Lessons learned from the LEGO turnaround

Lego_marina_bay_sands

As part of my Strategic Management course at the Nanyang MBA, I did a strategy report on LEGO’s turnaround in 2004. I grew up building LEGO and I have been following LEGO’s business for many years. When it came to pick a topic for my strategy report LEGO seemed like the natural choice.

LEGO is a fantastic case study of a successful turnaround of a failing organisation, attributed to selecting the right strategy. The LEGO management took less than 5 years to almost bankrupt what had taken 3 generations 70 years to build. In 2014, the LEGO group announced record net profits of DKK 7 billion after having turned around a net loss of DKK 935m and DKK 1931m in 2003 and 2004 respectfully.

These are my main findings and the key lessons learned from studying the LEGO turnaround.

If you are not familiar with the background of the LEGO turnaround, Economist and expert in Corporate Strategy John Ashcroft has done a very nice case study which is free to download online. www.thelegocasestudy.com

  • Know your core competencies and keep perfecting them. You core competences should be your competitive advantage and you don’t want to forget that. In the late 1990s LEGO experienced stagnating sales and stated to divest into new areas outside of its core competencies. The new product lines generated short term sales {DKK8,379m in 2000 DKK10,116m in2002 DKK9,475m in 2001}. However, the massive divesting was followed by large costs {DKK(9,000m) in 2000, DKK(8,554m) in 2001, DKK(9,248m) in 2002}. When the short term sales eventually failed to DKK 7,196m in 2003 and DKK6,704m in 2004, LEGO was carrying costs that it couldn’t bear.
  • Stay focused on your core business and ensure that your core business will always be your main attention. In case of divesting, don’t lose track of your cash flow and what puts money in your pocket. LEGO didn’t lose because it divested, but because it lost track of its core business.
  • Ensure you have the right measures to manage your business. LEGO’s accounting standards deceived the management and didn’t provide them with the necessary information to make strategic decisions. Instead of tracking the performance of individual product lines, the management was deceived by tracking country specific performance, hereby hiding alarming performance results of new product lines.
  • Listen to your consumers, but keep retailers first. LEGO has experienced impressive growth by constantly being close with their consumers. However, they don’t forget to keep their retailers happy with good margins and a well-structured supply chain. By ensuring that you vendors have the right quantity at the right time, you save them money and they will be happier customers.
  • Control you value chain. The value chain is where you create value for your customers and your consumers. Keep improving and optimizing your value chain to stay ahead of the competition.
  • Keep your organisation transparent and encourage communication. LEGO’s management was acting on wrongful information, due to lack of communication. As Jorgen Vig Knudstorp says: “a CEO needs every avenue to the truth that he or she can find”.

8 secret tricks to write your CV

Writing a CV can be tricky. Therefore, have I made a short list of 8 secret tips that I have learned working side by side some of Denmark’s greatest recruiting agents.

1.     You got 10 seconds!

You only have 10 seconds to make a good impression. Always keep that in mind!

Most job postings will have more than 300 applicants applying for the same position. This means you will have to stand out to get noticed. A professional recruiting agent will on average spend just about 10 seconds on each CV during the first sorting process. Do you make it to Second Round; you have made it very fare, because the recruiter will now take the time to get to know you, reading your CV. If you keep that in mind when writing your CV, you are good on your way to get a good job.

2.     Your picture says it all!

Should I use a picture or not? There is only one answer and that is: “YES!” You should always have a photo of yourself, but not just any kind of photo.

There is an old saying :“a picture is worth a thousand words” and this is really true when we speak about your resume. Therefore, put always a great deal of care into selecting your photo.

  • Make sure to look professional in respect to the job you are applying for. If applying for a sales position, please dress business like. What happens is that you are assisting the recruiting agent imagining you working as a sales person.
  • Make sure that your picture, still looks great printed in black and white. The majority of recruiting agents print your resume, which means that colourful details vanish and so does your face. So make sure your picture appears great printed in black and white.

It often makes sense to have a professional, doing some good profile shots of you. The skill that a professional photographer has is to makes you look as good as possible and that will make a big difference to the look of your CV.

3.     Make contact easy!

Don’t leave out your contact information. Make it easy for the recruiting agent to contact you, or to find more information about you. Don’t hide your birthday. For certain positions, age might be important. If your date of birth is not visible, you risk missing an interview.

4.     Highlight the competences that make you unique!

 

This is the secret trick that too few people use. We have already established that you only got 10 seconds to make an impression. Which means you only got 10 seconds to sell your very best competences that make you stand out from the crowed.  For example: if you speak 4 different languages, you should mention it in the very beginning and highlight the text as Bold and Italic. This naturally draws the attention of the reader and gives you a head start.

5.     You have all the pages you need!

A lot of people think that they must fit their CV into one page or two. That is simply not possible if you just got a bit of skills to show off. Therefore don’t limit yourself by pages. Just keep in mind that first page is the most important one.

6.     Make it chronological and structured!

There are a lot of different ways to structure your resume. However, there tend to be one preferable way and that is very simple and chronological. Help the recruiting agent easily read your CV in a chronological order. Don’t use too many unnatural sub-headings, as they tend to destroy the flow.  Keep it to three sub headings: Languages, Work, and Education, and maybe a fourth one to cover awards, courses and events, which are of significance for your profile.

7.     Don’t leave blank spots!

When the competition is rough, you can do so many little things that count as terrible mistakes. Therefore, try not to!

You might have been unemployed for half a year or more, and that usually isn’t very attractive for recruiting agents. Not that is has to matter, but it counts as deductive points. Therefore make sure just to use years when you structure your CV. For instance: from 2009 – 2011 Account Manager – from 2011 – 2012 Division Manager. In reality you were unemployed from February 2011 until November 2011. However, I as recruiting agent don’t know and then won’t care. Should you be asked doing an interview, you will of course answer truthfully. However, no reason to advertise it.
You should always be truthful about your CV, but too large blank spots are just naturally less attractive. So keep that in mind.

8.     Sell your references!

A natural part of a recruiting agent’s job is to check your references. By references I mean former employers, teaches, or other people that in one way or another have worked with you and can give you a recommendation.
Because your resume should be a public paper and hopefully be changing hands of CEO’s and different potential employers, you might want to protect the contact details of your references. However, that doesn’t mean not mentioning them. Keep it to name title and company, and then kindly mention that contact details will be given on request.  The more prominent references you have vouching for you, the more attractive you are to potential employers. Should you have a well known business man on your list of references. Then move references to the top and highlight the name, title, and company.

 

That was 8 simple tricks for you you to get ahead of your competitors. Applying for jobs is just like any other sales job. You got to stand out and you got to be Wise, however, don’t ignore the basic rules of simplicity, structure and readability. Good luck job hunting!

Thought-Leader Series

Alexander Hold - Thought Leader Series

During my time at Aarhus University Institute of Business and Technology I founded and hosted a range of popular guest lectures under the name of the Thought Leader Series.

The concept of the guest lecture series was to invite CEO’s from the business community around the University to speak for the students about their way up the career latter, as well as giving a realistic image of how the theory taught at the university is practiced in the real market.

The guest lecture series was arranged next to my daily studies in my spare time, and I consider the Thought Leader Series as being my entrepreneurial hobby project. The project did not serve to earn money and was a total non-profit arrangement sponsored by Aarhus University.

Read about the CEO’s guest lecturing in the Thought Leader Series here.

The project was supported and sponsored by Aarhus University Institute of Business and Technology, and the Thought Leader Series was recognized by the management.

The Thought Leader Series had great success and experienced its largest audience with its last guest lecture held by Georg Soerensen CEO of MCH.