Comparison of Leadership Styles
Jorgen Vig Knudstorp and Kjeld Kirk Kristiansen as the CEO of the Lego Company
The Lego Company’s leadership was headed by these leaders at a time when it was almost collapsing. Nevertheless, they applied varying administrative techniques that helped in restraining this company from collapsing. Additionally, conditions in the company were deplorable when these leaders took over its leadership. There are convergence points that are shared by these leaders on the basis of the methods that they used though they have some differences. There were serious problems that the management was facing at the time when these CES were the leaders. However, they cushioned the company from collapsing by applying different techniques. Strategic leadership’s investigation of the management style of these leaders shows that they share some similarity. However, they vary in some accounts. This reasoning forms the basis of the explanation of this article.
Strategic Leadership Style
In 2004, Jorgen Vig Knudstorp got a promotion to become the leader of Lego Company. This move was made at the time when the company was under intense pressure and almost collapsing. To Jorgen, it was necessary to restructure the organization. Consequently, he preferred the top-down management style. Basically, this leadership style entails the flow of directives from top organs of the organization to lower organs (Vestberg, 2013, p. 63). Thus, the lower organs in the hierarchy of the organization implement the directives that higher management organs set. This method was applied by Jorgen while the company was facing the need for halting sales, reducing debts as well as improving cash flow. In addition to these three considerations, this leadership style was fit for Lego Company because it had a relatively small size and therefore it did not require complex units in its management.
The company tested the top-down management style. The authority that Knudstorp headed investigated the validity of this method. On the basis of the implementation of this method during the first phase, the management opted to add a loosened top-down administration method because of the desire to empower managers. The intention of Jorgen in introducing this kind of reform was to have a system in which decision making process would go down so that the top management can research the decisions whose impact would be felt in the company in the future. This is among the unique styles used by Jorgen in leading the Lego Company when he was the CEO.
To ensure that the company did not suffer more financial impediments, he designed another policy. This led to focusing on different business aspects by the managers of different groups. This move was made at a time when the company desired to be an opportunity-driven business as well as to eliminate potential risks that it was facing. On the basis of these methods, Lego Company as led by Jorgen had a loosed top-down management style. This management approach was adopted because of the fiscal restraint period when Jorgen led the company. Later, Jorgen transcended the status of the company’s leadership to a level where it became risk adverse. The belief of Jorgen with this platform was that the firm would realize its desired results in regards to growth and opportunities regardless of the experienced financial impediments (Timms, 2010, p. 216).
This was not the end of Jorgen’s leadership dynamics because he proceeded beyond this. Due to his leadership style, some developments were made in the company. Eventually, the company declared core products offering. The unique design of these products would enhance systematic learning among children, creativity in problem solving as well as the cultivation of important skills of the 21st century. The firm also made a decision to compete by becoming the best firm instead of the biggest firm. Several advantages were achieved with changes in the phase of administration.
Kjeld Kirk Kristiansen is considered as Lego Company’s pioneer for serving in this company as the CEO for a long time. He is also seen as the major leader during the modern Lego Company’s phase because he put concerted efforts in the promotion of the affairs of this company when it was experiencing difficulties in operational performance. As the leader or the CEO, he adopted diversification method in toys production. Using this approach, Kjeld spearheaded electronic toys production when the company was producing traditional toys. The aim of this move was to influence public taste of toys that the company made.
Diversification was not in absolute favor of this company because it continued to grapple with the losses that were caused by this policy. To Kjeld, this was a major challenge and he came up with other methods so as to cushion Lego Company from more difficulties in operational conditions. As a visionary leader, Kjeld was an advocate of new ideas as long as they were viably applicable to the company. He welcomed ideas that would enhance the prosperity of Lego Company amidst the challenges that it was facing. Kjeld made structural analysis under Porter’s five factors analysis. This made Lego Company to realize more progress than it had before (Oliver, & Heckmann, 2007, p.47).
For example, this analysis was applied viably in the analysis of the opportunities of this company, its competitive advantages as well as its projects. Kjeld adopted an operational framework for the company’s functions that has led to the consistency of its operations regardless of the threats that it faces. The tactics of Kjeld of acting as a visionary leader instead of an operational leader caused his major failures. Later, he appointed Jorgen to succeed him. However, there were fruits of his visions when he was leading Lego Company as its CEO because he succeeded in creating impressive products as well as strategies.
