The solution to LEGO’s problems—the thing that may have rescued it from potential bankruptcy—lay in an old pair of sneakers.
It was early 2003, and the company was in trouble, having lost 30 percent of its turnover over the past year. In 2004, another 10 percent vanished. As Jørgen Vig Knudstorp, LEGO’s CEO, put it, “We are on a burning platform, losing money with negative cash flow, and a real risk of debt default which could lead to a break up of the company.”1
How had the Danish toymaker fallen so far so fast? Arguably, the company’s problems could be traced back to 1981, when the world’s first handheld game, Donkey Kong, came to market, inspiring a debate within the pages of LEGO’s internal magazine, Klodshans, about what so-called “side-scrolling platform games” meant for the future of construction toys. The consensus: platforms like Atari and Nintendo were fads—which turned out to be true, at least until the advent of computer games for PCs launched their wildly successful second wind.
I had begun advising LEGO in 2004 when the company asked me to develop its overall branding strategy. I didn’t want the company to move away from what it had been doing well for so long, but no one could deny the increasing everywhere-ness of all things digital. From the mid-1990s on, LEGO began moving away from its core product, i.e., building blocks, and focusing instead on its loosely knit empire of theme parks, children’s clothing lines, video games, books, magazines, television programs and retail stores. Somewhere during this same period, management decided that considering how impatient, impulsive and fidgety millennials were, LEGO should begin manufacturing bigger bricks.
Every big data study LEGO commissioned drew the exact same conclusions: future generations would lose interest in LEGO. LEGOs would go the way of jackstraws, stickball, blindman’s bluff. So-called Digital Natives—men and women born after 1980, who’d come of age in the Information Era—lacked the time, and the patience, for LEGOs, and would quickly run out of ideas and storylines to build around. Digital natives would lose their capacity for fantasy and creativity, if they hadn’t already, since computer games were doing most of the work for them. Each LEGO study showed that the generational need for instant gratification was more potent than any building block could ever hope to overcome.
In the face of such a prognosis, it seemed impossible for LEGO to turn things around—but, in fact, the company did. It sold off its theme parks. It continued successful brand alliances with the Harry Potter, Star Wars and Bob the Builder franchises. It reduced the number of products while entering new and underserved global markets.
Still, probably the biggest turnaround in LEGO’s thinking came as the result of an ethnographic visit LEGO marketers paid in early 2004 to the home of an 11-year-old boy in a midsized German city. Their mission? To figure out what really made LEGO stand out. What executives found out that day was that everything they thought they knew, or had been told, about late twentieth- and early twenty-first-century children and their new digital behaviors—including the need for time compression and instantaneous results—was wrong.
In addition to being a LEGO aficionado, the 11-year-old German boy was also a passionate skateboarder. Asked at one point which of his possessions he was the most proud of, he pointed to a pair of beat-up Adidas sneakers with ridges and nooks along one side. Those sneakers were his trophy, he said. They were his gold medal. They were his masterpiece. More than that, they were evidence. Holding them up so everyone in the room could see and admire them, he explained that one side was worn down and abraded at precisely the right angle. The heels were scuffed and planed in an unmistakable way. The entire look of the sneakers, and the impression they conveyed to the world, was perfect; it signaled to him, to his friends and to the rest of the world that he was one of the best skateboarders in the city.
At that moment, it all came together for the LEGO team. Those theories about time compression and instant gratification? They seemed to be off base. Inspired by what an 11-year-old German boy had told them about an old pair of Adidas, the team realized that children attain social currency among their peers by playing and achieving a high level of mastery at their chosen skill, whatever that skill happens to be. If the skill is valuable, and worthwhile, they will stick with it until they get it right, never mind how long it takes. For kids, it was all about paying your dues and having something tangible to show for it in the end—in this case, a pair of tumbledown Adidas that most adults would never look at twice.
