Leadership and Change Management: LEGO Group Q&A Sample

Introduction Of Leadership and Change Management: LEGO Group

Strong leadership is needed in an organization because a change coming naturally is a slow and inevitable process. Therefore, to bring change at a fast pace and build as well as sustain a competitive edge strong leadership is required. In business units, leaders play a significant role in indulging and managing change prominently by undertaking suitable leadership styles or approaches. Here, in this report, the main focus is put on the company ‘LEGO' to study the changes brought about when a new leader comes into the scene. This report will provide deeper insight into Kotter's 8-step model and its role in change management as well as implementation. The current study will also present a critical assessment and evaluation of the transformational leadership style followed by the firm. Besides this, the report also entails the role and contribution of leadership in managing business practices during the pandemic (COVID-19).

Question 1

Discussing and evaluating the changes made in The Lego Group using Kotter's 8-step model

For changing the vision and bringing the transformation change the Kotter model could potentially be applied at the strategic planning stage of the company to change its mission and ultimately restructure the company as a whole (Matricano, et. al, 2022). The CEO adopted the Kotter model of management change in 2004 because it proved to be the most effective strategy for growth and survival. He proceeded systematically through the eight steps of successful transformation.

• Step 1: was to bring urgency whenLegorevealed an imbalance in 2003 on its annual financial statement. This step is essential for smoothing the supply chain operation Lego builds an enterprise platform. To maintain the consequences occurring in the supply chain the corporation had to redesign each and every element to regain profit (Kennedy, et. al, 2020).
• Step 2: was to build a team which was supposed to assemble the change. In order to address the problem occurring in the supply chain and to successfully implement change inside a company, Jorgen Vig Knudstorp, as the CEO of Lego, requires assistance.
• Step 3: included Lego'sgoal of staying out of debt. One of their objectives was to reduce the number of vendors and logistical operators while also streamlining distribution. This step helped in solving the problems that can be fixed by eliminating inefficiencies, matching Lego's innovation capabilities with the market and reorienting the business in order to be successful in the emerging big-box marketplace.
• Step 4: introduced Lego to cooperate with the shops and shared its mission with the major stakeholders. To address the problem the CEO conducted effective market research, did scenario planning, and communicated with its stakeholders (Feinberg and Watson-Gegeo, 2021).
• Step 6: include the generation of short-term wins as the team saw immediate success as a consequence of the supply chain modifications, which led to an 11 per cent boost in sales in the year 2006. Higher revenue can be earned as suggested by Knudstorpthat by concentrating on the company's main product ‘the Lego brick' instead of novel structures, the company may see a rise in profits. His capacity for making connections results in higher earnings for the business.
• Step 7: In order to bring change to the enterprise platform Lego's CEO announces extend of the lifecycle of the new product so that further changes can be consolidated. Knudstorp assigned anthropological teams to monitor consumers and learn about their experiences. Rather than just a toy company Lego is a brick medium for its customers.
• Step 8: At this stage, Legoingrained new ideas into the corporate environment, these adjustments have endured since the company's framework was crucial for meeting operating expectations in 2016.

As certain phases are not applicable in all circumstances, each of the eight phases of the Kotter model is still being investigated. Lego did not implement step five of the model which was to"Empower broad-based action.”. As a consequence, he was able to discern that Lego wasn't behaving naturally. Then, in a moment of desperation, Knudstorp announced a choice to cut costs and return to simple.

A plan of action was needed rather than a strategy, which was what Knudstorp and Ovesen thought the business required. Knudstrop believed that the company should focus on cash flow management as opposed to sales expansion. Amusement park sales, a slowdown in retail growth, a reduction in the range of products, and a 1000 staff reduction are all proposed. Instead of creating an all-encompassing approach, thecreation ofan action plan was required that's why he adopted the eight-step Kotter's model.

Earlier The Lego Corporation didn't recognize that its supply channel was a significant contributor to its issues until after experiencing several years of profitability and inadequate performance. Being born out of the organization's two main strengths company's ability for invention and dedication to quality made the issues particularly challenging to pinpoint. To simplify its product range Lego cut back on the number of themes and kits it provided. Simplification helped the business take better control of its inventories and concentrate on its most important services (Pinto-Llorente, 2022). For simplification, peers from the Massachusetts Institute of Technology and seasoned Lego fans were consulted by Knudstorp.

Question 2

Discussing and evaluating the leadership of The Lego Group

It is now more crucial than ever to have an outstanding durability labour force and corporate executives who are must also be willing to motivate employees to go further than the call of duty. A new concept like transformational leadership is the result of emerging leadership. The theory of transformational leadership can be applied in the company's divisions, departments and organisation as a whole. Knudstorp restored the prosperity of a well-liked business in the market. Perhaps there are some useful lessons to be learned from Kundstrop'sideas and strategies, regardless of whether or not the leader belongs to a command of a large organization or a tiny local firm. The CEO kept these small points in his mind to successfully manage shifts, and make difficult business choices, which helped him in positioning his organisation for future growth, keeping in mind these four fundamental principles.

