This chapter will analyze the organizational culture of the LEGO company, by using aspects of The Cultural Web by Johnson and Scholes. The focus will be on the aspect where the LEGO Group puts their emphasis, e.g. the symbols, power structure, control system, rituals and routines, and stories. The thesis will also focus on which aspects are important to the innovation and these will be analyzed together with Conrad and Poole‟s three aspects of corporate culture. By combining these theories, a stronger analysis will be made and concluded upon.
4.5.1 The Cultural Web byJohnson & Scholes combined with Organizational Symbolism by Conrad & Poole
Symbols:
Symbols within the LEGO Group are important to take into consideration when looking at the corporate culture. The LEGO brand is world famous and the logo of the company has not changed much, since the company‟s origin. This emphasizes the consistence in the brand and makes the brand-recognition stronger.
According to Newson and Haynes (2008) a good logo has several purposes. It should leave an impression on us and it should be recognizable. Furthermore it should have a uniqueness that can separate it from other logos so people can relate the logo to the organization in mind.
Finally, it should age well and be able to translate faithfully across media (p. 237). The LEGO Group logo seems to fulfill all of the above; it is recognizable as it has been consistent almost throughout the entire history of the company and the simplicity of the lo go is believed to have a massive impact, as it is familiar to children and adults all over the world (cf. appendix 9) Looking at the physical surroundings at the LEGO Group, it is clear to see how t he innovation aspect comes to place. The LEGO Group puts high emphasis on open meeting spaces
because, as stated by Kuang (2009) “studies have estimated that the majority of innovations within a company come from passing social contacts--people shooting the breeze at the water cooler, or shouting over the tops of their cubicles” ( p. 1. Cf. appendix 17). Bright colors and relaxed settings are furthermore in focus and it is clear to see how the LEGO Group is
following today‟s trends. The visual representation of the company is a symbol of the corporate culture as is represent how the organization chose to represent itself and its employees. Similarly, the system and all tangible artifacts can be seen as a symbol, as it convey important information about the organization (Brooks, 2009, p. 269)
Power Structures:
The power structure in the company can be linked to the organizational structure. The CEO, Jørgen Vig Knudstorp, is the head of the company. But the LEGO Group is a family owned company controlled by the Kirk Christiansen family fond, with Kjeld Kirk Kristiansen as the deputy chairman and majority shareholder of KIRKBY A/S, which controls 75 % ownership of the LEGO Group (Cf. appendix 16). A part of the identity of the LEGO Group is the
family bond to the Kirk-Christiansen family, which therefore plays a very important strategic role in the LEGO Group and it is therefore a company over which central management can never have complete control (Holden, 2002, p. 168). One could therefore argue that the power structure at the LEGO Group is allocated from the top-down, but as it is a family owned
business, the final saying is not solely on the CEO, but with influence from the family shareholder.
Control System:
The control system at the LEGO group is, based on its organizational structure, generally tight as the employees have to report back to their respective managers. But one could argue, that after the new CEO Jørgen Vig Knudstorp entered the LEGO Group, a more loosely control system has been implemented. Knudstorp is focusing on building credibility with the employees and „managing at eye level‟, hereby being able to talk to t he people on the floor in various departments (O‟Connell, 2009, p. 1. Cf. appendix 20). By implementing a more
loosely power structure in the company, more influence is given to the employees – a factor that can work as a motivation factor, as the employees will feel the y have more saying in the company, instead of just obeying orders from their managers.
The employees at the LEGO Group are being rewarded for their job, rather t han being
penalized for poor work. Especially creative and innovative ideas from employees but indeed also from customers are being rewarded. The LEGO Group puts high emphasis on the fact that there is a LEGO product for all ages, and that no one is too old to play with LEGO products. The LEGO Group has created several educational programs, both for children but indeed also for adults, who want to design more advanced LEGO figures and landscapes (LEGO.com – About Us – Lifelong Play – LEGO Education). By inviting customers to participate in designing and creating new ideas, the LEGO Group is securing the ongoing innovation, which is needed for the company. By including customers, the organization loses some control over its system but is gaining knowledge from its most important consumers – the loyal and deeply dedicated people, hereby ensuring the important innovation of the LEGO Group.
Furthermore, the LEGO Group has chosen to establish an ambassador program with the purpose of nurturing the mutually useful relations between the LEGO Group and its loyal, talented and committed consumers. Persons nominated by LEGO User Groups, select t he LEGO ambassadors globally, which shows how the LEGO Group reward not only its employees but certainly also its consumers, who are contributing to the innovation at the LEGO Group (cf. appendix 1, p.18).
