Management and Leadership Approaches for Lego Group's Q&A Sample

Effective Management and Leadership Approaches for Lego Group's Post-COVID Success

Introduction

The report is all about depicting a clear knowledge regarding the effectiveness of management and leadership approaches that would have assisted the Lego Group in conducting their business. This Danish toy product company was established in the year 1932 and has successfully opened 42 offices across the UK business market. With an emerging revenue of 43.7 billion, the company has been running its business effectively. However, after the effective outbreak of COVID-19, the organisation is seen to be facing issues regarding management and leadership approaches.

However, this report here has discussed the possible changes in management through change management models. Apart from that, it has also discussed a few leadership styles and theories regarding the business and at the same time, it has evaluated the leadership changes in the business of Lego group significantly after the pandemic.

Question 1: Changes in Lego Group discussion through Kotter's 8-Step Change Management Model

The commencement of Jørgen Vig Knudstorp's leadership as Chief Executive Officer (CEO) of The Lego Group in 2004 instigated notable transformations that rejuvenated the organisation and facilitated its extraordinary recovery (Davis, 2022). The examination of these modifications can be assessed using John Kotter's 8-Step Change Management Model, which offers a conceptual structure for comprehending the progression of organisational metamorphosis.

Creating A Sense of Urgency

During Knudstorp's tenure, The Lego Group encountered a critical situation characterised by a decrease in both sales and profitability. The current crisis has engendered a heightened feeling of urgency, necessitating the imperative for transformative transformation. Knudstorp adeptly conveyed the imperative to stakeholders, accentuating the significance of rejuvenating the organisation (Helmold, 2023). The operational margin of the company experienced a notable improvement after a period of poor performance, which can be attributed to a loss of 2.5 billion krona in the years 2003 and 2004. The company's successful turnaround efforts are evidenced by its ability to achieve an operating margin that is well regarded among global high-tech equities.

Building A Guiding Coalition

Knudstorp successfully formed a robust guiding coalition, comprised of a committed group of executives and leaders that collectively embraced his transformative vision. The aforementioned combination offered the necessary skills and influence to facilitate organisational transformation (Waghid, 2023). The decrease in operating expenditures from 70% to 37% of turnover indicates an enhancement in operational efficiency. The observed efficiency is likely to have played a role in the company's capacity to earn increased profits from its revenue.

Form A Strategic Vision

Knudstorp effectively communicated a well-defined strategic vision that placed significant emphasis on the key areas of innovation, product quality, and operational efficiency. The individual sought to realign the organization's strategic direction by emphasising its fundamental principles and concurrently pursuing growth opportunities in the realm of digital ventures. The aforementioned vision functioned as a strategic guide for the subsequent transformations. The company's financial success and value creation for shareholders are evident in the significant rise in return on equity, which has surged from zero to almost 70% (Trawick and Carraher, 2023). Additionally, the equity values have experienced huge growth, escalating from 400 million to over 11 billion DKK.

Enlisting A Volunteer Army

Knudstorp fostered a culture of employee engagement and granted them the authority to actively partake in the process of organisational transformation. This strategy resulted in a workforce that was motivated and engaged, as seen by employees' active participation in idea generation and their active support of the transformation process (Rassanjani et al. 2022). The assertion that the firm's worth would exceed $150 billion if it were valued at the same level as NASDAQ's Facebook highlights the significant evolution of a Danish toy company into a worldwide corporation with considerable potential for valuation.

Enabling Action by Removing Barriers

Knudstorp successfully recognised and effectively addressed the hurdles that impeded the process of change. The individual implemented strategies to optimise decision-making processes, reduce ineffective practices, and promote transparent communication throughout all hierarchical levels inside the organisation. In 2003, Jørgen Vig Knudstorp, who had a leadership position in strategic development, was assigned the responsibility of performing a comprehensive evaluation of the obstacles faced by the company and presenting a detailed report (Waghid, 2023). This assignment was assigned in response to the company's deteriorating financial performance. Prior to joining the organisation, Knudstorp had gained professional experience at McKinsey & Organization.

Generating Short-Term Wins

In order to generate momentum, Knudstorp directed his efforts towards attaining immediate success. The implementation of effective novel products and cost-reduction strategies served as concrete proof of advancement, hence enhancing employees' trust in the ongoing transformation endeavours. The LEGO Company implemented a strategic approach to reduce or terminate several initiatives that were not integral to their primary business operations, including wristwatches, publishing, and other lifestyle items (Rawson and Davis, 2023). Furthermore, LEGO endeavoured to mitigate the financial setbacks linked to their software endeavours and the LEGOLAND parks.

