InnoTown, the innovation conference in Ålesund, Norway has been hearing about how open innovation saved LEGO from the brink of bankruptcy – and how the Danish makers of one of the world’s most popular construction toys is continuing to inspire more co-creation with its consumers.
In the late 1990s, children were turning away from the famous building bricks in favor of video games and computing. There were also supply chain problems and the company was facing a battle for survival.
In 1998, LEGO released Mindstorms and within three weeks of it being launched more than one thousand users had hacked the product’s software to make their own customized versions.
Profits Go Up
Instead of shutting down the product and pursuing ‘the hackers’ through the courts, the company embraced these advanced users. They were coming up with designs unforeseen by LEGO which helped to shift more units.
The net result of its more open approach is that LEGO’s profits grew to 40% for five years – and this was during the global recession.
LEGO’s latest open innovation approach is its Cuusoo platform which is in beta. Anyone can submit an idea and those that garner 10,000 votes will be reviewed by LEGO and could be turned into a marketable product.
If that happens the person who submitted the idea will receive 1% of the net sales of the product.
“We work with a broad spectrum of people, from talented individuals to “the crowd” and are constantly evolving our programs and platforms to enable co-creation and various forms of collaboration”, said Erik Hansen, LEGO’s Senior Director for Technology & Open Innovation.