Until that point, LEGO’s decision making was predicated entirely on reams of big data. Yet ultimately it was a small, chance insight—a pair of sneakers belonging to a skateboarder and LEGO lover—that helped propel the company’s turnaround. From that point on, LEGO refocused on its core product, and even upped the ante. The company not only re-engineered its bricks back to their normal size, it began adding even more, and smaller, bricks inside their boxes. The bricks became more detailed, the instruction manuals more exacting, the construction challenges more labor-intensive. For users, it seemed, LEGO was all about the summons, the provocation, the mastery, the craftsmanship and, not least, the hard-won experience—a conclusion that complex predictive analytics, despite their remarkable ability to parse “average” scores, had missed.
Cut to ten years later when, during the first half of 2014, in the wake of the worldwide success of The Lego Movie and sales of related merchandise, LEGO’s sales rose 11 percent to exceed $2 billion. For the first time ever, LEGO had surpassed Mattel to become the world’s largest toy maker.2
Believe it or not, almost every insight I come up with as a global branding consultant happens just this way. I might be developing a new car key for Porsche owners, designing a credit card for billionaires, creating a newfangled innovation for a weight-loss organization, helping reverse the fortunes of a stumbling American supermarket chain or trying to position the Chinese automotive industry to compete globally. There’s a well-known quote that says if you want to understand how animals live, you don’t go to the zoo, you go to the jungle. And so I do. In nearly every instance, after conducting what I call Subtext Research (which I occasionally shorten to Subtexting), a detailed process that involves visiting consumers in their homes, gathering small data offline and online, and crunching, or Small Mining, these clues with observations and insights taken from around the world, there almost always comes a moment where I uncover an unmet or unacknowledged desire that forms the foundation of a new brand, product innovation or business.
Over the past 15 years, I’ve interviewed thousands of men, women and children in their homes in 77 countries. I’m on a plane, or inside a hotel room, 300 nights a year. The drawbacks of living a life like this are obvious. I can’t really call anyplace home, relationships are hard to sustain, and children and pets aren’t an option. Still, there are benefits. Among them is the ongoing opportunity to observe people and the cultures they inhabit from their perspectives, and to try to answer questions like: How do groups of people form? What are their core beliefs? What do they aspire to, and why? How do they create social ties? How does one culture differ from another? Do any of these local beliefs, habits or rituals have a universal significance?
Not least are the examples of odd behavior, or general truths, I stumble on all across the world. We are afraid, for example, of letting others know more about us than we know about ourselves, fearing most of all that our masks will slip, and we will lose control, letting others see us as we truly are. We are unable to perceive the people we love—husbands, wives, partners, children—aging physically in the same way we notice people we see less often getting older. All humans experience “candy moments”—an internal reward system that takes place while we’re working, reading, thinking or focusing, and that divides and re-energizes our routines and re-stimulates our attention. Relatedly, we “reward” ourselves in the wake of completing a big job, just as the generosity we feel toward others around the holidays results in our buying presents for ourselves. And, in a transparent, overpopulated world where we spill our inner lives online, more than ever the concept of “privacy” and “exclusivity” has become the greatest luxury of all.
Why do most of us when we’re on our cell phones walk around in a circle as we’re speaking, as if somehow to create a moat, or wall, of privacy? Why, when we’re hungry or thirsty, do we open the refrigerator door, glance up and down at the contents, close the door and a few moments later repeat this same behavior? Why when we’re late for an appointment do we seek out clocks that tell a “better time,” thereby justifying our tardiness? Why in an airport or train station or rock concert do we perceive people in crowds as average members of “the masses”—not realizing that they are doing exactly the same with us? Why do so many people get their best ideas in the shower, or in the presence of water?
The people I study and interview could be teenaged girls living in a Brazilian favela; merchant bankers in the Czech Republic; housewives in Southern California; sex workers in Hungary; mothers-in-law in India; or sports-obsessed fathers in Geneva, Beijing, Kyoto, Liverpool or Barcelona. Sometimes I go so far as to move inside people’s houses or apartments where, with the owners’ permission, I make myself at home. The families and I fraternize, listen to music, watch television and eat all our meals together. During these visits—again, with permission—I go through refrigerators, open desk drawers and kitchen cabinets, scour books, magazines, music and movie collections and downloads, inspect purses, wallets, online search histories, Facebook pages, Twitter feeds, emoji usage and Instagram and Snapchat accounts. In the search for what I call small data, almost nothing is off-limits. I’ve gone so far as to interview consumers through text-messaging—a study shows that people lie less frequently in texts3—though I’m far more likely to take people by surprise by inspecting their microwave ovens and glass and plastic recycling cans.
