The Lego Approach: Designing Value Block by Block

Today I came across a blogpost from Dave Gray, Founder and CEO of XPLANE about "a brief history of LEGO" (disclosure: I admire Dave for his work in the domain of visual thinking ;-). LEGO always reminds me of two things: Firstly, I have to think about the great time I am having these days and weeks with my son who is currently discovering LEGO (yeah, it allows me to play without finding excuses :-) Secondly, I have to think about how similar business model design is to playing with LEGO.

For me, LEGO and business design are both about:

  • Creative minds;
  • Analytical and conceptual capacity to imagine the ouctome;
  • Putting building blocks together piece by piece to form a coherent whole;
  • Understanding that it's the whole that counts, not the pieces.

A nice example of creating value block by block is Apple's business model design in the music industry. It is the whole that makes their business model powerful not the pieces - it is the iPod (hardware), iTunes (software & shop), the available music (content) and partners (content suppliers) combined that create a coherent whole and competitive advantage. Each business model building block alone is almost like the various shapes and colors of LEGO pieces:

  • the iPod competes with various similar music players (i.e. LEGO pieces of same shape and color) - of which some have better performance and price/quality ratios;
  • the iTunes online shop is only one of several music sites where a customer can download the latest tunes (i.e. LEGO pieces of same shape and color);
  • the iTunes software competes with numerous other music software (i.e. LEGO pieces of same shape and color);
  • Apple is not the only company that has struck a deal with music majors (i.e. LEGO pieces of same shape and color).

Apple's genius was to design a competitive business model from several pieces, that, each one taken alone, are similar to the others in their respective market. It's just like building a beautiful castle from a bunch of quite similar LEGO blocks...

PS: For more about LEGO and creativity have a look at Serious Play (wiki) developed at the IMD management School in Lausanne, Switzerland by Johan Roos and Bart Victor. Yep, we have a hotbed for creativity and business design here in the region ;-)

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