Jorgen is considered to be a transformational leader as his strategy was to bring Lego again into the market and remove all the crises the company is facing (Behnamnia, et. al, 2020). To bring Lego back on track, Jorgen practised the paradoxical principles mentioned above to involve learning. Jorgen always stuck to the principles that have contributed to the company's growth even though the company was facing crises. He believed that there was a huge need for reconstructing the company's necessity. He understood that Lego is doing so many things at the same time which was not required as well and it diverted Lego from its core capabilities also. Thus, the transformational changes brought by Jorgen can be described as the primary motive to bring Lego back into the marketplace. Going back to the basics is the noticeable transformational change which he brought. For evaluating the leadership, changes and innovation have been considered as the key elements. In this particular case, Jorgen turned Lego's growth by bringing, changes, innovation, creation, and good guidance.

Jorgen proved himself to be a perfect leader as he transformed Lego into a successful company when it was in crisis and was facing millions of losses daily. Jorgen's innovation was seen by inventing new products like entities, new movies, and TV shows. Change is the only way which pulled out Lego from the loss crisis (Lee, et. al, 2022). Thus, Jorgen is considered to be a change-oriented leader. If there was another leader other than Jorgen appointed as the CEO of Lego in the year 2004 he would rather considered a success without diversifying or changing anything in the organization. It was Jorgen who thought that changing is the only way to fight the ongoing crises and make Lego sustainable amid the losses. To make people rely on his mission and vision Jorgen practised different things and proved to be a charismatic leader. Leaders like Jorgen become transactional to place too much emphasis on specific, immediate goals as well as on set norms and practices. Jorgen made several attempts to foster the innovation and ingenuity of adherents.

Where organizational issues are straightforward and well-defined, this type of management strategy could be effective. The Jorgen way was to eliminate those ideas that do not fit into the company's plans and goals. Transactional leaders like Jorgen focus on increasing the productivity of Lego by cutting extra costs and improving the organizational decision-making process. Transactional leaders like Jorgen who focus on increasing the productivity of Lego by cutting extra costs and improving the organizational decision-making process are shown to be excellent at steering judgments intended to boost performance and save expenses. Jorgen's strategy also included action-oriented programs and relationships with customers. Setting shared objectives and offering a variety of prizes for achievement are all characteristics of atransactional leader. Jorgen also express objectives clearly, gives appropriate resources, and connects the objective to incentives. To keep a close eye on the job performance of their staff Jorgen looks out for any violations of policies and procedures, and takes remedial action as necessary to avoid errors. To bring Lego back on track, Jorgen not only fulfilled the expectations of its customers but also set standards to meet the performance of the organisation. In reaction to poor performance, Jorgen might also utilize penalties. Jorgen created an environment in which he could get many opportunities to make effective decisions. It was his responsibility to make decisions and avoid a lack of direction in the company.

Question 3

Recommending strategies to The Lego Group for continuing their success in the future

The recommendations based on our understanding of the leadership and change management during the COVID outbreak can be made for Lego to process its success in the upcoming time.

• Innovation for the consumers: Lego Group is a family-owned business established in the year 1932 as a producer of toys made of wood by a Danish carpenter named Ole Kirk Christiansen. Since then, the company has adopted a very customer-focused strategy for inventiveness, echoing the goals of its creator to develop goods which are so appealing that they don't require anymarketing.
• Paradoxical leadership: The legendary company's strategy for management, according to Knudstorp, who was the initial non-family person to hold the position, is a "balancing act" that aims to balance complicated, occasionally antagonistic factors while minimizing and avoiding stiffness (Walk, 2023). According to Jorgen, he believes that in the end, Lego is aglobal firm that only exists on its capabilitiesfoundation, so he decided tohave agood strategy in addition to execution.
• Building of financial reserves: Throughout prosperous periods, The LEGO Group was also enabled to accumulate cash reserves that they could draw from if necessary during times of difficulty (Isa and Liem, 2021). Building financial reserves during the outbreak of the pandemic helped the company to bear any additional costs occurring. So with this, the company can involve in any cash transformation and can avoid having any debt during the crises.
• Recycling and reuse: Eliminating plastic bags by the year2025 is the main goal ofLego as the companywants to stop using plastic bags in its products. With the onset of 2022, the company will introducepaper covers thatare going to be made available. Lego is still controlled by its founding family and a charitable foundation. Lego is going plastic-free the company is introducing recycled plastic bottles rather than oil-based plastic bottles for making bricks. Recently, Lego included bags of paper inthe goods bundling of its products. For bringing in-storegoods home, paper bags have now become the norm. The first LEGO Company block constructed from PET, a material that has been recycled, was unveiled by the company also last year (Bagga, et. al, 2023).
• Rising of investments: The increase in expenditures in digital goods, the removal of fossil fuels from its plastics blocks, and the expense of integrating increased raw materials as well as energy costs all contributed to the organization's first-half operating revenue being lower than expected.
• Green energy: With the use of solar panels and some other renewable sources of energy, the company can effectively introduce green energy. Lego has embarked on a number of initiatives, one of which is to utilize more green energy, particularly in its factory and places of employment. With green energy, the company can promote sustainability and can gain huge importance in terms of protecting the environment.
• Strategic practices: Creating projects is a key component of making strategic growth that will support the longevity of the business. The introduction of a novel product or the creating a marketing plan to attract to a newer market is thestrategic expansion or a step which Lego can take as a part of its leadership and change module (Canterino, et. al, 2020). For strategic decision- making theprograms frequently need substantial finance and assets, unlike natural growth. The strategic initiatives include approaches, investment, generation of capital, planning, etc.
• Partnership, acquisitions, and mergers: To generate high rewards for the company then, in this case, partnerships,mergers, and acquisitions are becoming important. Although it is a veryriskier optionit also has the potential to generate far higher earnings than the other expanding categories. Because there is strength in figures, a correctly executed merger, partnership, or acquisition may help the business expand its customer, penetrate an unfamiliar market, or broaden the variety of goods and services it offers. This will surely help Lego in its future growth.
• Internal support: To increase profits internal growth strategy is important in optimizing the business. Internal growth strategy is all about the companyutilizing itsown internal assets, much like natural development. Using existing resources is the main idea behind internal support. Lego can cutunnecessary spending and runa business by outsourcing some of its activities rather than adding additional staff members. Sometimes, internal growth can be proven challenging because it forces companies in terms of processes which eliminate the focus on external factors of the market.
• Organic support: The utilization of internal resources is calledorganic growth. With organic growth, Lego can expand its operations with the use of internal resources (Le Dé, et. al, 2021). Lego can make its production more efficient in a shorter time by using all its available resources which ultimately leads to an increase in sales and revenue generation.Utilizing organic development has the benefit of relying on independence and avoiding borrowing. To fund strategic ideas and practices, organic support is needed to generate revenue and also support future growth.

