Jørgen Vig Knudstorp
Adam Burns:
So you said, “Our vision is to be based on the Lego brick. That’s our heritage and our future.” In this sort of quite fickle, perhaps increasingly digital marketplace, how important are those heritage values?
Jørgen Vig Knudstorp:
They are extremely important and sometimes when I speak about our vision I call it a 2.2 version of the Lego group because Lego actually began in a carpenter’s shop. It was a wooden toy, and only with the emergence of plastics after World War II in Europe Lego became a global pioneer and plastic intrusion, a molding, and that of course became the future of the company from early 1960’s and onwards. If you like you can call that Lego 2.0.
So when we talk about the digital age I talk about a 2.2 version of Lego to signify that we are not leaving the physical world. We’re not leaving the physical grid behind us, but we’re taking the best learning from that and continuing with that as our actual mainstay and core business, but we’re adding the digital revolution to that. But I think the values that we were building through the physical plane will remain also in the digital space because they have turned out to be extremely relevant even in the 21st century.
Adam Burns:
Absolutely. I know that – I don’t wanna focus too much on this, but I know that when you joined Lego was in a degree of trouble, and it had perhaps divested almost to the point of destruction. There was too much kind of stuff going on. How do you now, because the brand is back up and running again, it’s doing incredibly well, which must mean that opportunity after opportunity is coming your way as more and more people again start saying, “Oh, we could do this with Lego.” How do you make sure you don’t repeat those mistakes?
Jørgen Vig Knudstorp:
Exactly, but I agree. I think it’s a golden rule in business that most companies don’t die from starvation; they die from indigestion because there’s so much opportunity if you start opening your eyes to it. In fact, one of the major jobs I think is to cut all the wild weeds and stay focused on really building all the branches that are healthy for your business to build on. One of the rules I stick to is you can really only build an adjacency to your core business every 3-5 years because it’s such a major undertaking in terms of culture and capabilities. You need to build when you do build an adjacency that if you think that’s how you’re going to build your business is to add adjacencies all the time then I think you’re killing yourself, and that’s what we did wrong in the past. Rather than doing one adjacency every 3-5 years we did three to five adjacencies every year. So I think that’s what nearly killed us.
The other thing it does by the way is of course people lose focus on their core business as they pursue these new adjacencies that become the new sexy thing to do, and so for me a major paradigm shift is the core business is what is the most exciting, and what we need to continue to reinvent every year and make sure we build our business on in the future. So that’s how I’m trying to get that balance that the core business is what we are most excited about, what we talk about the most, and then we have to use adjacencies every 3-5 years that we wanna pursue and that we wanna lead over to a new horizon to become a mainstay in the core business as well.
Adam Burns:
How do you cope with just on a pure leadership front I suppose, Lego has lots of models that when you respond to things, there was Batman recently and Indiana Jones and I was talking earlier and there’s Atlantis and all these really exciting things coming out. Lots of those clearly work, but some of those have limited shelf life or don’t work or whatever. How do you deal with the human side of closing down these businesses and yet keeping people excited and moving on?
Jørgen Vig Knudstorp:
Yes. It is a challenge. If you work on a project, people wanna make it a success, but we have a stage gate innovation process and that means that we would start out with 60 ideas, which eventually become between 15 and 20 that we actually launch, so it’s the name of the game that not everything that’s developed will get launched. Not everything that’s on the market today will stay on the market, so as an organization that’s part of the learning that it is creative destruction if you like, that you have to kill something to make room for something new. For me it’s a major part again of the discipline of running a successful and profitable enterprise is that you’re willing to sort of kill your darlings so to speak and exit products relatively fast. Even before they become a failure you exit them so you always stay fresh and renew your assortment and also keep your assortment very focused. I don’t think you need thousands of skews. You can keep it to literally a few hundred even on a global scale.
Adam Burns:
Thank you very much indeed. Right. So you’ve done a tremendous job at Lego in parentheses it says here, not that you need me to tell you that and clearly you don’t. When you first came on I mean I think perhaps there are two stages to your career here at Lego. The first one was turning the company around, and now it’s managing the really exceptional levels of growth that you have achieved. How did you set about initially adapting the enterprise?
