The Danish family behind the Lego plastic-brick empire is shaking up the company’s ownership structure, elevating an executive widely credited for rescuing the toy maker from the brink of bankruptcy to manage all-things Lego and explore new business ventures.
The Kirk Kristiansen family said Lego A/S Chief Executive Jørgen Vig Knudstorp, who has transformed the venerable Danish company into a global toys-and-entertainment force, will step aside at year-end.
In his new role, Mr. Knudstorp will lead an umbrella entity called the Lego Brand Group that will oversee the family’s 75% stake in the toy maker, as well as interests in the Legoland theme parks and in an education business promoting the use of Lego toys in schools. Chief Operations Officer Bali Padda, a Briton, is appointed CEO of the toy company—its first non-Dane boss since Lego’s foundation in 1932.
Mr. Knudstorp, who has said he planned to stay with Lego for the rest of his professional career, will work at the Lego Brand Group alongside Thomas Kirk Kristiansen, a fourth-generation owner of Lego.
Ahead of his promotion to the Lego Brand Group, Mr. Knudstorp, a former McKinsey & Co. consultant, had earned the reputation of a turnaround king.
When he arrived at Lego in 2004, as a 35-year-old and the first nonfamily member at the helm, the company had been struggling financially for years. Its customers, children, were forsaking its iconic bricks for digital games.
Mr. Knudstorp sold off the Legoland theme parks and reduced the catalog of Lego bricks available to the company’s designers. He also licensed the Lego name to film studios, creating a new revenue stream.
Thomas Kirk Kristiansen, who is set to lead the Lego Brand Group with Mr. Knudstorp, in April, succeeded his father, Kjeld Kirk Kristiansen, as vice chairman of Lego A/S and chairman of the family charity Lego foundation.
In 2004, the senior Mr. Kirk Kristiansen was the one handing the company baton to outsider Mr. Knudstorp. He later acquired other family members’ interests in the company, concentrating the Lego ownership in his hands and those of his three children.
Source: Jervell, Ellen Emmerentze, Wall Street Journal, Dec. 6, 2016
Note from the team: Lego is an example of how trusting an outsider, based on merit, with the family business can be beneficial for the business.