Learning with the LEGO Group

November 4, 2015
Foundation Capital

At Foundation Capital, we are lucky enough to have amazing entrepreneurs, friends and colleagues swing by our offices on a regular basis—and by the nature of our business, many of these same people are executives and leaders in their fields. But we had a serious ‘geek out-freak out’ recently when one of those visitors was the LEGO Group’s Vice President of Marketing and Customer Experience, Conny Kalcher.

I’ve had the pleasure of knowing @bricklady (aka Conny) for quite some time, but lately she’s been one of the executives leading an amazing turnaround for the LEGO Group, who found itself on this year’s list of the world’s 100 most valuable brands.

Branding seems to be something of a lost art in Silicon Valley these days—and since Conny is a master builder of brands, I trapped her in a conference room and asked her some questions on the topic. Here is just some of what she had to say.

Meg Sloan: Let’s start with the big news—Interbrand, which ranks the world’s most valuable brands, recently put the LEGO brand in its top 100 for the first time. I’m quoting Rebecca Robbins from Interbrand here, she said, “The LEGO Brand is a brilliant example of a legacy brand that is keeping its proposition relevant by evolving the experience.” So, Conny, what’s your secret?

Conny Kalcher: [laughs] Well, there’s no secret. We’re still very, very consistent to who we are, and the brick is at the heart of everything we do. But the play experience today is broader than only stacking bricks. It is about stories, and it’s about the digital experience, as well. So we try to understand what is relevant for children today, how they enter play, and how they experience play. That’s how we think about it – but of course, if a consumer is truly in love with you, which our children are, that’s something that goes beyond trends.

MS: That’s true. LEGO bricks has definitely become part of our culture. But what if you’re just starting out? What kind of advice do you have for entrepreneurs who might be trying to define a brand from scratch?

CK: First there’s the obvious—you have to register your brand so you have the right to use it and protect it. After that, you need to define the values behind your brand and what your brand’s promise will be to the consumers. In the end, marketing is very simple—it’s about being consistent and relentless about how to execute the brand’s promise.

And if you’re an entrepreneur, chances are you’re not sitting in a room by yourself coming up with this stuff. You’re probably in a small group, and you may each have different visions of what the brand should be. If you don’t align on day one, how can you communicate a cohesive message to your customers? Defining the brand up front will influence the direction for many decisions you make down the road.

MS: Speaking of being down the road, the longevity of the LEGO Group’s success is really impressive. What are a few things you’ve done to stay relevant for so long where other companies have failed?

CK: We constantly innovate. Innovation and idea generation are in the LEGO DNA. We innovate processes, product, packaging structures, what have you, and allowing that to flourish and be part of our culture is key. The other thing I would say is really understanding our audience. We’re constantly talking to kids—in China, Germany, here in the US everywhere where they are—and remembering that it’s about them, not us, I think that’s the most important thing.

Lastly, and this may sound obvious, but how you run your business is a big factor in staying relevant. We keep a scorecard to show us how we’re doing, and we measure five KPI’s.

Economic value-add [read revenue contribution] is one.
NPS is another—how well are we delivering on our promises.
Employee pulse: How much do we all like working for the LEGO company.
Customer pulse: How well are we servicing our customers.
And the plan and promise of our sustainability agenda.
All of those things have to balance out. If we earn a lot of money but we don’t deliver on the plan and promise, to us that’s a fail. Or we have happy customers but our employees are miserable, that’s a fail, too. We work really hard at maintaining a good balance—and it’s served us well over the years.

Conny Kalcher, LEGO Group & Meg Sloan, Foundation Capital

MS: What about social media? How has that impacted the evolution of your brand?

CK: I think social media has just given us an opportunity to have a dialogue with our customers and enable them to dialogue with each other. It’s really fantastic to be able to listen to that voice of the consumer. And it’s changed the way that we think about marketing—we went from just pushing out beautiful messages to better understanding what friends of the Lego brand really like to share with their friends. We listened, and we communicate differently now. It’s much more authentic. We don’t really care about reaching 50 million people if they’re not interested—it’s the quality of the engagement that’s important.

MS: Ok, last question. In 2014, the LEGO Group became the biggest toymaker in the world in terms of revenue and profit. That is a huge accomplishment. But are there any situations where you’re looking for technology to help you do things even better?

CK: Definitely. We’re working with a company called Tickr that helps us monitor what people are saying about us online, both in our own channels and on the Internet in general, and then they serve that data up to us. One thing we’re fascinated about is how to get feedback from consumers. Digital marketing still seems like this big field that’s not very transparent to me. So if there’s a company that can say, “here are the measures we can help you to optimize, here are the metrics you’ll get as a result, and in the end, here’s how it will lever up to growth,” that would be amazing.

But the other thing I’d say, is that it’s really hard for a marketer to do their job well and simultaneously stay on top of developing technologies that can make their job easier. Plus, marketers aren’t often very technically savvy, so if there’s a company that can speak my language, kind of translate the tech-speak to my-speak, they’d be able to reach a lot of marketers that way. I don’t want to be sold technology, because I may not understand that, but I definitely want to be sold a solution to a consumer proposition.

We felt so lucky to have Conny spend some time with us. The insights she shared are not just beneficial to our staff, but we hope they’ll also be helpful and inspirational to you. It’s clear that the LEGO company does a lot of things to maintain their success, but there are also opportunities to improve, and they’re looking for interesting solutions.

Help us continue the conversation by reaching out to us @foundationcap or@megsloan.

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