Jørgen Vig Knudstorp:
I think we found there were basically two fundamental challenges that grew out of this period of overstretching and overexpansion was that one focus had been lost on basic execution, simple things. We didn’t know really what we produced on a weekly basis. There was a lack of transparency. We didn’t know where we made money and where we lost money, that sort of thing, and then the other thing is I think it was obvious that the strategy was wrong, but actually I didn’t know we didn’t know what the right strategy would be because it looked like it was the right strategy on paper. So we actually for the first two years of this new transformation of the company said, “Look, we don’t have a strategy. We just have an action plan”, which is a plan of detailed actions we attempt to carry through, and by doing that you start building confidence again.
You start building execution and focus because you get the organization focused on let’s do this. It’s kind of like getting a heart attack. After maybe having tried for 30 years to change your lifestyle, suddenly you realize, if I don’t change my lifestyle I’m gonna die. Then people get very motivated and they get on this action plan of exercise and healthy nutrition, in our case back to basics, serving the retailers really well, making the products children really cared about, getting back to the core of what Lego had always been about, sort of a process of rediscovery. Only then did we develop a new strategy for Lego, which then is the second phase of adaptation, and I think the major distinction we made, and maybe we could do it because we’re a family owned business, is that many companies in this situation in my experience will say, “Let’s grow. Once we get growing, we get profitability.”
We said for the next three years there’s gonna be no growth. In actual fact we did grow a little bit, but we said there’s gonna be no growth, but productivity will be many fold increased. So it’s kind of like if you look at the national economy and the government goes out and say, “There’s not gonna be any growth in the economy. There’s not gonna be any growth in consumption by consumers in this country, but what we’re gonna do is we’re gonna make this country far more competitive than it is today.” That’s what we did with the legal group, so we really increased our competitiveness.
We increased our productivity many fold and also our profitability, and only then did we start the growth engine in 2008 and now we’ve had a very successful 2008, 2009, leading into also a very strong so far development in 2010. So that has been this process of taking the adaptation step-by-step, but the important thing is that’s a seven-year journey and I think many companies, many CEO’s don’t have that luxury of saying it’s gonna take seven years to get to where we are today, but we could do that because we had a clear plan from day one to do so and because we have a family owner.
Adam Burns:
That clear plan was yours.
Jørgen Vig Knudstorp:
Yeah, but here’s a point that I really like to explain is that that plan is a super generic plan. It says we’ll spend a couple of years to stabilize the business and restore execution. We’re gonna spend three years restoring profitability and then eventually we’re gonna get back to organic growth. You’ll find such a plan in any management consultant’s handbook. It’s even on the first pages of that handbook. Some people have looked at the plan and said, “Oh, that must be the survivor plan.” I said no, look, it’s super generic.
Leadership is not about these conceptual ideas. The difference between the good and the bad leadership that you actually do it, and it’s like your New Years resolutions, right? Everybody has a New Years resolution: I need to eat more healthy, I need to get some exercise, but that’s not the inside, and too many leaders think, “Oh, I must lose weight.” It’s the inside. That’s not the inside. The inside is actually making it happen through 8,000 people.
Adam Burns:
Absolutely. Let’s look at that inside. Let’s look at what you do and in a very human aspect, how did you coalesce particularly perhaps your executive team at the time, around your vision?
Jørgen Vig Knudstorp:
Yes. Well it does start with a lot of dialogue, and it does start with trying to get the buy-in, trying to build a coalition so to speak that’s strong enough and powerful enough that you start getting the momentum to do these things. You look for the small wins. But I think the major thing I learned, and this was a challenge for me because I’m a very sort of cerebral kind of thinker. I think a lot, and it’s actually not about – you believe you need to think your way into a new way of acting, but actually what you do is you act your way into a new way of thinking, and so it was about less talk and more action, so what do you do? Well we closed offices, we sold off businesses, we shut down activities.