Conclusion

Under Jorgen Knudstorp's direction, Lego accomplished this remarkable comeback. Emphasis was made on key principles and goods produced by the company. With the help of clearly defined authorities and management arrangement that prioritizes profit growth was achieved. The focus of the company was to generate a high return on purchases and an expensive pricing approach. The company produced a return to fundamental principles about the heritage of Lego, the high standard of its products, and the worth that it offers to both clients and commercial consumers. The essential requirements for success played a crucial role in this procedure. The slogan of Knudstorp was to get closer and closer to its customers. Fresh product concepts were assessed throughout the product's creation procedure by utilizing focus groups designed for children and AFOLs, adults who are admirers of Lego (Austin, et. al, 2022). For Knudstrop it was difficult to arrive at the most appropriate conclusions, he would take into account ideas from a variety of perspectives. As compared to Knudstorp's other predecessors, he decided to choose a strategy that was less tightly controlled and much as there's not one correct method to construct a Lego set.

References

Books and Journals

• Austin, S., Millar, C.A. and Christmas, S., 2022. Case study: Perspectives on the use of LEGO® bricks in the biochemistry classroom.Essays in Biochemistry.66(1). pp.53-63.
• Bagga, S.K., Gera, S. and Haque, S.N., 2023. The mediating role of organizational culture: Transformational leadership and change management in virtual teams.Asia Pacific Management Review.28(2). pp.120-131.
• Behnamnia, N., Kamsin, A., Ismail, M.A.B. and Hayati, A., 2020. The effective components of creativity in digital game-based learning among young children: A case study.Children and Youth Services Review.116. p.105227.
• Canterino, F., Cirella, S., Piccoli, B. and Shani, A.B.R., 2020. Leadership and change mobilization: The mediating role of distributed leadership.Journal of Business Research.108. pp.42-51.
• Feinberg, R. and Watson-Gegeo, K.A. eds., 2021.Leadership and change in the Western Pacific. Routledge.
• Isa, S.S. and Liem, A., 2021. Exploring the role of physical prototypes during co-creation activities at LEGO company using case study validation.CoDesign.17(3). pp.330-354.
• Kennedy, K., Campis, S. and Leclerc, L., 2020. Human-Centered Leadership:: Creating Change From the Inside Out.Nurse leader.18(3). pp.227-231.
• Le Dé, L., Gaillard, J.C., Gampell, A., Loodin, N. and Hinchliffe, G., 2021. Fostering Children's Participation in Disaster Risk Reduction Through Play: A Case Study of LEGO and Minecraft.International Journal of Disaster Risk Science.12. pp.867-878.
• Lee, Y., Douglass, A., Zeng, S., Wiehe Lopes, A. and Reyes, A., 2022. Preparing early educators as frontline leaders and change agents with a leadership development initiative.International Journal of Child Care and Education Policy.16(1). pp.1-18.
• Matricano, D., Candelo, E., Sorrentino, M. and Cappiello, G., 2022. Investigating the link between intellectual capital and open innovation processes: a longitudinal case study.Journal of Intellectual Capital.23(3). pp.538-557.
• Pinto-Llorente, A.M., 2022. Developing computational thinking using lego education WeDo at 4th grade of primary education: a case study.InResearchAnthology on Computational Thinking, Programming, and Robotics in the Classroom(pp. 156-174). IGI Global.
• Walk, M., 2023. Leaders as change executors: The impact of leader attitudes to change and change-specific support on followers.European Management Journal.41(1). pp.154-163.