LEGO and India Post- A Discussion on the Turnaround Strategy

We have under our purview two organizations- India Post (trying to overcome its deficit
through restructuring, reforming and re-engineering its processes through technology
adoption) and LEGO (a Danish toy production company way back in 2003 rebuilding itself after
a massive debt of $800 million).

LEGO under the leadership of Jorden Vig Knudstorp underwent a period of strategic
transformation but the process was not a mere supply chain driven initiative or infusion of
funds to grow inorganically, but a period of speculation and reflecting back to what the
company stands for.

Can the initiatives of the two organizations’ be compared and evaluated? Would it be the right
to even compare them considering the environment and essentially the roots are very
different- one being under the ministry of IT and communication, a typical bureaucratic setup,
the other being a company exercising its desired autonomy and operational style?

We however can come up with some insights on how the culture shapes the organization’s
future and hence benchmark LEGO’s best practices- something India Post can learn.

The only similarity we can find is discussed in the following table:

INDIA POST LEGO

Core product:
 India Post took up initiatives like
Mail Network Optimization to
reduce late deliveries and wrong
deliveries. Project Arrow was
launched to facilitate quick services
to customers. India Post 2012 was
rolled out to transform Postal
department into technology-enabled
service providers.
Core product:
 LEGO realized its core competency and
focused on what made it famous. This
meant going back to its essence which
was playing by building. This was the
major strategic concern of the
company.

If the key strategy was similar for the two players, where did India Post go wrong?
The answer is that LEGO focused only on core products. However India Post focused not just
on core products but also areas like financial services and retail services. We can hence draw
the major differences in their approach.
INDIA POST
Focus:
 The focus was dispersed across various
services. We can comment that they
were looking forward to deliberately
cover the deficit by leveraging financial
services which accounted major chunk
of their revenue.
 It becomes a big concern in this case
when the core competence runs in huge
deficit while the additional services
become a source of revenue generation.
Positioning
 We see that India Post kept on adding
new products without being clear about
its target group.
 One size fits all approach
Culture:
 The most distinguishing factor or the
make-break factor for India Post was
the organizational culture.
 This was the most important and the
most neglected cause of the poor
performance of India Post.
 The reasons are obvious: Being part of
the ministry of India, the autonomy was
negligible. The stickiness in the labor
market in India has always been a
concern but for India Post this was all
the more serious.
 The technological up gradation in the
organization was not coupled with
reskilling of the workforce. Infact, the
skillsets were the major concern.
 Unionization was a serious threat to
bringing reforms in the management.
LEGO
Focus:
 The CEO was clear about his focus on core
competence- the one that had helped
them build their brand.
 He made it evident in his working style
that for him the focus was to stabilize the
business rather than grow organically. The
growth- organic- was left only for a later
stage when the core business got
stabilized.
Positioning:
 LEGO had a clear sense of its target group
and thus the products were designed
accordingly.
Culture:
 People-centric approach was taken.
 Candid dialogues with employees by the
CEO
 Socially driven practices such as using
white board to discuss data rather than IT
tools only to arouse collective
consciousness and accountability.
 CEO in plant not to show competence but
to make employees realize that their work
was very important and hence the CEO
himself had come to monitor it.
 Human Resource allocation was done
based on skill sets and capabilities. As the
CEO conveys- like a football team, the
players were strategically positioned.