Business Wars Rebuilding LEGO | A Burning Platform | 1
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Jun 25, 2025 In 1997, LEGO faced a dramatic profit collapse, forcing a reevaluation of its approach. Debate brewed over a potential Star Wars licensing deal, bringing tension between innovation and tradition. Complacency had nearly led to bankruptcy, prompting urgent calls for change. The challenges of engaging today’s kids were starkly evident, especially after the disappointing launch of the 'Galador' toy line. A consultant's candid assessment highlighted the dire need for immediate transformation if LEGO was to survive in a shifting market.
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Lego's Star Wars Licensing Resistance
- In 1997, Peter EO pitched licensing Star Wars for Lego, facing strong internal opposition.
- The executives resisted, fearing it contradicted Lego's tradition of encouraging kids' own creativity.
Lego's Near-Bankruptcy and Turnaround
- Only 1 in 10 companies in freefall successfully turn around.
- Lego faced such a crisis in the 1990s but became the world's largest toy maker in 10 years.
Breaking Lego Tradition with Star Wars
- After enduring resistance, CEO Kjeld Kirk Christiansen approved Lego's first licensing deal with Lucasfilm.
- This break from tradition birthed the hugely successful Lego Star Wars line.
