Learning outside the box

LEGO EDUCATION CASE

“Change was inevitable”, says Jacob Kragh, President of LEGO Education. “We could see that the entire educational market experienced a radical transformation, and in order to secure future business, we needed to embark on a journey that was fundamentally different from the one we had been on”. For LEGO Education, 2013 marked the end of a most successful three-year strategy period. Since 2010, the company had managed to create a proven business model – in a time when global recession had certainly taken its toll on Western educational spending levels. Growth ambitions were sky high – the leadership team was set on doubling revenues by 2018.

No longer a question of iPads and laptops

To illustrate what LEGO Education’s products are all about, Jacob puts a robot on the table. “Imagine you work in a production company”, he says. “In order to make this sorting robot work, you need to first build it. But what do you need to make it operational? An assembly line, a couple of sensors, a variety of physical formulas, programming skills. Then you can start testing it. Make the robot drive back and forth, adjust its speed, make it scan the correct colours”. It’s an innovative learning experience in which the physical and digital components are constantly intertwined – and interdependent. “That’s LEGO Education”, Jacob states. “It’s our reason for being. It’s what makes us unique and attractive in the market”. The vision of LEGO Education has always been to transform the way learning takes place. A wave of digitalization is, however, delineating new contours for the educational business.
Jakob Kragh bio

Jacob is a graduate in International Business and has been with the LEGO Group since 1997. After having worked with marketing and business development for 13 years, Jacob became President of LEGO Education in 2010 to develop the commercial part of the organisation. As Jacob is married to a teacher and has two children in public school, it’s safe to say that education permeates many aspects of Jacob’s life.

“It’s not only about adopting the use of iPads and laptops in the classrooms anymore, digitalization is something that affects all aspects of the educational system: how we transfer knowledge to students, documentation of results, assessments, communication and administration”, Jacob says.

 

21st century skills

 

The demand for digitally enabled, versatile educational tools and materials is indeed already vast – and expanding. It’s assumed that most students and teachers in LEGO Education’s core markets will have access to connected devices within a five-year period. This evolution poses high demands on educators, who are struggling to navigate the accelerated digitalization of the classroom and the tools needed to teach 21st century skills such as creative problem-solving, critical thinking, collaboration and communication.
Although LEGO Education is well geared to face this development, they needed to rethink their offering and capabilities to stay in the game. “We were already front-runners in some areas, such as combining physical and digital elements in our teaching material. However, in order to make sure we’re among the winners of the elimination race that will take place over the coming years, we need to develop a more

holistic approach to a rapidly changing market”, Jacob says.
The core of this approach is to deliver a complete solution and not just boxes of LEGO bricks along with some software. “It’s about making sure that teachers get the right training, that schools can measure the pupils’ progress, that teachers can document that learning objectives have been fulfilled, that pupils can share their work with each other”.

All these considerations resulted in Jacob and his team defining three main strategic focus areas: win in core markets and age segments, establish a more customer-centric and solution-oriented go-to market approach, and, finally, to create and implement a new digital business model, involving both new infrastructure, processes, front-end development capabilities and a more agile way-of-working throughout the organisation.

The LEGO® name is made from the first two letters of the Danish words LEG GODT, meaning “play well”
On average, every person on the earth owns 86 LEGO bricks
The first minifigure was produced in 1978. Since then more than 4 billion have been made – making it the world’s largest population group

Moving into high gear

During the first year of the strategy period, LEGO Education still delivered soaring 20% growth while launching a number of new strategic initiatives. This brought about new challenges. Jacob highlights the importance of defining your priorities as the most difficult one: “We constantly need to balance short and long-term objectives. On the one hand, protect our daily operations to maintain a solid performance; on the other, drive change and allocate enough resources to the strategy effort”. This requires very precise communication from the management on which projects to prioritise and in what order. Next, you have to get people on-board. “If you want people to take part in this sort of journey, they need to understand the greater purpose. It’s storytelling big time”, Jacob says.

The core of this approach is to deliver a complete solution and not just boxes of LEGO bricks along with some software.

Capturing hearts as well as minds

Today, LEGO Education still performs well, and sales continue to grow, despite a great number of strategy projects running. Jacob himself is amazed: “It’s been fantastic to experience the heartfelt wish to succeed. It’s as if the change agenda helped the organization find a whole new gear”, he says. Jacob’s story demonstrates that perhaps LEGO Education’s choice to disrupt its existing, successful business model is something that should become more common business practice. Most companies wait to take such leaps until they are standing on a burning platform. However, the idea of going to extra lengths now in order to gear up for tomorrow is not just a burdensome safety precaution, and driving change while working full speed is possible. According to Jacob, the key to successful implementation lies in allocating quite a few resources to support the strategy process. More than you would perhaps think. And in addition, helping the organisation set clear priorities and getting the organisation motivated for change. “You need to capture not only people’s intellect, but also their hearts”, he stresses. “I think that if you base your strategy effort solely on the fact that there is more money ahead, you will not be able to mobilise the needed passion”.