Lego Is for Girls

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Features December 14, 2011, 9:49 PM EST
Lego Is for Girls
Focusing on boys saved the toymaker in 2005. Now the company is
launching Lego Friends for “the other 50 percent of the world’s
children.” Will girls buy in?

By Brad Wieners

Walk into one of Lego’s 74 red-and-yellow retail stores around the
world, or even down the toy aisles of your local Target, and two things
are immediately clear: Lego, the Danish maker of plastic toy bricks, is
everywhere, and it’s not for everybody. Rows of classic building kits
for police helicopters, rockets, and trains soon give way to
contemporary releases such as Lego Alien Conquest, a daffy War of the
Worlds scenario with spaceships and laser cannons, and Lego Ninjago, a
“spinjitzu” warrior-themed product line heavy on martial arts and
supernatural powers. Humbled before the Lego Star Wars sets there’s
invariably a baffled parent on a cell phone: Am I meant to get the one
with clone troopers or the Mandalorians? Is it General Grievous who has
the double light-saber?

Linger for a few more minutes and you’ll notice not just the staggering
array of Lego offerings—545 in the last year—but an absence. “They might
as well have a No Girls Allowed sign,” says Peggy Orenstein, author of
Cinderella Ate My Daughter, a fierce, funny investigation of the toy
industry’s multibillion-dollar exploitation of the “princess phase,”
which consumes girls at age 3 or 4. Orenstein is right. After
overreaching and cratering in the early Aughts, the Lego Group
deliberately focused on boys, and the short-term effectiveness of this
strategy is undeniable. Revenue has increased 105 percent since 2006,
according to the privately held company’s 2010 annual report, and Lego
topped $1 billion in U.S. sales for the first time last year. It’s on
track to do that again in 2011. “They’re killing it now,” says Gerrick
Johnson, equities analyst at BMO Capital Markets, who has followed the
company’s impact on listed toymakers such as Mattel and Hasbro for a
decade. Lego, he says, “is the hottest toy company in the boy segment,
and maybe the hottest in toys overall.”

There’s now arguably a “Lego phase” for school-age boys that’s as
consuming as the princess phase. But unlike tiaras and pink chiffon,
Lego play develops spatial, mathematical, and fine motor skills, and
lets kids build almost anything they can imagine, often leading to hours
of quiet, independent play. Which is why Lego’s focus on boys has left
many parents—especially moms like Orenstein—frustrated that their
daughters are missing out. “The last time I was in a Lego store, there
was this little pink ghetto over in one corner,” Orenstein says. “And I
thought, really? This is the best you can do?”

Over the years, Lego has had five strategic initiatives aimed at girls.
Some failed because they misapprehended gender differences in how kids
play. Others, while modestly profitable, didn’t integrate properly with
Lego’s core products. Now, after four years of research, design, and
exhaustive testing, Lego believes it has a breakthrough. On Dec. 26 in
the U.K. and Jan. 1 in the U.S., Lego will roll out Lego Friends, aimed
at girls 5 and up. (French Lego retailers are going rogue and plan to
bring out Lego Friends on Dec. 15.) In Lego’s larger markets, like the
U.S., Lego determined it was better to introduce the new line after the
holidays, when Wal-Mart Stores, for example, would give the line
dedicated shelf space it wouldn’t during the holiday sales rush. The
company’s confidence is evident in the launch—a full line of 23
different products backed by a $40 million global marketing push. “This
is the most significant strategic launch we’ve done in a decade,” says
Lego Group Chief Executive Officer Jørgen Vig Knudstorp. “We want to
reach the other 50 percent of the world’s children.”


Legos come from a small town called Billund, the closest thing Denmark
has to the middle of nowhere. It’s a pleasant enough destination (albeit
one abashed Danes hasten to point out isn’t master-planned, as most of
their towns are). If not for Lego, it would be just a couple of
intersections, or rather rotaries, without stoplights. Because of Lego,
Billund boasts the country’s second-busiest airport, a well-appointed
bakery, and a few boutiques. The population roughly doubles to about
6,500 each day during Lego business hours.