So for instance in the factories where we weren’t really in control, rather than introducing an IT system and elaborate reporting, we put the reporting up on a white board, and we created something we still use to this day. We call it a visual factory. So every Friday morning at 7:00 a.m. we’d get together and managers would write down how the factory was performing in front of all of us. Green numbers for good outcomes, red numbers for bad outcomes, and people look at that and say, “When are you gonna put it in an IT system?” and I say, “It’s never gonna go into the IT system because it’s all into doing the sharing of data and how we are doing.”
It’s a social mechanism that starts driving change, because once you’ve written that red number up there you don’t need to be told I need to change that. You start changing it. So it’s about that. We introduced which customers were profitable. We made it very transparent. We’ve worked a lot on our communication. I write a weekly letter to all our 500 middle managers about how is the business doing. Sometimes I reflect on what’s working, what’s not working. Creating a really flat organization with a fluent dialogue where people feel that they can say exactly what they think, because one of the things I learned was that while Lego was off track and management probably didn’t really understand how far it was off track, most employees and customers were very clear about this, but there were no lines of communication.
Another sort of my favorite motto is that the CEO needs any avenue to the truth that he or she can find, and some of those avenues are candid dialogues with employees, which mean nine out of ten times they may tell you something you know or something you consider vaguely relevant, but if you dismiss those nine times you never get the tenth time where they tell you something that’s really, really crucial and you were never aware of. If they didn’t tell you maybe you’d only learn two, three years later, and then of course it’s too late.
Adam Burns:
Absolutely. We’ll talk about these avenues to the truth a little bit more in a moment, but I wanted to touch back, you said that you were more cerebral.
Jørgen Vig Knudstorp:
Yes.
Adam Burns:
More a head than a hand I suppose.
Jørgen Vig Knudstorp:
Yeah. Yeah.
Adam Burns:
How did you change that? You say it has to be internal. What did you do to change yourself?
Jørgen Vig Knudstorp:
Well for me thank god I had some great colleagues around me who had more experience and who saw this and sort of said, “Look, don’t kid yourself by telling you want change. You need to introduce the systems, the incentives, the processes. You need to work your way into it. You don’t talk your way into it, so get out there.” So what I did was I spent very little time in my office. I joined these visual factories even though people would say, “Well we’re discussing capacity in factory number five right now” and the CEO said, “That’s a bit awkward.” He’s never been here before. It’s not like I walked in and said, “I believe you should turn that machine off and turn that one on” because I had no clue, and that would be delegating to the highest level of incompetence to have me do that, but it was more sending a signal.
This is so important that we do this process well that I’m actually here to observe we do this process well. By being in the room I send a signal that this is important for all top managers, so everybody would come in. So it’s literally a lot of dialogue, walking around, acting, being part of the acting into new ways of doing it and then reflecting on it through my personal communication whether it was in one-to-ones or in this weekly letter on my blog, which all employees can read. It’s about being there. It’s about acting also for the CEO in this case.
Adam Burns:
And what about now? Do you have any stretch goals now?
Jørgen Vig Knudstorp:
Yes. I think now of course it’s a different mindset because when I was in the phase of saying we don’t wanna grow, we just wanna fix profitability and productivity for the business, to many that seemed counterintuitive. “Why is the CEO not talking about growth?” That’s what CEO’s normally talk about, developing customers and so on. Now that’s of course all changed. Actually one of the challenges I have today is that we as an organization have nearly become too cautious. We nearly died. We found that it was good not to focus on growth too much for a while, so people are quite cautious. Oftentimes my role now is to say, “Look, we do have all this opportunity. We are a brand that is applicable in any country in the world.
We have a really unique proposition. I’m sure we can do better than we expect and really drive the business from that perspective”, but at the same time to manage the risk, and I do that from two angles very simplistically. We have very sophisticated risk reporting, but my take on risk is one, you don’t do stuff you don’t understand or you don’t know. Risk comes from doing things you don’t understand or don’t know about, and the other aspect is looking at the economic resort of the business, so how well do we reward the invested capital?
