Disrupt with a "Skunk Works" team

SR 71 Blackbird, front view.

Very often we find ourselves in large companies motivated, satisfied and staying focused on a big objective, developing ideas and solving problems with other departments. More often than not we will believe ourselves as innovators, developers and executioners inside the company, giving ourselves a collective tap in the back. However, we haven't realized that most of the times, this type of innovation, if any occurs, is the least disruptive.

There are 3 types of innovation. Incremental which impacts the company by improving processes and methods. Breakthrough which impacts markets by launching new products or business units leveraged from your existing company. And finally the Transformational innovation, used to change the world.

In big corporations, project execution, revenue growth and business development is usually projected linearly, due to a tendency to protect the company from risk and uncertainty. This translates to anchors that will kill innovation and agility like budget control, reporting to hierarchy, judgment for failure and extended processes like policies, procurement and internal communications. This situation leads to incremental innovation where cost efficiency and execution times are optimized for your current activities, and in the end is performed by every single employee on the company.

Examples of this type of innovation is all around us where the learning curve is moving forward as we speak. For instance, when people implement automated processes, or contractors and providers develop tools and create new methods to control service levels lead to an improvement in performance that in my mind looks like this:

Another situation is when the marketing team creates a whole new idea for a product after a deep research analysis together with your engineering team worrying about the technical stuff. So you do a pricing exercise, plan the Go To Market strategy and hope to capitalize the market faster than your competitors with your commercial team. This breakthrough innovation is actually a nice balance for companies where product development and launch are treated like projects, with budgets, objectives, sponsors and resources allocated from many departments, increasing the performance in steps each time a project is completed.

To give you a few examples on this innovation, think of Microsoft and how they have expanded their products from operating systems, to office suites, video game consoles, tablets and most recently Teams, a utility software for managing internal communications. Another example is Amazon, which started with books, and now offers mobile phones, video streaming and cloud services. Nevertheless, these innovations are successful but also projected linearly in steps (each step is a product release). In my mind the performance looks something like this:

The last type of innovation is harder to develop, nevertheless it's when things start to be fun. To understand one way to accomplish this innovation, I recommend you to read the book by Ben Rich titled as the team he lead to achieve the unimaginable, the Skunk Works. In his book he explains many processes and obstacles they had to overcome, and most important the way they think and develop structures, process and even sales to accomplish lunar-like objectives.

Transformational innovation will lead a large enterprise to develop things that never existed before and outperform current products by hundreds or thousands factors while keeping costs and constraints in shape, outperforming the competition and leaving a mark in the world. The performance ratio would look like this:

Starting a Skunk Works operation comes from having a dream. Forget the SMART and forget the OKR theory. Kelly Johnson and Ben Rich built planes with characteristics written on single papers and even napkins. Simple yet challenging. For instance, when Skunk Works started the U2 project, all they wished for was for a plane to fly higher than the radar beam of the Surface to Air Missiles (SAM), which was 60,000 Feet, so they set the bar for 70,000 feet with enough autonomy to overfly russia (1,500 milles). Simple enough? yet effective.

I want to you to look at the following picture and see the evolution of the planes, and the reason of their conception. The U2 was built as a spy-plane to fly higher than the Russian surface Missiles. Then the SR71 Blackbird was built to improve the U2, giving it the speed to outperform fighter planes and autonomy to fly across the globe. However, these planes were always visible on enemy radar from the moment they took off, nevertheless unreachable, but generated political noise and risk to be shot down if the pilot made an error, so they developed the F117 which was invisible to radar altogether.

Planes built at Skunk Works. U2, SR71, F117 and F22.

After having your objective, it is time to build a Skunk Works team with great self-injected passion. Not employees... think something more like hobbyist... people that breath and bleeds what they are doing. The skunk works explained how they chose employees based on achievements and creativity, and how they were "transferred" to their special division where they met with other chosen ones. Steve Jobs had something similar to this concept at Apple, as he worked in his Mac team called "pirates", wearing a flag and shining eyes for the products they were developing, outcasted from the mothership.

This team is the one you can ask anything to do and they will do it no matter what it takes in time, sacrifice, hours put, developments to be made etc. Please note this is different than exploiting them, rather they will overcome any obstacle for themselves as end-users of their passionate hobby because they want to see the finished product and use it. They don't do it for the customer, they are doing it for themselves, for their own personal satisfaction.

Another key feature of this skunk works team is autonomy and independence. You must assign resources and budget,  but this must be controlled inside the team, not from the large organization. In his book, Lockheed's CEO indicates how he never knew what Skunk Works was doing, and only could hope that after a tough board meeting with decreasing revenues, Ben Rich would show up with a smile saying "I bet you don't guess what profits I got this quarter". To accomplish this, the organization must leave the team at the edge of the organization, so they disrupt but don't get attacked by with anxiety from the mothership to give results or ROI.

Leverage on providers, simple procurements and team building for execution. Forget complex documents, focus on the objective and not on the process, for example do an RFP, documents and purchases order worth a couple of pages instead instead of millions of papers, documents and archiving. You must focus on alliances to reach the objective, not contracts to screw or bulletproof yourself from the provider. Read this amazing story on how they forged the largest Titanium Frame in the world, with imported titanium from the Soviet Union, the country they wanted to spy with the plane!

To build teams, people should be involved in all the process, with open communications. Remember that everyone there is because they want to be. The Skunk Works kept the engineers close to the designers and the fabricators in the shop, providing the environment to work together and get instant feedback without bureaucracy. Everyone was involved and accountable for their actions and each action led to something either positive or negative on the design, which would receive instant feedback from the team affected. 

Another key point on execution is end-to-end ownership of the project. Many skunk works wannabe's do everything right until they have to integrate to other existing areas and things wreck havoc. In Skunk Works they had their own pilots, field engineers and maintenance crew trained and ready to be delivered with the plane. If the CIA or the USAF requested the use of their pilots instead, they were sent down to the skunk works team to live, breath and build together the plane, absorbing them into the culture of the team. This would last until full deployment of a Combat Operative Squadron for war, where knowledge had been completely passed over to the operators.

Finally, the Skunk Works needs a savvy, wise-as-a-fox leader with extreme situational awareness to know what is going around in the industry and the stakeholders, bravery to take on the big wheels of the company while empowering and protecting his team, and to sell and believe in his ideas to customers. In the original Skunk Works, Ben Rich had sold his planes even before they were built, because he knew what he had in his hands and managed to get the buy-ins from the Congress in very peculiar ways. For example, to shush the nay-sayers of the stealth plane he would drop ball bearings on the desk to show how small the radar cross section was, comparing other's planes radar signature to cars, buses and buildings out the window.

At the end of the day, most of us won't be delivering stealth planes or have the resources, team, people or company to develop disruptive products in our real life jobs. Nevertheless, these Skunk Works concepts can be implemented by anyone willing to do something different in their company, wether leading a new product development or improving processes, or leading a team of people to reach an objective. You as a leader have the responsibility to analyze internally and determine how many things are being within the philosophy of a Skunk Works team.