In Billund’s center, the 1924 home of Lego founder Ole Kirk Christiansen
has been renovated into a museum. The Idea House, as it’s known,
highlights Lego’s quaint beginnings (wooden yo-yos and a pull-string
wooden duck were among its first toys in the 1930s), as well as its
values. Christiansen’s motto—det bedste er ikke for godt, “only the best
is good enough”—is why Lego still uses more expensive plastic than
rivals such as Montreal-based Mega Bloks, which sells bricks, on
average, at 40 percent of the price. It also explains why, according to
a 2010 survey by the Reputation Institute, Lego is the No. 1 admired
brand in Europe, No. 2 in the U.S. and Canada, and No. 5 globally.

The Idea House nods to Lego’s success in video games (Lego Star Wars),
programmable robots (Mindstorms), board games (Creationary), iPhone apps
(Lego Photo, which renders snapshots in Lego), and even board games that
work with an iPhone app (the Life of George, which is shaping up as a
hot holiday gift). Yet Lego’s core technology hasn’t changed since 1958:
snug stud-and-tube bricks that snap together and hold fast—and somehow
come apart easily. Lego’s competitive edge is precision; the tolerance,
in engineering terms, of its Lego-branded studs is 1/50th of a
millimeter, 10 times finer than a hair. Lego has its own term for its
click-fit: clutch power. How clutch power is achieved is as closely
guarded as the Coke recipe.

Among the “10 characteristics for Lego” set forth in 1963 by the
founder’s son, Godtfred, is: “For girls and for boys.” Today, girls and
boys play equally with Duplo, Lego’s bigger bricks for toddlers. But
starting at the princess phase, Lego’s smaller, more intricate kits skew
“boy.”

To develop Lego Friends, Knudstorp relaunched the same extensive field
research—more cultural anthropology than focus groups—that the company
conducted in 2005 and 2006 to restore its brand. It recruited top
product designers and sales strategists from within the company, had
them join forces with outside consultants, and dispatched them in small
teams to shadow girls and interview their families over a period of
months in Germany, Korea, the U.K., and the U.S.

The research techniques and findings have been controversial at Lego
from the moment it became clear that if the company were serious about
appealing to girls, it would have to do something about its boxy
minifigure, its 4-centimeter plastic man with swiveling legs, a yellow
jug-head, and a painted-on face. “Let’s be honest: Girls hate him,” says
Mads Nipper, the executive vice-president for products and markets,
Lego’s equivalent of a chief marketing officer. In terms of Lego
iconography, the minifigure is second only to the original studded
brick. It’s as hallowed as a 1 5/8th-inch piece of plastic can ever be.


The ultimate decision about how much tweaking might be done to the
beloved minifigure rested with Knudstorp. Just 36 when he was promoted
in 2004, Knudstorp is only the fourth CEO of Lego Group, and the first
from outside the founding family. Six-foot-three but not imposing,
Knudstorp wears small circular specs and blue Lego cuff links, and has
rushes of enthusiasm more typical of an American than a Danish
executive. His passion for Lego Friends comes partly, he says, “from
casual observation: I have two wonderful daughters next to my two sons,
and they are in a very narrow age range, 4 to 10, so I have a little
home study. They all love to build, but certainly they play in very
different ways.”

Knudstorp completed two master’s degrees (in economics and business
administration, with coursework at MIT’s Sloan School of Management and
Harvard) and a doctorate (economics) back in Copenhagen before going to
work for McKinsey, the global consulting firm. At 30 he was one of the
oldest associates at McKinsey’s Paris office; three years later he ran
its recruiting for all of Europe. Three years after that, following a
six-month stint as interim chief financial officer, he took charge of a
Lego Group in crisis; according to its own financial records the company
was losing nearly $1 million per day. During his first months in charge,
Knudstorp says, “Hundreds of consumers were writing to us saying,
‘please don’t die.’ ”

To get Lego back on track, he outsourced the Legoland theme parks,
selling the resorts, with Blackstone Group, a Lego partner, to Merlin
Entertainments Group for $800 million in 2005. That same year, Knudstorp
supervised the restructuring of the company’s financial governance so it
would be less vulnerable to credit crunches. The Lego Group has a
corporate parent, Kirkbi, an investment firm that owns 75 percent of the
company (and 28 percent of Merlin); the other 25 percent is held by the
Lego Foundation, administered by the Christiansen family. And Knudstorp
reduced the number of elements Lego designers could draw upon to create
new kits from 12,900 to 7,000. Each new element introduced requires new,
expensive molds, plus changes in the global supply chain. He pushed Lego
designers to be more creative with the existing parts.

