Lego and SoleRebels say customer feedback is vital
- 29 August 2012
- From the section Business
When Bethlehem Tilahun Alemu, founder of Ethiopian footwear company SoleRebels, travelled 3,500 miles to Denmark to meet Jorgen Vig Knudstorp, the chief executive of toy company Lego, she was excited at the prospect of the two sharing their business experiences.
While the two groups are very different - Lego celebrates its 80th birthday this year, generates $3.5bn (£2.2bn) in sales and employs 9,000 people, whereas SoleRebels is just eight years old, has sales of $1m and employs 75 staff directly - she is hoping they will have some things in common.
Both firms are family owned and in terms of their leadership time at the top, Ms Alemu and Mr Knudstorp are on an equal footing. She founded SoleRebels in 2004 - the same year that he took over at Lego.
Ms Alemu was only in her 20s when she founded SoleRebels, revolutionising the way business is done in her home country.
Based in Zenabwork, a small community on the rural outskirts of Addis Ababa, Ms Alemu is the managing director of the Fairtrade-registered shoe company, whose footwear ranges are inspired by traditional Ethiopian-style shoes, and adapted to different markets.
She grew up in this small town and knew from a very early age she wanted to make a difference to her community.
Drawing on the traditional Barabasso sandals worn by the Ethiopian rebels who stopped the country being colonised in the 1930s, each pair of SoleRebels shoes is created using the skills of artisans who live in Zenabwork and crafted from recycled materials sourced within 60 miles of the company.
These eco-sensitive products have become sought after across the world, available through High Street and online retailers in countries from Canada to Taiwan.
Paying attention to the diverse needs of its customers is vital, says Ms Alemu.
"We have to serve different countries in different ways," she says. "For example, if we take Japan, the Japanese have got their own colours, their own tastes, their own designs, their own things that they think is going to suit them.
"So, when it comes to SoleRebels, we have to design only for Japan to penetrate their market. If you go to the States, it's another story. If you go to Taiwan, it's different.
"So, based on people, the countries, and then based on their culture, we have to find a way to sell our products."
'Listen to the complainer'
This ability to respond so quickly to customers' desires is something Lego boss Jorgen Vig Knudstorp envies.
Despite the difference in scale between the companies, he agrees that listening to feedback from customers is of the utmost importance.
His biggest fear is that Lego, the world's third biggest toy maker, becomes complacent. To avoid that, he says, they must talk to their customers "because they always have something to complain about".
"One of my slogans is 'Listen to the complainer' because sometimes when you get a customer complaint, people will say, 'But it's 1% of our customers or 0.1% of our customers which speak up,' which is true. But I think for Lego to survive, we need to deliver to extraordinary [levels]."
Lego is still based in the small Danish town of Billund, where it was founded by Ole Kirk Kristiansen in 1932.
For 60 years, the family firm, famed for its plastic connecting bricks, successfully returned a profit. But in the 1990s, Lego hit a crisis.
This was not just caused by changing play patterns and the attraction of alternative toys for children, but in part because the company had grown too rapidly, expanding into other areas, such as the Lego theme parks.
In 2004, the role of chief executive was handed to Mr Knudstorp, a former academic and McKinsey consultant, and within 18 months he had returned Lego to profit.
But his appointment had been a radical move for a company which until then had always been headed by a member of the Kristiansen family.
"Working with the family in a family-owned business is obviously an absolutely critical relationship for a CEO, but even for the entire organisation," Mr Knudstorp says.
"And my view, to be honest, in the beginning was that the family was just part of the problem the company had faced and I was very honest with them about it. And I think over the years, I've really come to recognise the huge benefit of family ownership, because it's a long-term stability."
SoleRebels, on the other hand, is still entirely family-owned and run, and Mr Knudstorp is curious to know whether Ms Alemu has plans to bring in any partners in order to fuel growth.
But for the time being she is unsure. "The problem is, once people get into your business they want to control you."
But she adds: "My business is like a child. Maybe it's going to grow, maybe it's going to walk by itself sometime."
Following their encounter, Mr Knudstorp admits that he was surprised by how much the two companies had in common and hints that a return trip may even be on the cards.
"The similarities were huge and I was kind of regretting that we were sitting here at the Lego base and not in Ethiopia, because I got really curious to see the set-up."
The Ideas Exchange is an eight-part series, starting on 1 September, broadcast on BBC World News on Saturdays at 02:30 and 15:30, and Sundays at 09:30 and 21:30 (all times GMT).
Every week, two international business leaders meet to talk about their different experiences of global markets and business.