What are paradoxes and why are they relevant for decision-makers and organisations today?
In practice, paradoxes are different from simple ‘either-or’ choices, making paradoxical decision-making more complex. Paradoxes are situations that require decision-makers to continuously navigate between competing and evolving priorities. When faced with these seemingly contradictory alternatives, the tendency for many decision-makers is to select a single ‘either-or’ option that offers an optimal path forward. However, a ‘both/and’ approach can often lead to better decisions. Identifying and successfully navigating paradox is a key feature of successful decision-makers.
LEGO’s remarkable growth took off when its leadership embraced the power of balancing persistent tensions and paradoxes. What can you learn from their example?
LEGO: The Problem
Since its foundation in 1932, LEGO has maintained a laser-sharp focus on one product –LEGO bricks -and has been renowned for its rigorous quality control. In the early 90s, LEGO controlled nearly 80% of the construction toy market globally. Quality was paramount and every innovation was rigorously evaluated by the leadership team. It took LEGO nearly 10 years to decide to finally add a fifth colour -green -to the mix of bricks. By the late 90s, LEGO was challenged by its competitors, who started to introduce innovative digital and computerised toys. LEGO’s sales plateaued and then fell. Responding to this business challenge, in the early2000s LEGO completely shifted its focus away from quality to the other end of the spectrum -i.e. to innovation, with a new mantra: “Creativity above all else”.
The company introduced strategies to cut production costs and moved their resources to R&D, focusing on developing and promoting new ideas and new products. But instead of the hoped-for success, sales continued to decline. Retrospective studies by McKinsey have suggested that, despite the early successes, few of these innovations were actually profitable and R&D costs were excessive. Long-time loyal customers questioned the new offerings. Furthermore, the formerly tight supply chain lacked adequate controls over cost, quality and coordination. In shifting the focus from quality to cost, LEGO leaders found themselves adopting an ‘either-or’ approach, that led to them falling into the downside of each pole: efficiency and control on the one hand, versus innovation and change on the other. They realised that for years the strategic response had been to pivot from one strategy to the other, overemphasising one element of the tension and ignoring the other.
The Solution
The decline in performance was halted when LEGO’s CEO, Knudstorp, intentionally disrupted the old ways of operating by shifting the focus from ‘either/or’ to ‘both/and’. This enabled his team to adopt a non-binary perspective and to surface the contradictions and tensions in their business model. These included tensions between new and old; between innovation and efficiency; stability and change; and between modernisation and traditions. By embracing both aspects of these contradictions LEGO once again became renowned for both world class, bold innovation, as well as for disciplined quality and financial control. By driving this bold and fundamental shift in organisational mindset, Knudstorp was able to stem the decline and position LEGO for sustainable growth. Understanding how to embrace the persisting tensions and be able to achieve both elements required significant and intentional change at LEGO; the organisation needed to adjust its strategic direction and also to equip its leaders to maintain a ‘both-and’ mindset.
Explore more case studies
Invitation to collaborate in research
Turning tensions in project learning into strategic advantage
We are currently seeking forward-thinking industry partners ready to tackle learning paradoxes in their project environments.
- Are you a leader in a project-based organisation who recognises these challenges?
- Do you see valuable knowledge slipping through the cracks?
- Are you seeking research-backed strategies to strengthen long-term capability and performance?
We invite one or two industry partners to co-develop a research initiative focused on managing learning paradoxes in projects. Together, we’ll generate actionable insights tailored to your organisational context.
Interested? Find out more
Want to find out more about paradox?
This freely downloadable two-page factsheet, Navigating competing and persisting tensions for present and future success, provides more information on real-world paradox. Download it to kick-start a conversation about paradox with your team today.