Human Capital Investment
Human labor’s sanctity was upheld by Jorghen Vig Knudstop. The company invested in human capital as a way of promoting most activities. The company, using this framework under the CEO’s leadership considered an all inclusive administration framework of the staffs. Result-oriented performance of different tasks complemented heavy investment in human labor. This was viably applied after the assumption of office by Jorgen.
Additionally, top-down administration strategy that Jorgen used made it possible for the workforce to involve itself in all activities in the company. This made the firm more successful. Additionally, Jorgen articulated innovation and this required an ethical workplace. Collectively, this made the major pillars of the platforms of Jorgen under the investment of human resource. However, the aim of the loosened top-down method was to capitalize on workforce’s productivity regardless of their social position or ranks in the company. The belief of Jorgen was that through the use of this mechanism the best outcomes could be achieved from the workforce and this is the main goal of an organization (Irvine, 2013, p. 54).
On the basis of this pillar, an organization is required by considerable employment to put more emphasis on productivity and competence even while fighting constraints that result from idle labor. Additionally, Lego Company seems to have been favored by this move because it came from a low performing generation to a relatively higher position financially. Human investment also became a significant consideration during the leadership of Jorgen because it led to the establishment of result-oriented platforms instead of sluggish performance. The results of over concentrating on innovation and ethics can be adverse for some areas where the staff does not respond to changes in the market dynamics. The approach of the top-leadership in relation to the investment in human resource is also a dimensional deterrent to the development of the human resource more so, when the received interactive directives are impossible to apply viably. Consequently, time and company resources are wasted.
With the consideration of the visionary leadership method by Kjeld Kirk Kristiansen, investing in human resource is seen as partial priority. Under the administration of Kjeld, several transformational changes occurred and these prompted this firm to diversify its activities. The framework that was adopted by Kjeld was supported by change platform. This was his main reason for employing workers. The aim of investing heavily in human resource was to enhance new ideas’ inception and development. This concept was reflected by the diversification program of Kjeld (O’Connel, 2009, p. 123).
Via this leadership framework, Kjeld advocated for an innovative platform and competence. He believed that this was an inherent concept in his new workforce. As such, intellectual development and training was the most ideal platform that would lead to these changes by the workers. Human labor investment was done alongside employments and trainings while complying with the new technologies. There are disadvantages that relate to this platform including losing company resources in case the market does not accept the supported plan. This is a factor that relates to Lego Company’s failure under its new diversification model. These paragraphs provide a comparative analysis in relation to human capital during the two regimes under the leadership of the two CEOs who had divergent viewpoints.
The Concept of Deep Smart vs. Young Hires
The discussion of the work plan that was shared by the two CEO of Lego Company shows that young hires and deep smart concepts may be related to corresponding platforms of their operations as undertaken by both CEOs. This framework shows that young hires conceptual model was applied in the operation platforms of Jorgen in the Lego Company. This is a viewpoint that can be attributed to conceptual moves and dynamic procedure that Jorgen undertook in subverting the collapse of this company.
For example, during his leadership he recruited many employees with his target being the young generation that he believed had exclusive power and skills (Lego group, 2010, p. 87). The energy and power that the young people have enhances work efficiency which yields better performances. Applying this model seems viable when it comes to explaining swift changes in Lego Company’ financial prospects during Jorgen’s tenure.
Deep Smart is another thinking model as Dr. Ireland postulated it. This model depends on the skills that are developed via experience as well as long time of delivering a service. The framework requires one to work in a specific area over a relatively longer period in order to get skills. This theory is relevant in relation to Kjeld’s operation platform during his time as Lego Company’s CEO (Aziza, 2010, p.67). When he was the CEO, diversification model was exonerated and this was required for employees to acquire skillfulness. With deep smart model in mind, this leader was able to reap the inherent benefits of the company and to attain staffs’ competence on the basis of their experiences.
Each leader applied a leadership style whose effectiveness relies on the organization’s operational factors. For instance, loosed top-down leadership framework uses a principle that is based on viability and effectiveness in relation to the present conditions. This model was applied by Jorgen because it was effective in dealing with the financial restraints facing the company during his tenure. This CEO also made fostering progress and development a prerequisite through the subsequent models that he used. Kjeld on the other had applied the diversification principle which proved satisfactory for nurturing new opportunities and concepts that the company was yet to exploit.
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