As long as we produce fantastic rates of return you see now, return on invested capital in the annual report, then I know we’re not taking on too much risk because we pay back on the investments we make so far. So that is guiding me, and right now those messages are telling me we can do a strong growth rates as we’re realizing right now, which is plus 20 percent growth on an annual compound basis, and without being excessively risk-taking, so that’s an important dialogue for me with the organization right now. Again role modeling, acting it out, showing that we are happy with it.
Adam Burns:
So good times really.
Jørgen Vig Knudstorp:
Yes. Absolutely.
Adam Burns:
We talk about sort of clearly you’re incredibly capable at thinking innovatively and then bringing that innovation into business processes and then acting that through and getting it done. Why do you think that perhaps that’s not a more common thing? You talked about people having to do – people wanting to lose weight but being external and it’s essentially on the inside.
Jørgen Vig Knudstorp:
Yeah.
Adam Burns:
Why do you think more people don’t do?
Jørgen Vig Knudstorp:
Yeah. It’s – I think there are maybe two things that has inspired me. One is Lego as a company of course is a believer in hands on, minds on experiences. I mean Lego, the philosophy of learning behind Lego is playful learning, that you learn best when you’re not aware that you’re learning and developing but you learn by doing, so there’s something in the spirit of the Lego values and bricks and so on that I think is directly applicable if you like.
The other thing that has inspired me is my wife is a GP, medical doctor, and she’s often looked at me and she’s said, “Explain this to me. So you had worked for the company three, four years, and you became the CEO. I’m a medical doctor. I get to go to school for nearly 10 years, spend 7-8 years working, training and working, to just become a bloody GP.” Becoming a medical doctor like an airline pilot you have to fly thousands of hours to maintain your license and certificate, but people become managers overnight. Where’s their practice? They are not practitioners. Where is the practice of leadership? Apart from the joking and that she loves to give me a hard time, that’s something I really reflected a lot on is that I think as a CEO you are the minister of culture, but you are first and foremost a minister of leadership practice.
You have to be the thought leader on the practice of leadership in the company, both about let’s say the generic do we follow through, do we execute products, do we know what the benefits of IT investments are, the sort that everybody knows, but also what is leadership practice in your company? I would expect any leader, in fact I know any leader in Wal-Mart, which is one of our major customers obviously, are extremely cost and price conscious, and it’s natural to me because that’s what their business is all about, saving people billions of dollars by the way they do their business. So if I offer a cup of coffee to a Wal-Mart executive when he’s visiting my office he leaves $1.00 on the table because he’s not gonna pay for the fact that Lego dishes out coffee for free, and I love it because it’s a complete alignment between what their business is about and how they lead it.
I wanna make sure that whatever leader you meet from Lego is an expression of what is important at Lego, and some of the things we’ve spoken about today I think is very Lego true, so that’s I think how the CEO should go about thinking about the practice here. People are not going to do it if their bosses are not focused on it. It’s just not working because we take our clue and instincts from how we see it being role modeled, and that way it’s no different from raising children.
Adam Burns:
Fantastic answer. Thank you very much indeed. Right, so where were we? Oh, actually we’ve kind of discussed it, but yeah. So according to one article I came across in my research you said that a company needs a unique reason to exist to get the strategy right. What we have covered off is what is Lego’s unique reason, but I’d like to ask you perhaps how has that unique reason directly impacted some real life business decisions that you’ve made?
Jørgen Vig Knudstorp:
Oh yes. Well I think first off for me it was given to me by a good friend of our own who said, “I’ll talk to your new CEO”, and he asked me two very simple questions for two years. He said, “Just explain to me what went wrong with Lego, and secondly, why do you actually exist?” In the beginning I was like, oh, what is this silly conversation about? But I realized of course it’s about the two most fundamental aspects of leadership. Do you take responsibility, or do you blame it on some external factor like currency or financial crisis or poor weather? Because if that’s your major reason for how your business develops, what the hell are you doing in the job, right?
