Lego, Meet Atari

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It was a big headline: Lego Will Cut 1,400 Jobs as Profit Dips, Despite Big-Screen Heroics. What? I thought Lego was one of the hottest companies around?

The most recent earnings report revealed the company is facing an increasingly competitive landscape because more children are using mobile devices for entertainment, even very small children. Lego, take note, there could be a parable in the form of Centipede and Space Invaders.

In the early 1980’s Atari employed thousands of people, including me. The young Steve Jobs and Steve Wozniak were there too. (Steve and Woz soon left to pursue other opportunities.) It was the dawn of civilization as we now know it.  It was exciting.  We ruled the world. The slogan for the Company was “The Future Is Here”. People who were born long after Atari was at its pinnacle think it’s a cool company and wish they had the opportunity to work there. But where is Atari today?

The history of the Company is well documented. Like an asteroid, it burned brightly and then crashed and burned. What was once dominant is now a footnote in the history of Silicon Valley. Atari products are now retro and the currency of eBay.

What happened? Lessons for other organizations to learn are clear, including: competitors will surround any “disruptive” company; and, basic business principles still matter. Principles like developing a clear plan, building an efficient organization chart and putting controls in place were all missing at Atari. I saw the void at the time although, like pretty much everyone else, I never spoke up.

The lessons for individuals are just as important. Lego people (real ones) should take note. But anyone at any “hot” company should pay attention. Nothing lasts, so think of the lessons in the form of some of those classic games.

  • Brands are sensitive. At one time Atari was one of the top brands in the world rivaling Pepsi and Coke and it disappeared. Like Atari, your personal brand can change quickly through a few missteps. Get drunk at the holiday party?  Watch your brand. Miss the deadline? You hurt your brand. You get the idea.
  • Momentum matters. Atari was the hottest company in the world. It had momentum but after a series of bad results, the momentum switched into the negative. Even if you feel like you are on a roll, your career momentum can go negative too. Know which way you momentum is going and make sure it’s on the positive side. Sometimes the game just goes your way, sometimes it is over before it starts.
  • Past success is in the past. Don’t dwell on what you used to do or be. The video game hits Atari had didn’t matter after a short while and the same is true for you. What you used to be or used to do is not as important as what you can do now. Don’t think you are invincible based on who you used to be.
  • Relationships matter. Even though Atari as a business went into the ditch what survived were the relationships. My Centipede and Donkey Kong games are long gone but many of the people that I met there all those years ago are still friends and colleagues. Regardless of the situation in any organization, relationships matter.

Admit it, your favorite video games are still Space Invaders or Ms. Pac Man.  Admit it, you still have the first castle you created with Legos. Admit it, Atari still matters because there are so many lessons to be learned from that pioneer of technology.

The world today is loaded with hot companies, including Lego. All of them are fragile and all of them offer personal lessons that apply to your career. Keep playing with those Legos but every once in a while break out Missile Command or Yars’ Revenge for reminders.

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