LEGO Group expands top management
The LEGO Group expands top management from 6 to 22 members to become more adaptable and competitive.
The LEGO Group expands top management from 6 to 22 members to become more adaptable and competitive.
Since 2005 when the LEGO Group underwent the latest major organisational change, the Group has experienced significant growth. The number of employees has risen from 3,500 to 10,000 while turnover nearly has tripled to DKK 16 billion in 2010.
“While our current set up has successfully led to the past years’ superior performance It is now timely to adapt our organization to tackle key challenges and prevent that our vigorous growth creates complicatedness and an unhealthy culture where productivity and thus competitiveness is reduced,“ says LEGO Group CEO Jørgen Vig Knudstorp, and continues:
“On the back of our strong first half results we are able to change from a position of strength”.
From 6 to 22
The recipe to prevent complicatedness and an unhealthy culture is a comprehensive organisational change. The most eye-catching change in the new organisation is a new Corporate Management team, consisting of 22 members instead of previously 6.
“We reduce the number of organisational layers and thus flatten the organisation; this allows us to achieve both a broader and a deeper perspective on the realities of our business, while making it simpler and faster to make decisions – all of which are key to increasing our adaptability,” says Jørgen Vig Knudstorp.
A lifestyle change
Empowering the individual Corporate Management members to make critical decisions sends a strong signal that the LEGO Group wants to collaborate even more across business areas while at the same time reducing the layers from top management to execution.
“We are not merely putting people into new boxes. This is a lifestyle change, where we ask the entire organisation and thus all employees to take a step up. The move will simplify the structure of the company and empower business units in order for us to respond faster and collaborate better to increase innovative solutions to new challenges,” says Jørgen Vig Knudstorp.
A need for experimentation
The structure of the LEGO Group will also change. Today the LEGO Group has five business areas; Global Supply Chain (GSC), Markets & Product(M&P), Community, Education & Direct(CED), Corporate Center (CC) and Corporate Finance (CF).
In future, the LEGO Group will be organised in three areas:
•‘Operations’ will be responsible for the procurement, planning, manufacturing, processing and distribution of LEGO products and focus on Operations capabilities across the LEGO Group.
•‘Marketing’ will be responsible for all commercial functions of the LEGO Group. From product innovation, through development, marketing efforts and sales to customers and consumers and market operations. Marketing will combine the current functions in CED and M&P.
•‘Business Enabling’ will be responsible for supporting the overall business of the LEGO Group. This new area will mainly comprise functions from the current CC and CF.
Jørgen Vig Knudstorp stresses that the change is not a cost-cutting exercise but rather a preparation for the future risks and opportunities that the LEGO Group faces, as a consequence of the major trends globalisation and digitalisation:
“The LEGO Group must be highly adaptive to change, and we have to be able to adjust, experiment and learn in a systematic, disciplined creativity that calls for collaboration across company functions. The new organisation will enable us to do that,” says Jørgen Vig Knudstorp.