The big idea: In 2008, the growing trend of digital entertainment and toy-based theatrical releases posed a challenge and a risky unknown for the iconic Danish toymaker Lego. As the company considered whether to pursue its first theatrical release in the form of a branded film with Warner Bros., it ultimately embraced an ambicultural perspective — combining the best of different cultures to expand the company's thinking about the structure and possibilities of enterprise in the new global reality — that allowed it to view the high-stakes challenge of representing its toys on the big screen as a unique opportunity.
The scenario: Although it's common for Hollywood producers to think the world begins and ends in Southern California, occasionally a project is so compelling that they'll travel great lengths in an attempt to see a film come to life. That's what happened in 2008, when Warner Bros. producer Dan Lin and the screenwriting duo Dan and Kevin Hageman went to Billund, Denmark, to appeal to Lego's chief executive, Jorgen Vig Knudstorp, to co-create a film.
This was not the first appeal Lego had received from Hollywood. In fact, the company had for years turned down requests from directors and producers to make a Lego movie. This pitch, however, was slightly different. Lin drew inspiration from observing his young son playing with two Lego bricks that he envisioned to be a spaceship, and the conceit of the film was that the scenes would blend live action and animation and that anything in the movie could be constructed using real Legos.
Lin’s invitation came at a time when many saw the proliferation of digital entertainment as a threat to the traditional toy industry and the “active play” time that it depended upon. Lego was already a successful toymaker, having recovered from near bankruptcy several years earlier and enjoying revenue growth of nearly 20 percent over the past year. The strategy that had saved Lego was a keen focus on core construction products and encouraging children’s active play, making the idea of a big-screen venture potentially contradictory. Furthermore, another toy company’s recent venture onto the big screen did not offer a good example: Hasbro released “Transformers” in 2007, creating box-office success for Paramount and DreamWorks but not translating into improved toy sales for the company. In fact, Hasbro reported disappointing holiday season sales for 2007 and 2008. Warner Bros. was also asking for active engineering and marketing involvement from Lego, and there was risk of damaging the brand or its reputation — perhaps irreparably. Was the risk too large to handle?
The resolution: As Knudstorp looked ahead, he faced the initiation of the growth phase of his long-term strategic action plan for Lego, and that growth was expected to come from an increased investment in production capacity, sales and marketing. Allowing himself to see the Lego movie as a marketing opportunity within the action plan helped unlock Knudstorp's ambicultural view of the situation — a threatening unknown could actually contribute to a new era of growth. Knudstorp ultimately agreed to collaborate on a film, and "The Lego Movie" was released in February 2014. The story blended actors, characters and jokes that appealed to young audiences and parents alike. Not only was the film a box-office success, grossing more than $250 million in domestic sales in 2014 (Warner Bros.' biggest success of the year), but it also helped boost sales of Lego toys by 15 percent that year, pushing Lego past Mattel for the first time as the world's largest toymaker. By 2015, three more Lego movies were in the works, and two have already appeared.
The lesson: Although unfamiliar ventures, external changes vexing an industry, and recent threats of bankruptcy can startle many executives into playing it safe and shying away from challenges, an ambicultural perspective allows companies to view such challenges as opportunities.
CORRECTION: A previous version of this article misspelled Lego chief executive Jorgen Vig Knudstorp's name.
Ming-Jer Chen is the Leslie E. Grayson professor of business administration and Jenny Craddock is a senior case writer at the University of Virginia Darden School of Business.