More intriguing than the differences among the men and women I meet and talk to and observe—and the variations of place, and climate, and culture and skin color that I see over the course of a typical year—are the characteristics we all share. (I believe firmly that there are only between 500 and 1,000 distinct types of human being in the world. I’m one of them, and so are you.) I’ve come to realize, too, that my capacity to link a single observation with another across multiple countries in the course of building or rescuing a brand amounts to a strange skill of sorts. At the end of the day, the apartment buildings in the Russian Far East are fundamentally no different from the gated communities of the American South; and given the extreme climates of both Saudi Arabia and Russia, the behavior of Middle Easterners is in many respects identical to that of Siberians. I’ve never studied social science, or trained as a psychologist or a detective, but people have told me that I think and behave like all three. I tell them instead I see myself as a forensic investigator of small data, or emotional DNA—a hunter, almost, of desire—a habit that developed by chance when I was a little boy growing up in the farm town of Skive, Denmark, population 20,505.
When I was 12 years old, doctors diagnosed me with a rare inflammatory form of vasculitis. Henoch-Schonlein Purpura causes bleeding in the small blood vessels of a patient’s skin, joints and intestines and can also lead to irreversible kidney damage. I was placed in an isolated hospital room, where for months I wasn’t able to move. Apart from a few other patients separated from me by a pair of blue-gray curtains, and a few feet of olive-green linoleum, I was alone.
I woke up every day by 7 a.m. One of the nurses would bring me breakfast and I’d begin my daily regimen of informal surveillance. I’d study my caregivers, my fellow patients, their friends, other family members and, when all those categories were exhausted, as they soon were, myself. I launched this routine as a way of getting through the grueling, boring days of my convalescence. By the time I walked out of the hospital a few months later, I was convinced, in the supercilious way common to some 12-year-old boys, that I understood human beings better than anyone ever had.
What is Patient no. 3 doing now? What will Patient no. 4 do 15 minutes from now? Patient no. 5’s voice becomes noticeably hoarser and sicker-sounding when his mother comes to visit, and Patient no. 3 invariably flips his apple juice container upside down when he’s done drinking it. I became aware of how the nurse always slid our clipboards back into their slots with such care they made no sound, and how the nurses holding heavier clipboards seemed more self-important, while those without clipboards seemed somehow meeker and more subservient. I made hundreds, even thousands, of observations like these every day as I’m sure anyone imprisoned in a hospital room would. What most people might be quick to dismiss, or roll their eyes at, or forget, I mentally logged, filed and analyzed.
The rest of my stay I spent with a boxful of LEGOs my mother gave me to pass the time. In retrospect it’s funny how my hospitalization served to cultivate two of my favorite pastimes and compulsions, namely, LEGOs and people watching.
By the time I left the hospital, I’d gotten pretty good at LEGOs—good enough, in fact, that I got it into my head to construct a mini replica of LEGOLAND in my parents’ backyard, which attracted the interest of LEGO Headquarters, as well as two of their patent lawyers. What was the best way to deal with a 12-year-old who loved LEGOs so much that he’d illegally built a facsimile of one of its theme parks? I’m happy to say the company hired me as a model builder and innovator! But that’s a story for another time.
What I learned during my hospitalization was more than how to create byzantine LEGO structures. It helped train my eyes and ears to notice, deduce, interpret and, ultimately, make sense of an adult world. Patient no. 5’s Pavlovian change of voice reflected his need for maternal care. Patient no. 3 would have done anything to break up the hours he was spending in his hospital bed, and one way to do this was by loudly flipping over his juice container. The nurse who came at night seemed mostly indifferent to her patients, but maybe by being so clumsy and noisy with food trays she was signaling how little recognition she got from her colleagues. No matter how insignificant it may first appear, everything in life tells a story.
