Featured Research: Collaborating with Customer Communities: Lessons from the Lego Group

Our series on featured research articles continues. Today I want to recommend a paper by fellow researchers Yun Mi Antorini (Aarhus University) and Albert M. Muñiz, Jr. (DePaul University, Chicago) as well as Tormod Askildsen (LEGO Group). They tell the story of how LEGO learned to use sophisticated crowd interaction for mutual benefit and explain some core rules of co-creation.

MIT sloan review coverCollaborating With Customer Communities: Lessons From the LEGO Group

By: Yun Mi Antorini, Albert M. Muñiz, Jr.and Tormod Askildsen

Availible at: MIT Sloan Review

 

Lego users have a long tradition of innovation and sharing their innovations with one another — activities that the Internet has made much easier.Long before evreyone was talking about co-creation and user  communities, LEGO fans had "Lugnet", a universe of niche communities of people sharing their creations in LEGO.

As Lego managers became more aware of innovations by the company’s adult fans, the managers realized that at least some of the adult fans’ ideas would be interesting to the company’s core target market of children.

Historically, Lego was an extremely private company that tightly controlled its products and intellectual property. The company’s public position was “We don’t accept unsolicited ideas.”

However, things began to change in the late 1990s following the introduction of a new line of kits called Lego Mindstorms, which contained software and hardware to create small customizable and programmable robots. Sophisticated users found ways to hack into the code and adapt the new products; they talked about their innovations on independent websites.

This presented Lego management with a choice: either pursue legal action against the hackers or invite users to collaborate on new products and applications. The company concluded that litigation would be difficult and costly — and also that there could be significant advantages to collaborating with users.

Through trial and error, Lego has developed a solid understanding of what it takes to build and maintain profitable and mutually beneficial collaborations with users.

In their paper, Antorini, Muniz and Askildsen examine the emergence of Lego’s user communities, how management’s involvement with user groups has evolved and the five core principles that Lego has formulated for successful interaction with its user groups:

  • To be clear abour rules and expectations
  • To ensure a win-win
  • To recognize that outsiders are not insiders
  • Not to expect one size to fit all (different approaches/ platforms might be needed for different audiences) and
  • To be as open as possible

Read the full article at MIT Sloan Management Review!

About the Author:

Frank T. Piller is a Co-Director of the MIT Smart Customization Group at the MIT Media Lab, Massachusetts Institute of Technology, USA, and a chair professor of management at the Technology & Innovation Management Group of RWTH Aachen University, Germany, one of Europe’s leading institutes of technology. Before entering his recent position in Aachen, he worked at the MIT Sloan School of Management (2004-2007) and has been an associate professor of management at TUM Business School, Technische Universitaet Muenchen. Frequently quoted in The New York Times, The Economist, and Business Week, amongst others, Frank is regarded as one of the leading experts on strategies for customer-centric value creation, like mass customization, personalization, and innovation co-creation. His recent analysis of the crowdsourcing business model “Threadless” (co-authored with Susumu Ogawa), an innovative crowdsourcing business model in the fashion industry, has been elected as one of the Top-20 articles in MIT Sloan Management Review.