I mean if you’re not at least 50-60 percent responsible for whatever outcome, I mean I think we all recognize the role of luck and bad weather and so on, but if you don’t take the major responsibility for adapting the business to any changing circumstances that faces it, somebody else should be in the job, right? So great question. The other one, “Why do you exist?” If you produce pizza here in the local town where Lego was born, you are not having a business model that’s globally applicable because when you move over to the next town somebody else already built a pizzeria and you have no reason to exist there. You are not unique anymore.
When we talk about rediscovering Lego and coming back home and establishing the core business of Lego, that’s what it was about is what really makes Lego unique, and what makes Lego really unique is that there is no building system like the Lego building system in the world. It makes children able to put two pieces together and there are thousands of different available pieces, but they all fit together, and it is as if they’re glued and you can play and build with them, and yet you only have to be one and a half years old to take them apart again. We had forgotten that. It’s so obvious. It’s so in your face, but nobody in the company was talking about that. They were talking about how we do things that were not that because then we could get new growth. So that question, getting back to the simple thing that makes you really unique, and then everything else evolves from that question.
So if that’s what we’re doing then we need of course to really be world masters of molding techniques because it’s all in the quality of the molding whether you get the power of two plastic pieces to fit but not fit harder than you can actually take them apart again. That takes millimeters of precision, and since we do 30,000 pieces every minute, 24 hours a day, 365 days a year, 25 billion pieces a year, it’s quite important that that quality is not occasionally right but consistently right in every print. It’s also important since you do about 10,000 different pieces of those 25 billion prints that you know exactly where they are, that they’re ready for Wal-Mart on Tuesday at 5:00 at their dock.
What does that mean in terms of when they should be warehoused in Mexico or U.S., being molded in Denmark, Hungary, Czech Republic, China, or the U.S., and also it’s quite important not that they are available, but somebody has figured out how they’re optimally produced without having too much inventory, the right procurement cost, and all that stuff. Then you start getting to, oh my god, managing that business system and that business model is where the competitive advantage of this business really lies. Then you say, okay, I need the enterprise architects, I need the engineers, and then you start getting this sense of what is in the core, where are my strategic capabilities, and you realize of course well the continuing operation – and it’s a trivial example – the continuing operation is not a core activity so somebody else might do that, and so you outsource that if that makes sense and so on.
So you actually drive the design of your business model and business system around this notion of why do we exist. I wish I’d come up with it myself. Somebody else gave it to me, thank god, but I thought it was a really crucial question, and one that is worthwhile to really penetrate over several years and keep asking yourself, why are we doing this? Do we do this better than anybody else? What does it mean for how we set up shop here?
Adam Burns:
Absolutely. You talked to me about avenues to the truth, and I think we can see now quite clearly why those are important. How do you, or do you in fact, actively seek out dissenting voices?
Jørgen Vig Knudstorp:
Oh absolutely, and I think there’s this notion that when you are the CEO you have people who actually run the business. You don’t really run the business. You’ve got to make sure you have a strong organization that’s capable of making the decisions it needs to make, so in a way you’re not the chief organizing officer. In a way you are the chief disorganizing officer. You are responsible for reinvention. You’re responsible for questioning organizational design. You are responsible for questioning whether processes need to be reinvented, and when you’ve gone through a turnaround you learn that of course there can be benefits from dramatic radical transformation and change, but you also learn there’s a lot of casualties, there’s a lot of uncertainty in such a process, so what you wanna get into is a cadence.
So for instance, on a monthly basis I sit down with our most senior operation guys across product development, sales, and supply chain, to spend a full day every month discussing how we continually improve our operating model. Sometimes that leads to fairly radical changes in service model or logistics setup. Sometimes it leads to smaller things, but it’s the process of constantly saying how can we do better, rather than the old saying that if it ain’t broke, don’t fix it. I don’t subscribe to that in this kind of environment.
I subscribe to it’s not like it’s broken, but I’m not accepting that it’s so super that I don’t need to change it because the world is changing all the time, so either you change faster than the world around you or you change slower, and if your speed is slower than that in the world around you, you’re gonna lose out someday. So I think this is an important act of really constantly disorganizing a little bit but of course also making sure you keep the integrity of day-to-day operation and you don’t mess things up with too much change.