As my hospitalization went on, and the staff let me move around more, I remember gazing out the windows at people making their way to their cars and bikes and studying what they wore, and their shoes or sneakers, and what their posture was like, and whether or not they wore any jewelry or wristwatches, and how they behaved when they thought no one else was watching—the young mother combing her hair in a hurry, the businessman reaching back to adjust the heel of his shoe, the teenaged girl preoccupied by the music coming through her earbuds.
How did the mother’s manner change when she interacted with other mothers? When her baby cried, how did she calm her? The businessman wore a white, button-down shirt with the tails untucked and wrinkled. Was he aware of this? Was it intentional? Was he showing the world what a rebel he was, or was he just sloppy, or was it self-sabotage? Why did he keep glancing at his watch? Did he hope time would slow down, or speed up? The rubber band he wore on his other wrist—what did that signify? Was he quitting a bad habit, or did it remind him of someone he loved?
It took a childhood disease to give me an outsider’s perspective on myself and other people, and to begin to transform the way I looked at the world. I began to register humans as fascinating and alien, which, of course, we are.
Do any of us really know how we come across to other people? Are we aware of the haphazard sequence of small data we leave behind us every day—the rituals, habits, gestures and preferences that coalesce to expose who we really are inside? Most of the time, the answer is No. What we snack on, how we choreograph our Facebook page, what we tweet, whether we chew cinnamon gum or nicotine lozenges—all these slight gestures may at first seem indiscriminate, undirected and too small to have much bearing on our identities. But when we begin to see life through the new and unfamiliar lens of small data, we also come across revealing clues about the people closest to us, including ourselves.
Small data could be inside an oven or a medicine cabinet or inside a Facebook photo album. It could be contained in a toothbrush holder in a bathroom in Tel Aviv, or in how a roll of toilet paper presses up against a bathroom wall in northern Brazil. It could show up in how a family’s shoe collection is arrayed in a hallway, or in the scrambled letters and numbers that make up a person’s computer password. In the course of doing Subtexting, I dig through garbage cans past squeezed-out toothpaste tubes and ripped candy wrappers and expired coupons, searching for that one thing that will solve the puzzle, or provide the answer I need, even when I’m not sure what the puzzle consists of, or what it is exactly that I’m looking for. A lone piece of small data is almost never meaningful enough to build a case or create a hypothesis, but blended with other insights and observations gathered from around the world, the data eventually comes together to create a solution that forms the foundation of a future brand or business.
My methods may be structured, but they’re also based on a whole lot of mistakes, and trial and error, and faulty hypotheses that I have to toss out before starting over again. (I’ll go into my 7C methodology in much more detail in the final chapter.) When I enter someone’s home, the first thing I do is gather as much rational, observable data as I can. I make notes, take hundreds of photos, shoot video after video. The smallest detail, or gesture, may become the key to unlocking a desire that men, women and children (and, in some cases, the culture itself) didn’t know they had. I look for patterns, parallels, correlations and, not least, imbalances and exaggerations. Typically I focus on the contrasts between people’s day-to-day lives and their unacknowledged or unmet desires, evidence that can be found anywhere from a Middle Eastern prayer rug laid down on the floor facing in the wrong direction to a chipped hand mirror in a bathroom drawer in Siberia.
After months of observation and research, I set out all my findings on a bulletin board. It serves as both a mural and a time line. What desires lie in the gap between perception and reality, between reality and fantasy, between people’s conscious and unconscious fantasies? What are the imbalances inside the culture? What is there too much of, or too little? What desires aren’t being fed?
If for no other reason, companies bring me on as a consultant to determine what it is we really want as humans so that they in turn can figure out ways to provide it. My job title may be “branding consultant,” but most organizations hire me on as an itinerant sleuth whose mission is to smoke out that foggiest, most abstract of words: desire. Desire is always linked to a story, and to a gap that needs to be filled: a yearning that intrudes, agitates and motivates human behavior both consciously and unconsciously.
