With Kjeld Kirk Kristiansen stepping down from the board of directors, Brick Fanatics looks back at the history of family ownership that has made the LEGO Group unique among toy giants
It was confirmed that Kjeld Kirk Kristiansen will be stepping down from the LEGO Group’s board in a move that has been intended since the family came up with a succession plan. As a family owned business, the LEGO Group does not have to answer to shareholders or market demands, something that has arguably helped in times when other companies struggle to plan for the long term.
While Kirk Kjeld Kristiansen has been active in the company for decades, it has always been a family business, with each new generation taking responsibility for what has become a global company.
In 1932, what would become known as the LEGO Group was founded by Ole Kirk Kristiansen. Initially he was creating wooden toys, as prior to making toys he had been building furniture.
Ole Kirk asked his employees to come up with a new name for the venture, with a bottle of wine for the winner. None of the suggestions quite lived up to what he was looking for, so he went with his own idea – LEGO. It was after playing around with the Danish words leg and godt (play and well) that he came up with the contraction.
Right from the beginning, it was a family business. Godtfred Kirk Christiansen was one of Ole Kirk’s sons, and worked with his father in the early days of LEGO. In 1934, he carved his father’s motto, “Only the best is good enough”, and hung it up on the workshop wall. It is in 1950 that he became junior managing director, which he briefly resigned from in 1952 when he had a dispute with his father about expanding the factory.
By 1953, Ole Kirk was much less involved in day-to-day management and Godtfred took on responsibility for the running of the business, appointed managing director in 1957. He oversaw huge growth, increasing the LEGO Group’s production capabilities significantly in the early 1970s.
It was in 1973 that Godtfred stepped down as managing director and took up the role of chairman of the board of directors, which he held until 1993. Everything was put in place so that there would be a smooth transition from one generation to the next, with Vagn Holck Andersen acting as a vital link between father and son.
In 1979, Godtfred’s son, Kjeld Kirk Kristiansen was appointed president and CEO after two years as part of the management team. In the previous few years, Kjeld had begun to introduce new ways of thinking into the company, emphasising that the LEGO system was much than just a toy. Godtfred resigned as chairman of the board, handing over to Kjeld, in 1986.
While the 1980s was a successful decade for the company and the 1990s started well, by 1998 the company was in difficulty. Day-to-day operations were passed from Kjeld to Poul Plougmann, who had a turnaround strategy to implement.
The respite was short lived, as the survival of the LEGO Group was in doubt after the company posted a huge deficit in 2003. Kjeld stepped down as CEO and appointed Jørgen Vig Knudstorp to replace him. He remained as vice chairman of LEGO Group’s board of directors and chairman of the LEGO Foundation’s board.
A plan was put in place to transition from Keld Kirk to his son Thomas, who would be the active member representing the fourth generation of the Kristiansen family. In 2016 he took up a place on the LEGO Group’s board of directors and was made chairman of the LEGO Foundation’s board. With Kjeld stepping down from the LEGO board in 2019, Thomas will be deputy chairman and will represent the Kristiansen family.