How LEGO used Agile Principles to Accelerate Innovation

Rita McGrath
8 min readAug 18, 2022

Agile methods — in which work is done in parallel by cross-functionally staffed teams — has been the subject of a lot of hype. How refreshing, then, to discover examples of firms making it work in real life. One of the protagonists of the Lego story, Lars Roost, will be partnering with me in person at the World Agility Forum September 23–24.

In traditional structures, things can only move as fast as the slowest party to the transaction. Instead, imagine creating teams that have all the needed capabilities and clear processes for getting help from outside the team — such as support from compliance, legal and HR. Now, instead of customer issues being splintered among different work groups, everybody can get focused on identifying, developing, and implementing the best solution.

Leaving bureaucracy behind at LEGO

The LEGO Group dug itself out of a near-death experience in 2003 by, among many other things, creating an Enterprise Platform which created a culture of continuous improvement in all its key management processes. Digitization was a huge part of this transformation, which took the better part of a decade and was widely credited with helping the company’s transformation. An example of how it used digital technologies in a clever way was its “Legos Ideas” initiative which allowed fans to submit ideas for new products, shortening the product development time and effectively pre-testing concepts for market acceptance.

But by 2016, LEGO’s leadership began to consider the limitations of its traditional enterprise platform from the perspective of digital customer engagement. Its “products” had become increasingly digital, and unlike a durable Lego brick, digital offerings can change (and go obsolete) very quickly. The company concluded that it needed to add an “engagement” platform to facilitate the continuous improvement of its digital products.

The mandate for this platform was to facilitate:

· Continuous delivery of functionality, with a turnaround time of days or weeks rather than months or years;

· 24/7 uptime so that unpredictable events, such as surges in demand for movies on the website, didn’t derail the customer experience; and

Rita McGrath

Columbia Business School Professor. Thinkers50 top 10 & #1 in strategy. Bestselling author of The End of Competitive Advantage & Seeing Around Corners.