Desire manifests in one form or another hundreds of times a day, in countless faces and guises. It can show up as sexual desire, or in our appetite for food, or for alcohol, or for drugs. It can appear as the desire for money, or for status, or the need to belong to a group, the need to blend in with a crowd or, alternately, to stand out. It can be the desire to become one with another person, or with nature, or with music, or with what’s commonly known as “the universe.” We crave the security of the past, which is a desire, and the promise of the future, which is another desire. In order to “become” more desirable to others, we buy new clothes, brush our teeth, apply face cream, shave, order a new pair of glasses. (At the same time, as a friend of mine once observed, “The most difficult thing is to look in the mirror and describe yourself.”)
Needless to say, desire is elusive. It has a habit of receding once you think you’ve captured it, only to show up again a few seconds later. All across the world, every culture has its own corridors for desire and escape. Brazilians go to the beach, as do natives of Sydney and Los Angeles. Americans, Middle Easterners and Indians all flock to the movies, or to malls; the English cluster at soccer matches, and at pubs. If you live in Saudi Arabia, escape may involve a trip to Oman. If you live in Oman, escape may be a trip to Dubai. For a Dubai native, escape means London. For a Londoner, escape involves the Andalusian coast of Spain, or the south of France, or California, or Florida. We desire whatever it is—the place, the person, the thing, the period in our lives—we’re convinced we’re lacking.
The work I do is a sped-up version of ethnographic, or participatory, anthropology, the difference being that instead of spending years in one place observing a tribe of people, I spend weeks and sometimes months in another country. Like any anthropologist—if I can call myself that—I see myself as a neutral amalgamator and observer who pieces together small data, creating a mosaic from which I try to Small Mine a reasonable story line. And like ethnography, my work never really ends. I begin and end my days blindly. I rely on random perceptions and chance revelations. Countries change, after all, and so do the cultural and political mixes of those countries. Technology changes who we are as humans, which causes us to adapt and evolve accordingly.
Over the years, some people have asked how a Danish-born “foreigner” like me is able to travel from one country to the next in an attempt to bring to light desire in areas of the world he doesn’t know well. Does it make any sense to bring in a stranger, they wonder, especially one who’s there for only a short time? Wouldn’t a Frenchman be a better judge of Parisian culture, or an Australian more up-to-speed with what’s going on in New South Wales and Queensland? Why not hire a Japanese consulting firm in Japan, a Russian branding company in Russia or an American agency in the United States?
The thing is, I can almost guarantee you that a local team will miss something. The German American anthropologist Franz Boas is responsible for coining the word Kulturbrille, or “culture glasses,” a term that refers to the “lenses” through which we see our own countries. Our Kulturbrille allow us to make sense of the culture we inhabit, but these same glasses can blind us to things outsiders pick up immediately.
In Japan, for example, the kitchen and the laundry room are the only two zones of the home that only married Japanese women are “allowed” to enter. This isn’t a formal law, but an unspoken custom. How, then, can a Japanese or multinational company go about selling things to women in a nation where three-quarters of Japanese males do the household shopping on behalf of their families, and are unlikely to know what everyday household items their families may need? Most Japanese marketers would lack the perspective or the distance even to notice this. Years ago, in Copenhagen, I went for a stroll with a retail expert who travels as much as I do. “There’s no structure in how Danes walk,” he said at one point. “They walk all over the place.” He was right. I grew up in Denmark, but I’d never noticed this before.
There is a family of freshwater insects known as Gerridae—otherwise known as water bugs, water striders or water skaters—that skim lightly across ponds and lakes. I think of myself as the business equivalent of a water skater. I realize, too, it’s both a vulnerability and a strength to enter a country without any fixed ideas. Any outsider risks making generalizations or conclusions that may be incomplete, or naïve, but I’ve always trusted my instincts—and what are instincts if not experiences and observations accumulated over time that enable a person to make fast conclusions without knowing precisely how?
