Lockheed “Skunk Works®” – Intrapreneurship in Action!
Howard Edward Haller, Ph.D.
In early 1943, with World War II well underway, the U.S. Army’s Air Tactical Service Command (ATSC) had an air defense problem and they needed help – Now. So ATSC officials met with Lockheed Aircraft Corporation to express its dire need for a jet fighter to counter a rapidly growing German jet threat.
Only one month after the historic U.S. Army’s ATSC and Lockheed meeting – Clarence “Kelly” L. Johnson (a Lockheed engineer) and his team of bright young engineers hand delivered their XP-80 Shooting Star Jet Fighter proposal to the ATSC. ATSC immediately gave the green light for Lockheed to start developing on the United States’ first jet fighter. That history making event marked the birth of Kelly Johnson’s intrapreneurial group which became the famous Lockheed “Skunk Works®.” Lockheed’s “Skunk Works®” is a classic example of an intrapreneurship.
The XP-80 Fighter; An Intrapreneurial Success
Intrapreneur Kelly Johnson assembled his hand-picked team of Lockheed Aircraft Corporation engineers and manufacturing people to rapidly and secretly create the XP-80 Fighter project for the U.S. Army. There was no space available at the Lockheed facility for Johnson’s “Skunk Works®” group. However, this lack of space at “Corporate” actually worked in the “Skunk Works®” group’s favor. Being apart gave the group autonomy from the “suits,” “bean counters”, and the traditional “by the book” Lockheed engineers. Johnson’s Intrapreneurship “Skunk Works®” organization literally operated “out of a rented circus tent.”
The operation was guided by intrapreneurship principles and “out of the box” unconventional thinking. This new thinking enabled Johnson and his “Skunk Works®” team to create and operate effectively and efficiently. Kelly threw out the Standard Operating Manual, “broke the rules”, and actively challenged the corporate bureaucracy. The old traditional system slowed them down, cost time and money, and stifled innovation.
Intrapreneur Kelly Johnson and his “Skunk Works®” team designed and built the XP-80 in only 143 days (Seven days before the due day for delivery to ATSC.)
Intrapreneurship; Important Conclusions
Over 60 years ago Kelly Johnson came to several important conclusions which are important to every intrapreneurship venture. The underlying foundation of the entire secret “Skunk Works®” operation is contained in their stated official mantra, “quick, quiet, and quality.” Lockheed “Skunk Works®” was a successful intrapreneurship venture which was innovative and independent. They had an ability to eliminate the corporate “red tape” and would often begin a new project without a formal contract and without the formal bidding process or written agreement.
Kelly Johnson insisted upon his famous 14 Skunk Work Rules for all “Skunk Works®” employees:
- The “Skunk Works®” manager must be delegated practically complete control of his program in all aspects. They should report to a division president or higher.
- Strong but small project offices must be provided both by the military and industry.
- The number of people having any connection with the project must be restricted in an almost vicious manner. Use a small number of good people (10% to 25% compared to the so-called normal systems).
- A very simple drawing and drawing release system with great flexibility for making changes must be provided.
- There must be a minimum number of reports required, but important work must be recorded thoroughly.
- There must be a monthly cost review covering not only what has been spent and committed but also projected costs to the conclusion of the program. Don’t have the books ninety days late and don’t surprise the customer with sudden overruns.
- The contractor must be delegated and must assume more than normal responsibility to get good vendor bids for subcontracts on the project. Commercial bid procedures are very often better than military ones.
- The inspection system as currently used by ADP [Advanced Development Programs], which has been approved by both the Air Force and Navy, meets the intent of existing military requirements and should be used on new projects. Push more basic inspection responsibility back to subcontractors and vendors. Don’t duplicate so much inspection.
- The contractor must be delegated the authority to test their final product in flight. They can and must test it in the initial stages. If they don’t, they rapidly lose their competency to design other vehicles.
- The specifications applying to the hardware and software must be agreed to in advance of contracting. A specification section stating clearly which important military specification items will not knowingly be complied with and reasons is highly recommended.
- Funding a program must be timely so that the contractor doesn’t have to keep running to the bank to support government projects.
- There must be mutual trust between the military project organization and the contractor with very close cooperation and liaison on a day-to-day basis. This cuts down misunderstanding and correspondence to an absolute minimum.
- Access by outsiders to the project and its personnel must be strictly controlled by appropriate security measures.
- Because only a few people will be used in engineering and most other areas, ways must be provided to reward good performance by pay not based on the number of personnel supervised.
Intrapreneurs around the world owe Kelly Johnson for the forward “out of the box” intrapreneurship spirit that was exhibited and foster at “Skunk Works®” long before the term “intrapreneurship” was ever thought of over thirty years later.