Jørgen Vig Knudstorp

Knudstorp was thirty-six, a former McKinsey consultant who had been at Lego for three years, when the Kirk Kristiansen family made him chief executive in October 2004. The company had lost ≈ DKK 1.9 billion that year on ≈ DKK 6.3 billion of revenue, was close to breaching its loan covenants, and had spent the previous decade responding to the expiry of its patents and the arrival of video games by trying to become an entertainment company — theme parks, television, clothing, software, action figures without bricks — while doubling the number of unique elements it moulded to around 13,000. Kjeld Kirk Kristiansen, the founder's grandson, stepped back from running it and put in his own money.

Knudstorp's plan was the opposite of what a growth consultant would be expected to write. He sold 70% of the Legoland parks to Blackstone's Merlin for ≈ DKK 2.4 billion, cut the element count roughly in half and the colour palette with it, closed the non-brick lines, cut a thousand jobs, and required every product to earn 13.5% on sales or be dropped. He also moved production to Mexico and the Czech Republic, and in 2006 outsourced much of it to Flextronics — a decision he reversed within two years when quality and cost both went the wrong way. Only after the subtraction did the growth come: licensed themes, adult sets, the company's own stores, Lego Ideas. Revenue rose from ≈ DKK 6.3 billion in 2004 to ≈ DKK 37.9 billion in 2016, the year he moved up to chairman.

The contested parts are the credit and the price. The plan was drafted with a chief financial officer, Jesper Ovesen, who left in 2007, and funded by the family, and the narrative that a young consultant saved Lego alone is a simplification the company has not discouraged. The parks were sold at what turned out to be a low price — Kirkbi later spent a great deal more buying Merlin back — and the outsourcing was a mistake he acknowledged. And his first year as chairman, 2017, was the company's first decline in thirteen years, with 1,400 job cuts and a chief executive, Bali Padda, who lasted eight months. The turnaround was real. It was also a team's, a family's and a decade's, and Knudstorp is the first to say so.