Adam Burns:
So you’re talking there about being the chief disorganizing officer. I was talking to somebody the other day who had been reading about the – I think his name is Railsford. I’m not sure. He’s the guy that ran the Great British Olympic cycling team.
Jørgen Vig Knudstorp:
Yeah.
Adam Burns:
And he talks about there being eight kind of key driving factors in an athlete’s performance, and what he does is incrementally he will improve each one. So maybe he improves them all by .1 percent, .2 percent, but the mass of that leads to a huge kind of change. Is that sort of similar to your theory?
Jørgen Vig Knudstorp:
Absolutely. I’m pleased to hear that. I completely subscribe to it. I’m a big believer when you work with high performing individuals as I do because I work with the top leaders of this company of course, is that many times what’s blocking them are very small things, but you cannot go into a person and say, “Look, I’d like you to change six things now”, because they are so engraved. It’s almost like it’s in their genes. It’s definitely in some learned behavior over maybe a career of 20 years, so what you do instead is you say, “Look Christian, over the next three months I want you to focus on just one thing. Could you please”, for instance could be, “I’d like you to leave more room for your team in decisions around IT systems because I feel like you know so much about it. So you’re always very agitated and clear what you wanna do with this, and so I feel like we’re not developing that part of the organization. I need you to step back a bit even though it’s against your personality.”
That can be done, because then there’s just one thing to focus on, and when that person then behaves differently it’s easy for me to say, “You know what we spoke about”, and he’ll laugh and say, “Oh yeah, I forgot”, but you can’t give him five things because he’s too busy and he’s got too many things to execute. Then after three months that change becomes part of his habits, and once it’s become a habit it becomes an attitude, and then it’s in the gene pool so to speak. So I completely subscribe to it, but what I also like about the example is that optimizing performance is not about one big lever. It’s about seven, eight different things that you need to push and you’re always sort of trying to up your game. I think what’s behind that is also I bet in such a cycling team there are some who are better at being at the front and some will be at the back.
Some are great on mountains. Some are better at downhill. So it’s also when you deal with such high performing individuals you’ve got to find out so to speak in football terms whether they are mid-field, attack, or defense, and if you don’t know you haven’t pushed them hard enough, because nobody is great at attack and defense at the same time. If you say they’re equally good at it, it’s because you’re not pushing them to the envelope, and that’s where you really find out who’s on your team, do I have to write complimentaries in the team or do I have a team of all attackers for instance? Well then obviously you’re not well dressed for the game. So I really like that.
Adam Burns:
Thank you very much indeed. Right, so we’ve sort of done that. Oh, okay, so we talk about teams. This one fits quite nicely. It’s a bit of a quote. You can ignore who this is from. It’s not terribly important. I just like the quote. So near the start of his tenure at Ford Motor Company, Jim Farley who’s the group vice-president of sales and marketing, asked his advertising agency to act like a general manager in baseball. He said, “I’m looking to them to find me the best players for every game.” What’s your sort of most key advice for building high performing teams?
Jørgen Vig Knudstorp:
Actually we spoke before of course about selecting a team and developing them individually, but the biggest breakthrough in teams over the last couple of years for me has come from an angle that I have to admit really surprised me, and again I was very fortunate to get some good advice from some other people. That is that in all leadership there are two major equations. One is about creating resource, the other is about relationships, and I had come to be known both in Lego and in my prior career with McKenzie and Company as a strategy management consultant to be known as a relationships kind of person. I built strong client relationship, I built strong partner and customer relationships at Lego, well I’m pretty good at that, and what I realized with my team was that I only served the relationship part as kind of like a backbone reaction.
