Is innovation your team’s biggest strength or its Achilles’ heel?
Lately, I've been leading a lot of workshops about growth, innovation, and leveraging change.
One of these sessions was with a team that was facing an exceptional amount of disruption in their industry. I was hired to help them see the opportunity in front of them to do things differently and seize it.
As I thought about how to open the session, I decided that I wanted to inspire this team by talking about the power of inflection points. I wanted to highlight stories of other organizations that had faced similar pivotal moments and come out stronger on the other side.
With my team’s help and research, I learned that many companies we know and recognize have been through these kinds of major turning points. The story I ultimately chose to share at the workshop was about LEGO.
LEGO’s story stood out to me because it’s both a cautionary tale and an inspiring example of innovation. It shows what can happen when innovation goes unchecked and also what’s possible when a team intentionally makes innovation a part of its culture and identity.
I’ve always viewed the start of a new year as a natural turning point. As we step into 2026 and reach for new goals, the lessons we can draw from this story feel especially important.
So, without further ado, here is the inspiring story of LEGO!
The company got its start in Demark in the 1930s when founder Ole Kirk Christensen began making toys out of wood. Eventually, he named his company LEGO, which (sort of) translates to “play well” in Danish.
After WWII, Christensen started experimenting with a brand-new material that could be molded into all kinds of shapes: plastic. In 1949, he came up with a mold that would allow toy bricks to interlock. He hoped that his discovery would open up a whole new world of possibilities for play.
He was absolutely right. LEGO took off, and by the ’80s, profits were doubling every five years. The little plastic blocks had been extremely popular with Baby Boomers—the largest generation ever at that point—as they grew up, and now, the Boomers’ children loved them, too. LEGO became an iconic household name, so much so that any plastic block toy was now called a LEGO, just like many of us in the U.S. call tissues Kleenex or bandages Band-Aids.
By the early ’90s, other manufacturers had caught up. Competitors were making cheaper alternatives, and the toy market landscape was changing. Kids were starting to want more complex toys and video games, and LEGO couldn’t shake its reputation as a “boy” toy, which meant less mass appeal.
The company knew they had to do something big and different to stay relevant. So, they leaned into innovation—and though they couldn’t know it at the time, they leaned in a little too much.
LEGO tripled their offerings and jumped into entirely new markets. They began producing electronics and video games, building amusement parks, and partnering with well-known brands and franchises. They chose to enter markets where they didn’t have any competition, thinking they could come in and completely dominate.
At the time, LEGO was idolized for their approach to innovation and their fast-paced growth. Other organizations wished they could have a culture and success like theirs.
The new offerings were really successful . . . until they weren’t. It turned out that there were too many product lines and not enough sales, and many of their newest ideas weren’t as lucrative or successful as they’d hoped. By 2003, LEGO was almost completely out of cash.
How could this happen to a company that had been so successful for so many years? How could everything they’d done to grow and stay relevant have landed them here?
It took time and perspective, but eventually, LEGO’s leaders realized that what they’d failed to do was create a vision and strategy for their innovation. They were building the plane as they were flying it, as the metaphor goes, but they didn’t know where they were going. They had failed to ask the critical questions, such as: Where are we now? Where do we want to go? Why do we want to go there? And how will we do it?
LEGO learned the hard way that accelerated innovation without strategy is reckless. It’s growth for growth’s sake. At this point, LEGO was everywhere and nowhere as a company.
For the first time in their history, they had to bring in outside leadership to try to turn things around. According to the management consultant-turned-new CEO they brought in at that time, innovation itself wasn’t the problem; it was that LEGO’s innovation needed to be reined in. It needed structure, organization, and a new vision to work toward and rally around.
That new vision became “to be recognized as the best company for family products.” Every new idea and product line was put through the vision test, and if it didn’t lead the company to that ultimate goal, they didn’t implement it. LEGO sold their Danish headquarters and their majority stake in the Legoland theme park, moved their manufacturing to places that made more sense for the company, and got smarter about what they produce and how.
What I admire so much about their story is that despite all of the new business lines that didn’t succeed, LEGO still kept innovation at the heart of their culture. After they got clear on their vision, they made it so that everyone in the organization, from the factory workers to the C-Suite, could suggest new ideas and pathways for growth. Those ideas had to be consistent with the overall goal and desired future of LEGO in order to be implemented, of course, but it meant that everyone had a chance to innovate.
As a result of more structured innovation, LEGO opened retail stores, created board games, produced films, and so much more that has brought their vision to life. Today, the company is thriving after reaching double-digit growth in the last couple decades, and the household status of the LEGO brand is stronger than ever.
I love this story because it shows that innovation can go two ways: If we innovate without any kind of strategy or vision, it can be the thing that causes our downfall. But if we can do it in ways that align with a greater vision and purpose and we create a culture where people are empowered to contribute, it can be the thing that launches us into an entirely different dimension.
As we think about the year ahead and the goals we want to bring to life for our teams and organizations, I hope this story reminds you how important it is to stay focused on the bigger picture. Let’s not just grow for the sake of growth; let’s create structure and vision and empower our teams to suggest ideas that can get us there.
If this story inspired you, forward it to your team and discuss it at your next team meeting. You can also read more about the LEGO story in this article!
I’m curious: When you think about organizations that innovate well, which ones come to mind and why? Hit “reply” and tell me all about it. Maybe I'll bring that story into one of my workshops this year!
Cheers to inflection points!
Big hugs,