Sustaining Acceleration

Knudstorp effectively integrated the modifications into the organisational culture and operational processes of the company. The individual fostered a culture of ongoing enhancement, originality, and flexibility, ensuring that the organisation conformed to contemporary modes of operation. The sales figures experienced a growth from 9.5 billion Danish Kroner in 2000 to 10.7 billion Danish Kroner. The main catalyst for this expansion may be attributed to increased sales in the American market, complemented by contributions from the Asia/Pacific region and practically all European regions (Anshasi et al. 2022). Furthermore, there was a noticeable increase in the volume of mail-order and online sales facilitated by LEGO Direct. This indicates that The LEGO Company had reached the concluding phase of a substantial change process that had been in progress for the preceding years.

Instituting Change

The implementation of transformation initiatives at The Lego Group resulted in a notable culture revolution characterised by a heightened emphasis on collaborative practices, fostering innovation, and prioritising customer-centric approaches (Carmichael et al. 2011). The aforementioned modifications became firmly ingrained within the organisational structure, resulting in a notable transformation that enhanced the resilience and overall success of the institution.

Evaluation of the Changes

The application of Kotter's 8-Step Change Management Model by Jørgen Vig Knudstorp at The Lego Group has shown notable success. The financial performance of the company had a notable improvement, resulting in its successful reestablishment as a prominent global leader within the toy sector (Cunliffe, 2009). Through the use of strategies such as instilling a sense of urgency, assembling a steering coalition, and proficiently executing each stage of the model, Knudstorp not only revitalised the organisation but also laid the groundwork for enduring prosperity.

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Question 2: Leadership management in Lego group

There was an innovative leadership model created through the integration of behavioural, traits and situational styles in leadership. Currently, transformational leadership is analysed as a modem and prevalent framework in leadership analysis. Therefore, this model was created by Burns in 1978. There is a new leadership model created that has outlined the comprehensive theory in transformational leadership. This is defined as a leadership style that has both societal and individual influences. This is an ideal form that allows the leaders to follow such goals. There Are four major components that are analysed with this concept of transformational leadership. These four components are “Idealised Influence, Intellectual Stimulation, Individualized Consideration, and Inspirational Motivation” (Zou, 2002). This is required for leaders to cultivate, motivate and nurture their followers. Therefore, in order to provide a conversational, inclusive and vibrant culture, there can be a free exchange of ideas and therefore leaders may feel empowered on their personal level.

Idealized influence

This way is used in transformational leadership to influence groups. As in examples these leads are held with high regard by their teams. Also, there are distinct versions provided and community senses in motivating people in order to support firms in the long-term goals and therefore get to their own objectives (Matricano et al., 2022). Therefore, in order to save LEGO, “Knudstorp mainly focused on creating plans and strategies of action to restore the LEGO Group to its glory. There was a regulator conversion done with the customers and staff to show that they were making a wise decision (Zenk et al., 2021). There was a distinct leadership structure provided by Knudstorp with an ancient performance that mainly looked after profitability. This was directed toward the future course of the business, where all shareholders analyzed the facts with clarity. Therefore, it resulted in an effective role model and the one that followed such footsteps, becoming leaders by copying or imitating them.

Intellectual stimulation

This transformational leader fosters an inclusive and diverse environment in order to inspire others in innovation and generate new ideas in firms. There are actively pursuing and unconventional approaches to achieving such objectives. Moreover, this encourages others to question their own values and firm values. Leaders hold the responsibility of fostering innovation and creativity both in themselves and their group (Chen et al., 2021). Thus, with these adherents, these results are improved when it's time for those leaders to ring out creative thoughts and ideas. Therefore, in the case of LEGO, Knudstorp analysed the importance of stimulation in minds in order to have effective changes at the time required. Therefore, analysing the need for changes, he assembled a management team that are comprised of experts on the field of logistics, marketing, production and technology. Therefore, making a team with them, he started to organize meetings with them on a regular basis to have a discussion on the project. Although Knudstorp, analysed that his followers lacked originality, he found that still they required a common goal and direction. Finally, he made the decision to give his followers with voice towards decision-making and also listened to their thoughts and ideas (Grundy et al., 1993). He also provided his employees with freedom of decision-making and analysed their inputs and outputs. At this time also, he provides the employees with utilizing the crowdsourced suggestions. Thus, according to this case study, it can be said that strategic planning and changes can provide benefits to such types of leadership strategies.

Inspirational motivation

This transformational leadership plays an important role in the enhancement of the performance of the employees through employing motivational techniques to boost the team's morale and also setting an example to their followers. Moreover, they are also pleased with their communications that had high expectations in each of their followers and are inspired by their personal levels with a view to winning allegiance with the shared organizational team. It is found that when an individual is more focused on achieving the goals of a firm, they are however motivated to work harder. Moreover, the leaders are encouraged by tiger followers' innovation and creativity (Quinn et al., 1989). Therefore, Knudstorp analysed the need to stimulate the minds in order to effect the required changes. Moreover, he assembled a team of managers that are specialists in teg marketing, logistics, production and technology, He met with those members on a regular basis and had a discussion on the development of the project. Therefore, it is found that after the combination of individual influence through transformational leadership, this inspirational motivation helped in the compensation of the leaders that lacked this charisma.