Another way for the LEGO Group to engage with its consumers is by inviting a small group of hackers to work in collaboration with a team of designers from the company. By doing so, the LEGO Group looses part of the control but as Ind & Schultz (2010) states “by opening itself up to an active involvement with these enthusiasts, the company has been able to tap into a rich vein of innovative thinking and has been able to once again make the brand
relevant” (Cf. appendix 15). The LEGO Group is hereby working with the hackers, opposed to against them, and is in that way creating an innovation environment, which includes all of its stakeholders. The LEGO Group is inviting the public to co-create new products as part of its user-driven innovation. An example is with the LEGO MINDSTORMS®. The LEGO Group decided to launch a joint venture with MIT faculty and students but two weeks in, hackers started to create new, more advanced codes for the products. Instead of suing the hackers, the LEGO Group decided to work with them and instead released a developer‟s kit incorporating the best ideas from hackers (Naiman, 2008, p.1. Cf. appendix 19)
Stories and storytelling:
Since the partnership with Lucasfilm Ltd. in 1999, the LEGO Group has become more focused on the concept and power of storytelling. The LEGO Group is continuously developing new products in collaboration with movies and series that are popular among children most recently LEGO® HARRY POTTER™ and LEGO® NINJAGO (LEGO.com – Products).
By combining both popular, well-known figures and stories in its product line as well as creating its own ongoing LEGO characters, the LEGO Group is using storytelling in two strong ways. Thereby, the company manages to express its core values in a new and innovative way.
Another example of the LEGO Group using storytelling can be found in its monthly in-house magazine LEGO® life. An article about the 23-year old Samuel Johnson from Essex, England shows the realization of a young boy‟s dream of becoming a LEGO designer. At the age of 12, Johnson decided he wanted to be a LEGO designer and wrote a letter to the LEGO Group.
He received a letter back from the LEGO Group, which listed everything Johnson had to do in order to become a LEGO designer. Johnson followed the advice and ended up achieving his dream at the age of 23. By the use of this kind of storytelling, the LEGO Group is portraying itself as a company with visions and a company where you as an employee can fulfill your dreams. It is also another way of portraying the values of innovation, creativity and play.
Johnson was only a child when he wanted to enter the LEGO Group but kept developing his ideas and ended up achieving his dream (cf. appendix 7).
This can be seen as a way for the LEGO Group to show a real-life experience of one of its employees, and how innovation is taking place within the company.
Metaphors:
The LEGO Group has created the LEGO® Universe, a massively multiplayer online game with LEGO figures as players in the games. It works as a united universe for the thousands of LEGO fans in the online world. Creating an entire universe with LEGO figures as the main
characters, creates a kind of metaphor for the LEGO Group – a metaphor for inviting its consumers to play online with the figures they have used in real life for so long. This also shows the ongoing innovation and development within the organization. By creating LEGO Universe, the LEGO Group responds to the current trend of digitization.
The focus on innovation within the LEGO Group invites the consumers to develop their own creativity and creates the room for play, which is highly focused on within t he LEGO Group.
The „room for play‟ can be discussed as a metaphor for the LEGO Group and its way of creating innovation within the organization.
The LEGO Group is hereby able to emphasize the innovation process by using metaphors, according to Conrad and Poole, especially towards it consumers. But also towards the
employees and how they see the organization. The focus on creating room for play is highly emphasized in the everyday life at the LEGO Group. The employees are encouraged to co-create new products and ideas, which contribute to the culture that exists within the
organization.
Rituals and Ceremonies:
At the LEGO Group, several ceremonies are taking place throughout the company. One example is the LEGO festivities, which took place all over the world, in November 2010 (cf.
appendix 8). The parties were held to celebrate the company‟s shared vision strategy and can be seen as a form of ceremony according to Conrad and Poole. By gathering people from various departments all over the world, the employees of the LEGO Group are meeting in a more informal way, which is enhancing the culture within the company and helps create relationships beyond the workplace.
4.5.2 Four Corporate Cultures:
As mentioned before, the LEGO Group is operating from a functional organizational
structure, where the employees have a precise job description and a manager to each specific field. Looking at the Four Corporate Cultures model developed by Trompenaars and
Hampden-Turner, it can be concluded that, by operating from a functional organizational structure, the culture within the LEGO Group is an Eiffel Tower culture. The structure is
hierarchical, which is seen in the organizational structure. The communication is task-oriented, as the employees have specific tasks to accomplish, under each department.
The previous section has analyzed the organization of the LEGO Group, as it was before 2004, to be a functional organizational structure, which can be traced back to the findings of Max Weber, Frederick Winslow Taylor and Henry Ford, where the classical approach origins.
On the basis of this, the culture of the LEGO Group can then be concluded to belong to the Eiffel tower culture, seen from the Four Corporate Cultures model.
In 2004, the LEGO Group moved from a more Eiffel Tower culture to an Incubator culture.
The shift in management after a longer period of downside in sale and general turnover, led to a looser structure and a more personal insight from the CEO. It w as the former McKinsey consultant Jørgen Vig Knudstorp, who came to the LEGO Group, not being part of the Kirk Kristiansen family, and was named CEO in 2004. By still focusing on the core product, but simultaneously implementing a new strategy which required a looser structure, Knudstorp chose to push decisions as far down the hierarchy and breaking down some of the hierarchical structures, which the company was known for (O‟Connell, 2009, p.1. Cf. appendix 20).
