Lego’s brick wall: a lesson in corporate reputation
5th October 2023
Last week, the world’s largest toy maker had to disappoint stakeholders, legions of fans and the climate community when it abandoned a major sustainability target. But Lego’s honesty in the face of a huge setback is a lesson in corporate reputation management.
So what was the story?
After years of testing and millions of dollars in investment, Lego announced that its plan to eliminate oil-based materials from Lego products by 2030 would have to be scrapped. It concluded that switching to recycled plastic would have led to higher carbon emissions over the product’s lifetime. In other words, it didn’t make sense to switch to a more ‘sustainable’ material.
This was a major setback for Lego, and the UK press was quick to pick up on the story. Headline after headline shouted about Lego’s stumbling block. A disaster for the brand’s corporate reputation and a comms nightmare. Right?
What we found interesting was the lack of any notable negativity around Lego’s announcement in the mainstream press. While headlines made it clear that this was bad news for the manufacturer, few if any publications positioned the story as a failure or sign of incompetence.
So why wasn’t Lego blasted for its u-turn?
Any business working towards a more socially and environmentally responsible model will know that it’s hard work. Targets are easy to set, but far harder to meet. When things don’t go to plan, it’s tempting to stay quiet and hope the world won’t notice.
Lego didn’t take that route.
Lego’s board agreed an ambitious target for bricks to be made with recycled plastic by 2030. They made their commitment public. The business spent years and vast sums of money trying to achieve it. They didn’t succeed. But – importantly – they were honest about it, and explained clearly what they were going to do next.
Lego understood that corporate transparency is the cornerstone of trust. When a brand or business openly shares information about its social and environmental progress, operations or financial health it reassures stakeholders, including customers, investors, employees and the public, that it has nothing to hide.
Lego’s decision to be transparent about its setback – along with a plan for how it would pivot to an alternative solution – will have reassured employees and investors, and protected consumer trust.
It’s worth noting that Lego has spent years investing in its brand and corporate reputation. According to The Global RepTrak® 100 it was the world’s most trusted brand in 2023. When a company consistently invests in its brand, reputation, and values over an extended period, it not only establishes trust and credibility with stakeholders but also creates a reservoir of goodwill. This can be a lifeline during major challenges and crises, serving as a buffer against negative perceptions and helping to maintain stakeholder support and customer loyalty.
So what has Lego taught us?
Transparency and openness can feel like a risky place for brands. But being transparent about progress builds stakeholder trust and credibility. It inspires other brands, businesses and citizens to learn and take action too. This is especially true when things don’t go to plan. No one has all the answers.
We believe more brands and businesses need to embrace a mindset of progress over perfection. Imagine a world where brands and businesses normalised their challenges, rather than trying to come across as perfect. With greater honesty would come collaboration, collective learning when setbacks happen, and faster progress as a result.
Want to understand how your brand can communicate progress over perfection? Check out our latest report: https://alfredlondon.com/movements/progress-over-perfection/