Arguably nothing he’s done has meant more to Lego than sponsoring the
research teams that embedded with families to understand how Lego kids
live and play. “If I’m honest, I didn’t know what the strategy was,”
Knudstorp confesses of his first couple years as CEO. “Lego had done
what so many companies had done, which is to stretch the brand, and I
wasn’t sure if [the crisis] was because Lego had stretched too far, or
if it was just a very hard strategy to execute. At first I actually
said, let’s not talk about strategy, let’s talk about an action plan, to
address the debt, to get the cash flow. But after that we did spend a
lot of time on strategy, finding out what is Lego’s true identity.
Things like, why do you exist? What makes you unique?”

During ’05 and ’06, the Lego “anthros,” as the research teams have been
called, discovered some underappreciated cultural gaps. The idea of
creative play as conducive to learning, or even formal education, is an
article of faith at Lego that goes back to its founder, who defended his
decision to become a toymaker during the Great Depression by pointing
out that all animals use play to develop their brains. In Japan,
however, Lego found that study and play were more clearly delineated.
Few Japanese parents bought Lego, as they do in Germany or the U.S.,
because they were “toys with vitamins in them,” as Lego senior director
Søren Holm only half-jokingly puts it.

American boys, meanwhile, turned out to be the least free of any group
Lego tracked. British and German boys are far more likely to play
unsupervised in yards and wooded areas and even have greater latitude in
decorating their bedroom walls. Among slightly older American boys, 9 to
12, building with Lego represented a rare chance to be left alone. (On
one subject, boys of all ages and nationalities agreed: A castle without
a dragon is worse than no castle at all.)

Lego won’t say how much it spent on its anthropology, but research went
on for months and shattered many of the assumptions that had led the
company astray. You could say a worn-out sneaker saved Lego. “We asked
an 11-year-old German boy, ‘what is your favorite possession?’ And he
pointed to his shoes. But it wasn’t the brand of shoe that made them
special,” says Holm, who heads up the Lego Concept Lab, its internal
skunkworks. “When we asked him why these were so important to him, he
showed us how they were worn on the side and bottom, and explained that
his friends could tell from how they were worn down that he had mastered
a certain style of riding, even a specific trick.”

The skate maneuvers had taken hours and hours to perfect, defying the
consensus that modern kids don’t have the attention span to stick with
painstaking challenges, especially during playtime. To compete with the
plug-and-play quality of computer games, Lego had been dumbing down its
building sets, aiming for faster “builds” and instant gratification.
From the German skateboarder onward, Lego saw it had drawn the wrong
lessons from computer games. Instead of focusing on their immediacy, the
company now noticed how kids responded to the scoring, ranking, and
levels of play—opportunities to demonstrate mastery. So while it didn’t
take a genius or months of research to realize it might be a good idea
to bring back the police station or fire engine that are at the heart of
Lego’s most popular product line (Lego City), the “anthros” informed how
the hook-and-ladder or motorcycle cop should be designed, packaged, and
rolled out.

Encouraged by what it had learned about boys, Lego sent its team back
out to scrutinize girls, starting in 2007. The company was surprised to
learn that in their eyes, Lego suffered from an aesthetic deficit. “The
greatest concern for girls really was beauty,” says Hanne Groth, Lego’s
market research manager. Beauty, on the face of it, is an unsurprising
virtue for a girl-friendly toy, but based on the ways girls played,
Groth says, it came, as “mastery” had for boys, to stand for fairly
specific needs: harmony (a pleasing, everything-in-its-right-place sense
of order); friendlier colors; and a high level of detail.