In-person observation, and a preoccupation with small data, is what sets apart what I do in a world preoccupied by big data. Most of us judge practically everything in seconds, or minutes at most. We’ve become spontaneous seekers and instant responders. As more and more products and services migrate online, and technology helps us understand human behavior in real time at granular levels, many people have come to believe that human observations and interaction are old-fashioned and even irrelevant. I couldn’t disagree more. A source who works at Google once confessed to me that despite the almost 3 billion humans who are online,4 and the 70 percent of online shoppers who go onto Facebook daily,5 and the 300 hours of videos on YouTube (which is owned by Google) uploaded every minute,6 and the fact that 90 percent of all the world’s data has been generated over the last two years.7 Google ultimately has only limited information about consumers. Yes, search engines can detect unusual correlations (as opposed to causations). With 70 percent accuracy, my source tells me, software can assess how people feel based on the way they type, and the number of typos they make. With 79 percent precision, software can determine a user’s credit rating based on the degree to which they write in ALL CAPS. Yet even with all these stats, Google has come to realize it knows almost nothing about humans and what really drives us, and it is now bringing in consultants to do what small data researchers have been doing for decades. As one analyst once told me, “Considering that management doesn’t know what to do with big data, everyone is searching for what is post big data—and the answer is small data.”
Millward Brown Vermeer recently initiated Marketing2020, one of the most comprehensive marketing leadership studies ever launched, which included in-depth interviews with more than 350 CEOs, CMOs and agency heads. Not surprisingly, authors Marc de Swaan Arons, Frank van den Driest and Keith Weed found that many marketing organizations have lost their way. In an article published in the Harvard Business Review, the authors concluded that if data and analytics fall under the “Think” category, and content, design and production development fall under the “Do” category, then marketers who focus on consumer engagement and interaction belong to the “Feel” category.8 All three functions are essential, they argue. In short, the integration of online and offline data—that is to say, the marriage of big data and small data—is a crucial ingredient of marketing survival and success in the twenty-first century.
This is understandable. We’re living in an era in which our online behaviors and communications are haunted by subtext and obfuscation. The German word maskenfreiheit can be translated into “the freedom conferred by masks,” and anyone who has ever spent time online knows that the ability to customize our digital selves, and our occasional online anonymity, creates personae that bear only a loose resemblance to the people we actually are, and the lives we actually live, when we’re offline. You might say that thanks to technology, we are all at least two people, with at least two residences: a bricks-and-mortar home and a home page. Sometimes they overlap, but often they don’t.
Nor can we say we are any more “ourselves” when we surf the Web anonymously. Without a name, or a face, or an identity, we become primitive versions of ourselves, a phenomenon some experts attribute to a lack of empathy that comes from communicating laptop to laptop, and that is also familiar to anyone who has ever flipped off a pedestrian, or worse, while driving a car. Empathy, the New York Times pointed out last year, is learned two ways. One is by experiencing something distressing ourselves. Another is “by seeing, hearing or even smelling how your action has hurt someone else—something that is not available to those behind a screen and keyboard.”9 (Or, for that matter, behind the wheel of a car.) This is the paradox of online behavior. We’re never truly ourselves on social media, and when we communicate anonymously, the result lacks any context that our offline lives might provide and enrich. Online, what we leave behind is largely considered and strategic, whereas the insides of our refrigerators and dresser drawers are not, as they were never intended for public exhibition.
This is why, in my opinion, the best, closest approximation of who we are as humans comes from mixing our online and offline selves, and from combining big data with small data. Considering that 90 percent of what people give off in conversation are nonverbal signals, our truest identities can be found by studying who we are in our real lives, cultures and countries. This amalgamation of gestures, habits, likes, dislikes, hesitations, speech patterns, decors, passwords, tweets, status updates and more is what I call small data.
In the pages that follow, I invite you to fly around the world with me, gathering small data in the course of bringing to light cultural desires necessary to solve puzzles no less challenging, and usually far less straightforward, than the LEGO example. In an information age in which most of us spend all day with our eyes trained on screens, my hope is that this book will inspire you to become even more aware than you are already of the clues around you, and to become conscious of the similarities that exist among all of us. The mission of any brand builder is really no different from that of anyone alive, which is to avoid what mythologist and writer Joseph Campbell once described as the greatest human transgression: namely, the sin of inadvertence—of not being alert, or altogether awake, to the world around us.