Chatting to the CEO: The LEGO Group’s future

Despite LEGO being a very traditional toy, the LEGO Group’s CEO Bali Padda has a number of ideas about how it might adapt for the future

The LEGO Group’s CEO, Bali Padda, is determined to be a change maker in his role at the top of the company. With recent US growth figures proving to be disappointing, he has spoken to several business publications about the need for the company to be ready for change. When he spoke to some of the world’s biggest LEGO fans in Billund, he hinted at some of the company’s future plans.

‘We need to be better at sensing what’s going on in the world around us and changing,’ Padda said when asked about his priorities for the LEGO Group’s future. He intends to ensure that the company is constantly engaging with consumers, so that it will still be relevant in 15 or 20 years. Although the world is changing, he explained, ‘we are about the brick and want to remain true to that.’

In his new role, his goal is to prepare the company for 2025, ready for the future and next generation of leadership. Despite adult fans making up only a small percentage of LEGO customers, the CEO confirmed during the group discussion held at the soon-to-be-finished LEGO House that the company intends to keep both children and AFOLs in mind.

In reference to clone brands, Padda described them as ‘not good’, noting that he feels fair, honest competition is healthy. He found it ‘disheartening’ that certain AFOLs had taken the decision to work with China-based clone brands.

The discussion landed on digitalisation, where Padda reiterated that combining digital and physical products is an area of interest for the LEGO Group. The LEGO Life app has proven successful so far in terms of the number of downloads, and the CEO described the number of shares on the app as ‘very heartening’. He said the most interesting thing about LEGO Life as an app is the way it encourages physical building.

A question that Padda and the team at the LEGO Group are asking is whether ‘intelligence’ can be brought to the brick. ‘There are different ways of doing that,’ Padda said. ‘We’re doing the coding, we’re looking at ways of making the brick more intelligent.’ It’s a long term project in the development phase, with no set timeframe for completion.

In the long term, the LEGO Group intends to replace ABS with a more sustainable material. ‘We already have the first 100, or just over 100, people working on this right now. So we’re taking it very seriously.’ Padda explained that the company is working with other firms and universities to discover a suitable replacement for ABS plastic. ‘It’s a big goal, it’s very ambitious for us.’

Padda confirmed that the LEGO Group is looking to achieve ‘more sustainable growth’ after years of surprisingly buoyant increases in both sales and profits. He noted that whilst the toy industry has been stagnant, the LEGO Group has continued to grow.

With 2018 marking 40 years of the modern minifigure and 40 years of Classic Space, Padda was asked if anything special was planned. ‘You’ll have to wait and see,’ he smiled, cryptically. Although it is fun to look back and celebrate such anniversaries, it is clear that the current CEO is firmly focussed on looking forward.

Read part one and part two of the conversation between the LEGO Fan Media representatives and Bali Padda.