It was something I did, but I was not conscious of the relationship aspect whereas I was super elaborate and conscious about results creation, so how much money are we making on that, are you following through on that one, very tangible, conscious process for me. How do we create results, what are they, analytical about it, but the relationship aspect was just – that’s like a sideshow, you know? It wasn’t something I was conscious about. I wasn’t worried about what’s the dynamic between me and a certain individual or between two individuals in my team or let’s say in my broader group of top 40-50 people, and I frankly thought that that’s not really very significant. Then we went through a process and just realized how incredibly significant it is because it has to do with trust, and if there’s not enough trust you pay huge taxes for the lack of trust between individuals, but it’s also simple things.
I had one particular person on my team where he felt like I was always Mr. change, and he would be Mr. steady now, and of course implicitly my feeling was like, you never wanna play. You never wanna do something fun and exciting, and we spoke this through how this relationship was, and now today oftentimes I’m Mr. “Hey, hang on a moment”, because we’ve gotten out of how we were locked in that particular relationship and it’s released so much energy. What it does is it makes for a much more explicit dialogue where people are extremely direct and confrontational but without burning bridges behind them. It’s not personal, it’s very factual, because you know that there is a steady ground under the relationship because you really understand each other very well. It’s been a huge eye opener for me. So for me as a team builder that’s where I today would bring something to the table and say, look, there’s phenomenal potential here.
Adam Burns:
Fantastic. Thank you very much indeed. Now just a couple of quick questions around leadership and you and perhaps slightly more personal things. How do you define good leadership? Is it something you think that is intuitive or can it be taught?
Jørgen Vig Knudstorp:
Oh absolutely it is. It’s a profession. It’s taught. I think there are two major aspects. One is the setting a clear direction, setting up a sequence of things to be done, setting priorities, defining initiatives, setting targets and so on, and then there’s the more emotional aspect of leadership, which is building a vision that’s really compelling, getting people on board even with their hearts, so changing behavior, acting into new ways of thinking. So there are those two mainstay strands. That’s what some people call management and leadership, but I think that’s a bit artificial. It’s both at the same time.
Adam Burns:
Thank you very much indeed. A quick burst of sort of leadership 101. So we live in an always on, always connected world, smart phones, 24-7 email, 24-7 decision making, etc., consensus building, which means that you are I’m guessing pretty much under attack 24 hours a day 7 days a week, but if you’re constantly just reacting to what you’re being asked then your management is just a reaction.
Jørgen Vig Knudstorp:
Yes.
Adam Burns:
You’re not driving stuff forward. You talked a lot about building a vision and that whole proactive side of things. How do you make time for yourself to plan?
Jørgen Vig Knudstorp:
Yeah. It’s very important that you do I think, otherwise you’ll definitely lose your value add to the business if you’re only reacting. What you do, which is harder to do than just say it, is that you have to build your defenses. I have periods where I don’t get disturbed by phone calls, where I don’t get disturbed by emails, and that means sometimes there is a long log of things that are fairly important, some of them maybe even urgent, that I’m not touching because I wanna make sure I have room for the not urgent but extremely important stuff. What I can advise people to do is to really define how do you and your leadership role uniquely create value, and you’ll probably find there’s a lot in there that’s not urgent, and if you don’t do that you’ll not have the job 2-3 years later I’m sure, because when the board look at you they’ll say, “Well ultimately he or she didn’t really add value. They only just were fending off the balls that were coming their way.”
Adam Burns:
So you actually turn off your Blackberry at some point?
Jørgen Vig Knudstorp:
Oh absolutely. Leave it in the car. It’s a great solution, but you may also just have a day where you tell your staff, you say, “Look, I am not reachable. I am gonna spend some time reflecting today”, but you need to carve out that time and it is hard because you will say no to things where you’re thinking, “Shoot, I actually really ought to do this”, but you don’t.
Adam Burns:
What about the other issue, which I think is increasingly important for executives, because it is a time-starver. I mean even if you are leaving the Blackberry in the car, all those sorts of things, and telling people that you’re un-contactable, how do you then balance - $64,000.00 question I suppose – your work/life balancing? How does that work for you?