Individual Cinerarium: This transformational leadership has a strong influence towards fostering a supportive and diversified environment where the differences of the individuals are celebrated and respected (Tushmanet et al., 2004). The members are familiar with each other and also, they listen to the concerns and needs they have. They act as choices and mentors that help the team in developing, passing and becoming self-reliant. Moreover, Knudstorp showed genuine leadership qualities. these qualities are analysed to have a high and scientific effectiveness in the achievement of success for its followers. The main focus of this genuine leadership is to foster cohesion, effectiveness and consistency. Authentic leaders are also dedicated to enduring the long-term viability of firms and preparing for the fluctuating constitution of the market.

Question 3: Potential recommendation

Analysing the overall performance of the Thai company, it can be said that they provided stock performance at times of global lockdown and built with deep roots in a culture of agility and resilience. Knudstorp showed valuable insight in the execution and the company sought with ease in order to meet the future crisis successfully. The LEGO brand has shown a principle that puts their staff first and also customers taking care of their safety and securing the business continuity. Moreover, it can be recommended to this LEGO group that they can also improve more effectively through providing an online medium of services. This is so as the current model of business is mainly focused on providing online services for all goods and services (Jones et al., 2004). This model provides paradoxical leadership that provides a balanced system of services. Moreover, they can also execute strategies where employees can share their ideas with themselves and then provide them to the higher authority. They can also provide their goods and services that are eco-friendly. The customers are more focused on buying toys that are safe for their children. They can also use goods that are fully biodegradable and also can be reused. The leadership requires gearing up and focusing on increasing stamina. As it is suggested to have an online sale of services, this will require more stock to be kept. Therefore, there would also be a requirement to maintain staff, with an efficient knowledge of the operations. The leadership style that is analysed best during the pandemic needs to be informative, and supportive and also have motivational leadership (Sommer et al., 2019). The COVID crisis looked after the leaders to take responsibility and make it to its visibility. Thus, it requires being responsible and visible. There is also a need to show accountability and sharing of various risks with the followers.

Theoretical recommendations

Considering all these effective aspects in the business, the Lego group need some extraordinary recommendations that are based on technology so that their future gets effective and they can achieve success in their business quite easily.

Recommendation 1: The Lego group needs to think about modifying or in other words changing their management style. The company has been to be following a divisional structure in business that has caused some challenges such as organisational conflict in the organisation. Therefore, to mitigate this particular issue, the Lego group need to think about implementing the Nudge Theory in their business system. According to Chung et al. (2023), the Nudge Theory plays a significant role in developing organisational culture. Apart from that, it can also assist in removing negativity from the organisational structure. Therefore, it can be said that Lego Group can use this theory to overcome organisational conflicts in their business.

Recommendation 2: Another effective issue that the company Lego has been facing significantly after the outburst of the pandemic is miscommunication among the employees. Along with that, they have also been facing challenges regarding their employee satisfaction aspect (Graetz et al. 2002). However, applying the “Kübler-Ross Change Curve model” can be the most prominent aspect that can assist in the development of organisational behaviours in the business. As per the mentioned fact of Lindblad, (2022), this particular model performs for the betterment of the organisation's relationships and at the same time, it assists the leaders of the organisation to mitigate employee demands. As in the case of Tesco plc UK, they have applied this particular change management model in their business that has increased their employee satisfaction rate by 56% and at the same time, the employee attrition rate has gone down to 11% from 78% (Tesco, 2023). Therefore, it can be said that the company Lego Group need to implement this particular change management model in their business system so that they can improve these critical challenges.

Recommendation 3: The other most effective lack that has been seen in the management of Lego Group is the marketing and relation with the customers. It has also been observed that the company fails to mitigate the demands of their customers and at the same time, they have not paid any sort of effective value to their consumers so that they can be with the company (Grint, 1997). Therefore, “Bridges' Transition Model” can be the most crucial tool to fix the issues. In order to develop and modify the marketing approach of the company, this model can play the most significant role. According to the fact that Yang et al. (2022) stated, “Bridges' Transition Model” manages a line through which the organisation-to-customer approach gets improved. Apart from that, providing the values of the customers along with maintaining this particular approach, this model can be the probable best choice.

Conclusion

The report here has been developed to deploy a clear understanding regarding the effectiveness of management and leadership style in the purpose of development of the organisation. It has been seen that the company has been facing issues regarding the same and it needs to be mitigated in an early process. Through using some effective change management theories and models along with some technological aspects, this report has successfully managed to portray overcoming aspects of the challenges that the company has been facing and at the same time, it will also perform for the betterment of the company in the near future.

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