“It was an education,” recalls Fenella Blaize Holden, an under-30
British designer, on the process of getting Lego Friends made. “No one
could understand, why do we need more than one handbag? So I’d have to
say, well, is one sword enough for the knights, or is it better to have
a dagger, too? And then they’d come around.”

Lego confirmed that girls favor role-play, but they also love to
build—just not the same way as boys. Whereas boys tend to be
“linear”—building rapidly, even against the clock, to finish a kit so it
looks just like what’s on the box—girls prefer “stops along the way,”
and to begin storytelling and rearranging. Lego has bagged the pieces in
Lego Friends boxes so that girls can begin playing various scenarios
without finishing the whole model. Lego Friends also introduces six new
Lego colors—including Easter-egg-like shades of azure and lavender.
(Bright pink was already in the Lego palette.)

Then there are the lady figures. Twenty-nine mini-doll figures will be
introduced in 2012, all 5 millimeters taller and curvier than the
standard dwarf minifig. There are five main characters. Like American
Girl Dolls, which are sold with their own book-length biographies, these
five come with names and backstories. Their adventures have a backdrop:
Heartlake City, which has a salon, a horse academy, a veterinary clinic,
and a café. “We had nine nationalities on the team to make certain the
underlying experience would work in many cultures,” says Nanna Ulrich
Gudum, senior creative director.

The key difference between girls and the ladyfig and boys and the
minifig was that many more girls projected themselves onto the
ladyfig—she became an avatar. Boys tend to play with minifigs in the
third person. “The girls needed a figure they could identify with, that
looks like them,” says Rosario Costa, a Lego design director. The Lego
team knew they were on to something when girls told them, “I want to
shrink down and be there.”

The Lego Friends team is aware of the paradox at the heart of its work:
To break down old stereotypes about how girls play, it risks reinforcing
others. “If it takes color-coding or ponies and hairdressers to get
girls playing with Lego, I’ll put up with it, at least for now, because
it’s just so good for little girls’ brains,” says Lise Eliot. A
neuroscientist at the Rosalind Franklin University of Medicine and
Science in Chicago, Eliot is the author of Pink Brain Blue Brain, a 2009
survey of hundreds of scientific papers on gender differences in
children. “Especially on television, the advertising explicitly shows
who should be playing with a toy, and kids pick up on those cues,” Eliot
says. “There is no reason to think Lego is more intrinsically appealing
to boys.”

Maybe not, but even Knudstorp acknowledges that Lego’s girl problem will
be hard to conquer. Lego sponsors a series of clubs called First Lego
League to get kids interested in science. Recently, Knudstorp attended a
Lego robotics contest and spoke to a Berkeley (Calif.) professor whose
daughter excelled. “We’re seeing lots of girls perform extremely well,
but her mother said to me, she won’t say that she’s a ‘Lego kid’ because
that’s a boy thing,” Knudstorp says. “I don’t have any illusions that
the girls business will be bigger than the boys business, but at least
for those who are looking for it, we have something to offer.”

In the U.S., Wal-Mart, Toys “R” Us, and Target all plan to carry Lego
Friends. Target’s Stephanie Lucy, vice-president and merchandise manager
for toys and sports goods, says the Minneapolis-based department store
will introduce Lego Friends on an end-cap (at the end of an aisle), then
shelve it with other girl-oriented toys, not with the rest of the
Lego—all currently in the boy section. As long as girls find it, Lucy
says, “I believe it will do very well.”

Grown-up Lego hobbyists, who gather frequently for weekend conferences,
have their own acronym, AFOL, for Adult Fans of Lego. AFOLs will also
factor in Lego Friends’ performance. “Oh, we’re going to buy Lego
Friends,” says Joe Meno, “but we’re going to buy it for all the wrong
reasons.” Meno is co-author of the new book The Cult of Lego and editor
of the BrickJournal, a glossy fanzine. “We want the sets for the new
colors. One of the colors is ideal for a Perry the Platypus I want to
build.” The lady minifig, he predicts, “I’ll probably toss aside.”
Stupid boys.

Wieners is an executive editor for Bloomberg Businessweek.

http://www.businessweek.com/magazine/lego-is-for-girls-12142011.html