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Want to accelerate software development at your company? See how we can help.
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Operations in an Era of Radical Uncertainty - Harvard Business Review   

Operations have always been foundational to competitive advantage, but the nature of this relationship is shifting: Historically, the strategic goal of operations was to achieve scale in order to create a sustainable efficiency advantage. In recent years, winners have focused more on ensuring their operations and strategies were adaptive to changing and unforeseen circumstances, with resilience driving outperformance. In the era of radical uncertainty we are now entering, the next frontier of operations will be to enable optionality, which entails an even closer integration with strategy.

Operations have always been, and remain, crucial to achieving a competitive advantage. Tim Cook, who has created more shareholder value than any other CEO at any other company, is an operations specialist. Indeed, he believes that being innovative in operations was crucial to Apple’s success even when the visionary, Steve Jobs was at the company’s helm.

But the nature of competitive advantage shifts over time — and so does the role operations plays in it. Historically, the main strategic value of operations was to create scale in order to gain a self-reinforcing efficiency advantage by riding the experience curve. With the digital revolution, static, physical scale lost its edge: By building or leveraging digital platforms and ecosystems that connected suppliers and consumers, even small start-ups were able to attain dominant positions and high margins.

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