Jørgen Vig Knudstorp:
Well I think actually my take on that one is there isn’t. You will not get a good work/life balance while you are in this job. If you’re Wayne Rooney I suggest you’re not saying on Sundays, “Look, I can’t play on Sunday. I’m a family man.” I mean there are certain things that come with the job. I’m the CEO of a company that’s international. It does 2 percent of its business in its home country. If I had expected every day to be home for dinner and never travel, I’m just in the wrong chair. So there’s something about either you’re passionate about what you’re doing and you’re living your dream and then you pay the consequences.
What I’ve done for myself is that I feel like I have two major passions n my life. It’s the Lego family and it’s my own family. I’m a father of four young children, and so that’s where I spend my time. I don’t play golf. I don’t make many holidays. I’m just not doing all the stuff that a lot of executives are doing. I’m not pursuing all my hobbies. I really don’t pursue hobbies. It’s Lego and it’s my family, and I don’t regret that for a second because I do what I love, but I couldn’t possibly say that I have a good work/life balance, but I don’t need that because I’m pursuing my passion, and that’s what I’d encourage people to do because I think they’re stuck in this, “Oh, I want to be a great golfer, I want to play tennis, I want to be a great lover and husband or wife and grandfather or father and member of my children’s school and also play a role in society”, yadda, yadda, yadda.
Forget about it. It’s impossible. People live an impossible dream when they talk about that, or you take a job where you can have that work/life balance and you just decide yourself that your dream with that job is to fulfill a pretty narrow responsibility, which I think is totally respectable, but don’t become a CEO and expect your life to be like that.
Adam Burns:
Of course. Thank you very much indeed. So just a couple of kind of very quick things about you; we here about these childhood CEO’s. “I set up a lemonade store and by the time I was 12 I was earning millions of pounds every day.”
Jørgen Vig Knudstorp:
Yeah.
Adam Burns:
And I’m not going to ask you if you were a kind of childhood chairman of the class or whatever, but are there things you think you could trace back to yourself back then and follow that line directly through to what you do today?
Jørgen Vig Knudstorp:
Yes. Yeah. So I think leadership is definitely a practice and a profession that you need to be taught, and I think there’s a lot you can learn even if you were the chairman of the class, which I was, but I do think there is a certain propensity that you find people who take initiative, who take leadership naturally, who take on responsibility, who take blame when things go wrong, and I look for those people because I do believe that they have more potential than those who don’t. That’s not to say those who don’t have the potential today can maybe be taught to develop that potential, but there is such a thing as a natural leader, but sometimes a natural leader can be a terrible leader in certain aspects because there are certain things we need to teach them, but there is such a thing.
I look for them, and I have to say that I’ve come to believe I was one of them, because otherwise I would not have become the CEO of a global enterprise at the age of 34. It wouldn’t have happened, so there’s something in there. In some it will come earlier, in some it will come later, but if you’ve never taken the lead, if you’ve never taken initiative, if you’ve never taken responsibility, you’ll struggle.
Adam Burns:
I see. How about if you could go back and revisit yourself, let’s say a crucial moment; let’s say coming out of university and perhaps going into your first job, things have obviously worked out pretty well for you. Is there anything you’d tell yourself during that crucial moment?
Jørgen Vig Knudstorp:
Yeah. I think risk willingness. Don’t try to do what seems like the appropriate path in your life. Go for the things that you – I opened a bookstore. It nearly killed me at least financially, but we had a lot of fun. It delayed my studies. It wasn’t on the clear path. I knew I wanted to do something with leadership and management, but yet I was offered to do a PhD. McKenzie who had already hired me said, “Look, feel free to do it. It’s not gonna advance your career with McKenzie in anyway to do a PhD”, but I did my PhD and it was the greatest time of my life exploring some really topics in depth, and I still – so I think there’s something around you’ve got to make sure you’re still driven by intellectual curiosity and interest and passion more so than, “My dream is to become the CEO of so-and-so.” Check this box, check this box, check this box. You’ve got to have the inner urgency, the inner drive, and I’m afraid many people kill that by not listening to it, but again it’s not working against the need for a deliberate practice that you learn and develop and so on.
Adam Burns:
Thank you very much indeed.
Jørgen Vig Knudstorp:
Thank you.