TON at LEGO: Peer learning in outsourcing and offshoring September 8, 2016

September 15, 2016

Permit me to say that “Everythindsc_0516g was AWESOME!!” at the TON event held on Thursday, September 8, 2016 at LEGO (ok, I admit they won’t be needing me for any screen-writing for The LEGO Movie II).

 

We shared an active and engaging day which gave us a chance to understand LEGO’s learnings and journey through outsourcing and offshoring. With contributions from Xellia, IO Interactive and Arla in our panel discussion, we took a broader scope while our LEGO Serious Play session encouraged us individually to use LEGO bricks to express our insights to truly successful outsourcing and offshoring. A heartfelt thanks to LEGO and all of our program contributors.

 

 

 

 

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The day kicked off with a welcome from Frank Gaardsvig, Director CIT LEGO, who highlighted the history of LEGO and its current super-charged growth spurring transformation. It was inspiring to hear that what drives LEGO and its employees is the same thing that drives its owners and leadership: Affecting children’s lives positively through play. Yet LEGO’s substantial global success is putting pressure on its organisational structure and the way in which it works. It’s not feasible to do everything in Billund. How does a company that needs (and wants) to work globally stay true to the LEGO culture? Frank noted L EGO’s efforts to support a globally connected LEGO culture, for example their recent Play Day where everyone in the organisation world-wide, took several hours on the same day to just play.

 

Bent Petersen, Professor, CBS, threw out a few thoughts for the day’s discussions, including recent research findings findings that show that Denmark’s manufacturing sector learns about outsourcing and offshoring through experimentation, growing stepwise rather than starting out with a comprehensive strategic vision. Emphasising the positive aspects, Be nt said that experiential learning delivers benefits of deeper insights and long-lasting learnings. Bent referred to research by Peter Ørberg Jensen of CBS (and TON) that shows that companies in our market are adopting a deliberate emerging strategy which focuses on imprdsc_0530ovising and deciding along the way rather than elaborately planning ahead.

 

Another insight that Bent provided was research showing where preparation is useful and where it is better to just dive in and start working. A critical criteria is that if the destination market is substantially different than the originating market, preparation and planning provides only a limited gain as compared to experimentation and piloting. Valuable food for thought for our own work in many markets.
Britta Ponti, Director CIT BE Vendor Management, LEGO, then took us on a deep-dive of LEGO’s journey through managed services–or at least through the ambition both stalled and re-activated, todsc_0479 transition to them. LEGO currently runs a hefty project portfolio–roughly 120 at any time. The process for managing this work is not tightly structured and reflects a current philosophy of having the individual project teams manage specifications, interactions and processes. Some of the learnings that Bridsc_0488tta and her team have encountered as they have worked through the As-Is set-up is that most folks don’t know the contract specificat ions, aren’t familiar with what LEGO is specifically “buying,” and can’t clarify either escalation procedures or governance. While strong technical skills abound, the challenge is moving the set-up to a more well-defined one that more easily scales in order to meet the growing LEGO demand. Britta identified a few key drivers for the future of LEGO’s IT outsourcing: Scalability, innovation, time-to-market, simplification, cost-effectiveness and global. Britta observed that the challenges in responding effectively to these drivers will demand that the organisation works in new ways.

 

We then got a chance to hear from Allan Lykke Christensen, Senior Manager–Markets CMA, LEGO. Allan has been deep “in the weeds” of LEGO’s Offshore Development Center (ODC) and was able to give us the perspective on implementation. Allan noted that while some of CMA’s experience echoed Corporate IT’s, the nature of CMA’s development work demanded modifications in the approach. One key decision early ondsc_0416 was to send a LEGO developer to the ODC for a year. This developer functioned as a standard bearer of LEGO values while also functioning as a team member, not the leader. Structuring the team this way allowed LEGO’s CMA to firmly cement and scale their way of working in the offshored development team. Allan also spoke about the experimental approach that LEGO CMA took to both the set-up and the future vision in that the end-state was not defined when they began building up the ODC. Critical to progressing successfully was the insight the vendor provided about LEGO’s approach in that there were better ways to get results than in using self-organising teams while managing the individual team-resources from Billund. Summarising, Allan noted a few key learnings: Focus on value streams; Empower the team by delegating; Let “Whys” and “Painpoints” drive the change; and Invest in leadership development.

 

Our afternoon began with a facilitated LEGO Serious Play session, lead by Carsten Brinch Larsen, Director CMA, LEGO. Using LEGO bricks, we first expressed “The Manager From Hell” and then “The Most Important Learning From Working With Outsourcing and Offshoring.” While it will surprise few that the first exercise produced evil-looking figures holding whips, the second exercise developed metaphorsdsc_0525 such as dsc_0523building bridges, connecting over distances, and setting a vision. Carsten encouraged us to share this kind of communicating through playing (with LEGOs) in our own teams at our work.

 

Our final session of the formal program was a panel discussion including, Lotte Astrup, Director Program Management Office, Xellia; Kalvin Lyle, Outsourcing Manager, Idsc_0533O Interactive; and Jesper Thøger Jacobsen, Head of Vendor Management, Arla Foods.  We focused on their learnings and the realities encountered while working with offshoring and/or outsourcing. One critical learning that was broached was that it takes time to mature the vendor to the particular client and vice versa. This also means that being flexible while contracting will allow for growth without being too restrictive. Managing the change internally turned out to be a much bigger task than originally anticipated; Yet knowing the ideal set-up at the beginning is not necessarily possibl
e. Experimentation and iteration go a long way towards helping companies to grow through the ambiguity.  Our session ended with a discussion of the necessary skills and competencies to successfully deliver via outsourcing/offshoring–skills which weren’t necessarily present when companies began the journey but needed to develop along the way, such as cross-cultural and leadership skills.

 

After the close of our formal program, we took a short walk to the LEGO Museum where we got a guided tour of LEGO’s history. As the Museum is not open to the public, we truly got an insider’s view of the transformation of the company from its origins as a carpentry shop to the global force in play that it is today.

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Our next TON program will be held on November 10 at GN in Ballerup. We will take a look at both intentional and unintentional transformation via outsourcing and offshoring.

 

If you are interested in hearing more about our work in TON, please take look here or contact Katie Gove at kg@trellis.dk.

 


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