What is the “crawl-walk-run” approach to business? Why is it especially important to take this approach when it comes to technology?
Good-to-great companies engage with groundbreaking technologies in a very specific way: Rather than bet the house on the technology itself, they think deeply about how the technology can serve the company’s Hedgehog Concept. A good rule of thumb is to follow the “crawl, walk, run” approach—slow down and think about how a technology can help you realize your Hedgehog Concept, then move carefully toward a strategy. Once the strategy is in place and chugging along, however, don’t be afraid to step on the gas.
We’ll cover how to use the crawl-walk-run approach in business, and why you should. From Jim Collins’s Good to Great.
Early adopters of new technologies rarely come out on top. For example, who’s heard of VisiCalc? (VisiCalc, believe it or not, was the first major computer spreadsheet program. It lost out to Lotus 1-2-3, which, in turn, lost out to the current undisputed king, Excel.) Being the first isn’t always best. Sometimes, you don’t want to run to the next big thing. It’s smarter to take the crawl-walk-run approach.
The lack of proof that first-mover advantage works suggests that technology itself is rarely the cause of greatness or decline. Second, third, or fourth followers often win over the first mover.
What drives many mediocre companies to adopt a new technology is the fear of being left behind. In contrast, good-to-great companies were pushed by an internal urge to become excellent, with technology merely facilitating that goal.
Rather than race to incorporate a new technology to relieve the fear of being left behind, you might avail yourself of a crawl-walk-run approach:
- Crawl: Experiment with the new technology internally and facilitate a robust debate on its potential fit with your Hedgehog Concept.
- Walk: Begin to integrate the technology with your preexisting systems and priorities. Ask yourself continually whether the technology is serving your Concept or distracting you from it.
- Run: If the new technology provides clear advantages in your pursuit of your Concept, don’t hesitate to bet big and make a splash.
A High-Tech Hedgehog Is Still a Hedgehog
Collins and his team found, to their surprise, that 80% of the good-to-great leaders they interviewed didn’t list “technology” as a top-five reason for their companies’ success; and only two out of 84 executives listed “technology” as the number-one factor in their transition. When it came to tech, they followed a crawl-walk-run approach.
This is because the good-to-great companies were more concerned with the other elements of greatness: Retaining the right people, developing a Hedgehog Concept, cultivating a disciplined culture, etc.
That said, good-to-great companies that recognized when a new technology fit with their Hedgehog Concept made sure they were pioneers in the use of that technology.
- To increase its profit per employee, Wells Fargo was an early adopter of banking by phone and ATMs.
- Kroger pioneered computers to modernize its stores and was the first to experiment with scanners.
Crawl-Walk-Run Approach Example: Walgreens
When drugstore.com had its IPO in July of 1999, its stock price quickly rose threefold to $69 a share, resulting in a $3.5 billion valuation.
Walgreens, meanwhile, seen as a stodgy brick-and-mortar pharmacy company destined for the dustbin of history, lost nearly $15 billion in market value as investors raced to capitalize on the ease and quickness of online shopping.
Rather than panic, Walgreens took stock. They took the crawl-walk-run approach. They analyzed how the Internet could support their Hedgehog Concept of providing the most convenient shopping experience and maximizing profit per customer visit. They hit upon the idea of enabling customers to order medicines online and then pick them up at any Walgreens they chose, whether in-store or via Walgreens’s drive-through windows.
Once Walgreens’s plan was in place, they went big, rolling out a sophisticated website with impressive functionality and reliability.
Within a year, Walgreens’s stock price had doubled—and drugstore.com had foundered, needing to lay off 10% of its workforce to conserve cash and shedding nearly all of its initial value.
In terms of technology, what separates good-to-great from simply good is the presence of the other good-to-great factors. If you had given Nucor and Bethlehem Steel the same technology at the same time, Nucor still would’ve prevailed: because it already had the other good-to-great factors in place. When it comes to technology, adopting new innovations early won’t make or break you. Take the crawl-walk-run approach.
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