Future Foundry LIVE: Office Hours

Very, very excited to have Søren, Concept Director from LEGO, with us today. Søren, how do you make sure that the, you know, like the, the areas that you're working in, like the territories that you're going after at LEGO, how do you make sure that they— I guess we're speaking company opportunity fit here, right? How do you make sure that they align with your core competencies? Like, is there a specific criteria or like a process that you've got in place? Like, how do you— How do you set your strategy at LEGO in terms of those opportunity areas, and how do you evaluate that fit?

No. So basically, just want to start somewhere with saying it's all about innovation culture. And our mission in LEGO is to inspire and develop the builders of tomorrow. And that has a huge impact in, you would say, the long-term investment goals that we're bringing. So you can say from a— to your question, We have these overarching innovation goals: innovate play, innovate the ecosystem around us, digital transformation, positive impact to the world. No surprises there. But the point being that we as a company, in having these agendas, they steer everything we do, and they actually also steer the operation method. And I think it's important to understand that with our culture, our talent is, is actually structured in what we call leadership playground. And the reason for me mentioning it is this, that innovation and bringing this out to the market is for everyone in the company to do. So we live under these 3 very simple, uh, you know, rules or values within the company. Be brave on behalf of the business. Be, you know, Be out there, be inquisitive, be focused on what you do. And last but not least, be curious about the world and everything happening within it. So, so these values altogether actually forms the way we distribute innovation. So as I mentioned before, it's actually been explaining quite simple. We've got, when we got existing play and existing business, It's the core innovation. That's where we drive demand. This is, you know, I always use it as a sausage factory analogy because you kind of, you know, it's reducing risk, it's incremental innovation, it's based on time and what you do. But on the other hand, what we see is as soon as we move into new business, new play, that's when we need the front-end innovation. And it's best depicted by just the hot dog stand. We're trying things out. You mentioned it. Piloting, being constantly on the needs of people. So basically you can say, if you look at it this way, then the core processes very much, you know, low waste, we're just innovating for where we are going. But when it comes to front innovation, that's really where we need the pioneering and creating the future play via radical experience innovation. So to, you could say, The first question here is really about the organizational strength, focusing on what are we good at, using the methods that you also described in being agile, in being inquisitive, in jobs to be done when we are uncovering new needs, but also be extremely firm when you are driving the core business, when you know what you're doing. And that's where that has worked until now. But let me— I think I'll come back later a little bit on where's the future then heading.

How do you make sure that, you know, when you're developing new propositions within those spaces, how do you make sure that they're like meeting those unmet and underserved needs that we talked about earlier at like a big enough scale? I mean, LEGO is a huge-scale business. Like, are there any specific strategies, like different feedback mechanisms that you're using to like collect insight and iterate your way to product market fit? Like, what does, what does, what does product market fit finding look like at LEGO?

And a very good question. I think, I think I, again, here I came prepared a little bit on how we operate, but I think what's essential, back to also my intro, is that we think and act audience-first across everything we do. This is, of course, happening also in the sausage factory, but more so, of course, when we are uncovering new needs. So this belief of audience-first has a huge impact on how we operate. And it's the good old Double Diamond model that we're really operating in, that you can say the way to solve what you're mentioning here is to identify and prioritize the riskiest assumption. So the point being, even though for some people it might seem a little bit overwhelming, that again, oh, let's get to the finish line as soon as possible, it is really a culture around designing for user experiments to prove or pivot. You know, minimum viable product, it has many good names. But the point being that in order to operate this, you need to think in the double diamond. Sometimes you need to invest a lot in the beginning of the diamond, horizon scanning the jobs to be done. Sometimes you have them and you're able to do it, but then moving that before you've actually proven something here with minimum cost before going in and, you know, carving in steel basically when you want to go. So, so the point here being that alongside this process, what we have set in motion is of course a whole array of user experiments. From quantification, quality, you name it. We've got all sorts of tools to bring that in before going into radical infield. So really, you know, little panels, little things where we just prove or pivot our hypothesis along the way. What is so interesting is that that's proven and known methods and everything, you know, in normal companies and so on. But what we've also seen in in, you know, in our, you would say, intrapreneurship or whatever we call it, that how we can use the same ethnographic methods of questions, being curious, being brave, actually with the stakeholders. So internal and external stakeholder design, lack of better term, but really using business unit markets and specialties and agencies to co-build this message. So what we've actually done in Frontend Innovation is to align both consumer integration, but certainly also all our experts within and within the vicinity of the company to build these cases along the way. Because at the end of the day, everything about innovation here in this end is about de-risking. So actually, we made this simple model that kind of said, yes, there is a lot of risk in the beginning, but it's okay. That's, that's where you need to have the uncertainty and risk. As long as your investment levels doesn't reflect it. So, so this simple model you can see is actually how our management steer our innovation portfolio. We have loads of things cooking in the beginning and maybe even just things coming in from the right, and there's low investments level in them. But as soon as you, you start getting closer and closer, we also increase investment and thereby also de-risk. So in the end, it's very simple and then yes, very complex, but it's really that buildup that has really made our long-term investment valuable because we rarely go to market with something that doesn't fit at all. It has happened though.

