human possibility.

What followed was a re-organization of the company to ensure that every aspect of the company lined up with this purpose. It meant getting back to basics, fulfilling orders in a timely manner and diluting their interests in initiatives that didn’t align with this mission. Purpose was pursued over profit.

What Lego and countless other purpose driven companies have proven is that a unified mission and vision that pursues purpose over profit leads to profit more often than it doesn’t.

Could your business do with re-focusing on it’s core values, purpose and mission? Would you be in all of the markets and product lines you are in today if you were to truly align with your purpose. It’s a worthwhile exercise. Ask Lego.

We covered the famous Stengel 50 research earlier this week discussing how the top 50 of 50,000 brands studied over 10 years outperformed the S&P 500 by 1200% over the period of the study. The common bond each of these 50 companies shared? Pursuing Purpose over Profit. It pays to be nice!