The change in management emphasized the focus on inno vation, but at a „back -to- basic‟
level. It was important for Knudstorp to keep focusing on the core product, which has been the key focus for the LEGO Group since the beginning. But to keep up with the technology-based games and entertainment a new innovation strategy had t o be implemented. The LEGO Group developed “its own LEGO innovation matrix as a tool to help identify, staff, and
coordinate the different innovations needed for the development of a new product” ( Hjuler &
Robertson, 2009, p. 1. Cf. appendix 14). The new matrix focused on four different areas where the innovation could take place; product, business, communication, and process. This led to more responsibility down the hierarchy instead of it just being the top-managers who were responsible for innovation taking place.
The LEGO Group was therefore moving to the Incubator culture, where the culture is more person-oriented and egalitarian. Creativity is in focus and the employees of the company are expected to come up with ideas of their own to further development. As stated on the LEGO website “We call it clutch power: open, supportive collaboration across a boundless global community where people continuously connect and re-engage in different work r elations. One of the first things you‟ll notice about us is that we interact in a straightforward way built
around honesty, trust and the fact that we truly care about every single individual within t he LEGO Group” (LEGO.com – About Us – Jobs – Working at the LEGO Group).
Trompenaars and Hampden-Turner state that a company will not succeed if it concentrates exclusively on one quadrant in the Four Corporate Cultures model, but should instead be combining aspects of the different cultures in the model. The LEGO Group is still using aspects of the Eiffel Tower culture, as the structure in the company is still shown as
hierarchical. The company is therefore placed both within the Eiffel Tower culture but has recently moved towards the Incubator culture (cf. appendix 6).
It can be argued that the culture within the LEGO Group shows aspect of the two remaining cultures in the discussed model; The Guided Missile and the Family culture. The Guided Missile is an egalitarian, task-oriented culture where team presentations are in focus. The LEGO Group do focus on resolving the tasks within the organizations as a unit, but as it is a functional organizational structure the company is build upon, this culture is not in focus.
Looking at the Family culture, it can also be argued that the LEGO Group has shown aspect of this. The Family culture is very hierarchical and person-oriented and who you are, is more important than what you do (Trompenaars and Hampden-Turner, 2004, p. 26). It can be argued that the LEGO Group started within Eiffel Tower culture with aspects of the Family culture as the family focus was highly emphasized when it was the founder, who worked as CEO. The Family culture puts high emphasis on the fact that the or ganization is family-owned and on the hierarchical gap between parents and children. This could be argued to be the case before the new CEO entered the company in 2004, but as Knudstorp is not part of the Kirk Kristiansen family who founded the company, the Family Culture is being oppressed and replaced with aspects of the Incubator culture, as stated previously.
If taking a look at the optimal management style within the culture at the LEGO Group, it i s important to focus on the above-mentioned shift. That being said, the culture within the
LEGO Group has aspects of both the Eiffel Tower culture and the Incubator culture. Fulfilling the job description within the company is in focus as we still see the functional organizational structure. But also managing by shared excitement is in focus in the LEGO Group. As stated on its website, the LEGO Group puts high emphasis on a free combination of ideas and people, and about caring for every single individual within the LEGO Group. Furthermore,
the phrase „Working Together‟ is seen as an important approach, which is hig hly focused upon when new employees are entering the company (LEGO.com – About Us – Jobs – Working at the LEGO Group).
Looking at the power orientation within the LEGO Group, power is an attribute of the formal position, which can be traced back to the original state of the company. As the LEGO Group moves towards the incubator culture, the power orientation changes from dealing with power position to the power of ideas. Thereby, it becomes possible for all LEGO employees to contribute with ideas to the innovation process, regardless of their position in the hierarchy.
The innovation process at the LEGO Group shows how the employees, as well as the customers, are getting more involved in the development of ideas. By giving them the
opportunity to create their own LEGO figures and come up with new ways of innovating and further developing the LEGO Group and its brand, the company, and here the managers of each department, and its employees are working together to continuously improve the LEGO brand. But as the LEGO Group has not fully moved from the Eiffel Tower culture, the power direction still comes from the CEO and the managers of each department, even though the employees have been given more responsibility and saying as part of the development of the company.
The source of cohesion, as a part of the typologies suggested by Trompenaars and Hampden-Turner (cf. appendix 4) within the LEGO Group shows how employees are held together by common subordination to a boss or manager. But also the shared breakthroughs are shown within the LEGO Group; innovating and discovering new ideas and products in unison are important criteria for the LEGO Group and its employees.
As stated by Trompenaars and Hampden-Turner (2004), “every culture has its own Guiding Star or Watchdog” (p. 34). When discussing this typology, the LEGO Group is showing more of an Incubator culture here, as innovation is the ongoing purpose of the company (cf.
appendix 4). As the four cultures within the quadrant vary in their definition of excellence, it is important to look at how this is shown within the LEGO Group (cf. appendix 4).
Here, the company is leaning towards the incubator culture, as the excellence here lie in the personal creativity and genius. This can again be drawn back to the innovation philosophy of the LEGO Group and how important the creation of new ideas and innovative solutions is.
The LEGO Group puts high emphasis on job satisfaction among its employees. An annual
The LEGO Group puts high emphasis on job satisfaction among its employees. An annual