What's the kind of scale of concept testing? and user research that's going on before market pilots in order to demonstrate that product-market fit?

And I think actually it depends a lot on what we're doing, but you could say we do already in the first part of the double diamond go out and do something. So we've set processes in motion where you can do, you know, fake door, you know, online fake doors, like, would you be interested in a new service that blah, blah, blah. just to get some steer. And I think what's really interesting, it's not only about finding evidence and de-risking, it's about listening to consumers also brings you some huge aha moments in that phase of already, you know, asking commercial questions early on. Like, you know, don't be afraid of going out and MVPing. And trying very early. The worst thing that can happen is that you learn something. So I think that would be my major cry out here for everyone listening. Like, experiment, apply an experimental culture in innovation. Try things out as soon as you can and go out and learn from it because it's both risk de-risking, but it's certainly also improving your innovation.

Can you talk to us about like some good examples of like products, services that you've been working on at Lego that really demonstrate like problem-solution fit and like speak to what the kind of problem and kind of better solution looks like?

Yeah, thanks. You know, I think again, it's of course a little bit difficult with a lot of things being secret, but I have, I have a few examples of how we operate. One is the organization part of what this means. And then secondly, some examples of what we've actually built in thinking like this. Because as I mentioned before, so just starting there, in our field of operation, there is this, you know, division that we had up until now. But what we've seen lately is actually that the world, and I think you alluded to it as well, The world is changing so fast. Change is constant, and the risk of losing ground is so quick. So we have learned that not only in the core innovation and the front innovation, you need to think ahead. So as an example of successes, and I'll show you concretely what we did using this method, so please try it out and tell me what you want. But that's basically my job now is to enable everyone everywhere to innovate from within. That's how we've set it up. And the reason for me telling you this is actually how efficient and how little waste you can create if we go in as internal consultant, helping teams to find their jobs to be done, their, the process. Not everyone can do the same thing, and they only need it ever so often. So we actually go in as innovation consultants and build that bridge between them. Because it's really all about future-proofing the brands. That's so essential for long-term success. So what this means in all simplicity is actually that any good example that I'll come to will need to be rooted in what we call the 3C innovation thinking. This simple model is how we help franchises within LEGO, being that LEGO City or whatever, To to start on the right foot. So so I think my point to you to your question here, the best example I can give is where you have started on the right grounds before you race. So this you know toolbox here is about curating the knowledge and insights you have around what we call the three C's: consumer, commercial, and especially cultural insights. We are forgetting in innovation. We can know what consumers say, we can know what commercial goals we have, but the cultural changes around us, how, what that changes. So basically, example number 1, what we identified in preschool is that the consumer, so the parents, they really want these 4 jobs to be done for their kids. When we started looking at this, and the portfolio we had, it was extremely clear that we were outta sync with where the parents want us to be. So that's a very consumer need, but it's also very here and now. So again, in order to make that fit both in commercial and cultural perspective, we have another example here where using this methodology, understanding, I know I don't have time to go through all the details of it, but in principle, just this thinking, if you can apply that, What do we know about the consumer? What are the jobs to be done? What commercial impact are we trying to change? But certainly, and we've seen this again and again, what are the cultural shifts happening out there that we should take notice of? So a good example here is that Friends, LEGO Friends, our girls line, and we, you know, we were allowed to say that in the beginning, it's a girls line. Not anymore. Again, cultural shifts. But what was so interesting is that it's only 10 years old and it still looks dated if you see here on the left side. So what we did here was to apply, collect, and go out and research both the consumer, the commercial, and the cultural impact of the world in change where empowerment of girls in, you know, D&I, all the things actually made us do a complete repositioning of the Friends brand towards a friendship, you know, portfolio and so on and so on. So I think that was just the basis of it. I hope it gave you a little bit of picture on how you can see we are steered completely by audience first, but also how It's actually efficient because you de-risk, you invest in the right points in time, and more so here with the Innovation Everywhere example at the end, you risk not innovating for the right reasons, for the right society, not only for the right job to be done. That, I think, is the huge, one of the largest changes in, in, in our line of the business, and I'm sure in most of yours as well.