Global Logistics and Supply Chain Strategies - August 2008 - (Page 34) The importance of this factor also was documented in Booz-Allen-Hamilton’s 2007 Global Innovation 1000 survey of the world’s largest R&D spenders. This study showed that companies with the closest alignment between innovation and corporate strategy have superior financial performance, with 40 percent higher operating income growth and twice the shareholder returns over the last three years than companies with strategies that are less well-aligned. Shoshanah Cohen, director of the Global Supply Chain Innovation practice at PRTM, says there has been a noticeable increase in the number of companies creating a CIO position over the past couple of years. “That in itself is not a solution, but it is a demonstration of a company’s commitment to innovation and to making innovative processes a focal point,” she says. Sun recently combined its engineering and manufacturing organizations under one executive vice president, says Alstott. “We are hoping this new organization will allow us to break through some of the organizational barriers that could slow us down. We clearly see value in having everyone rowing in the same direction between the engineering and go-to-market and operations teams.” Another way to approach this organizationally is through councils, says Jeff Kavanaugh, partner at Infosys Consulting, Fremont, Calif. “We have seen these called Strategic Portfolio Councils or Planning Councils, but it is where leaders from the supply chain and new-product introduction areas, and possibly information technology and finance, join together to facilitate collaboration. We have seen it work effectively and think it is a useful notion in the interim because it doesn’t require a major overhaul at the senior level and yet you still give innovation increased attention. It comes down to how the governance is executed.” The key to making any cross-functional team work is to put the right incentives in place, says Cohen. “You can say cross-functional teams will focus on innovation from the time of concept through launch, but if you don’t put incentives in place and provide management examples at the senior level, it’s not going to happen.” One of the tactics PRTM is seeing among its clients is a formal effort to create incentives designed 34 AUGUST 2008
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