Developing Sustainable Competitive Advantage through Operational Excellence and Adaptation Excellence with Value-Innovations

In a relatively stable environment most organizations can develop a strategic plan with a clear focus and direction. Its successful execution can achieve strategic goals mainly through operational excellence. However, when change in the external environment is rapid and outcomes cannot be anticipated, leadership must shift its priority to the exploration of new value opportunities and systematically experiment to see what works and what does not. Under such conditions what matters most is the capability to experiment efficiently, to test and to adapt to an environmental context undergoing significant change.

Leadership under these conditions must pursue a balance between the need for short-term earnings with an effective exploration of new opportunities and threats, as changes in customer preferences rearrange the competitive landscape. The quality of the value-innovation process will be determined by the creativity, talent and (tacit) knowledge of an organization’s employees, rather than the effectiveness and efficiency of the conventional supply chain which delivers its products and services.