Intrapreneurship in Action!
Lockheed “Skunk Works®” an intrapreneurship success
By Howard Edward Haller, Ph.D. is Professional Keynote Speaker, Published Intrapreneurship Book Author, the Leading Expert and Thought Leader on Intrapreneurship, Corporate Entrepreneurship, Intrapreneurship Program Creation, Using Intrapreneurship programs as a strategic tool for Recruiting and Retaining Key Employees, and Using Intrapreneurship to Increase Innovation and Foster Creativity.
With World War II well underway, in early 1943, 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.
In 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. So, ATSC immediately gave the green light for Lockheed to start development on the United States’ first jet fighter effort. That history making event in June 1943 and this project marked the birth Kelly Johnson’s intrapreneurial group which became the famous Lockheed “Skunk Works®.” Lockheed’s Skunk Works was a classic and historic example of an Intrapreneur, with an intrapreneurial team and the implementation of in essence an Intrapreneurship program within Lockheed Aircraft Corporation.
Intrapreneur Kelly Johnson assembled his hand-picked team of Lockheed Aircraft Corporation engineers and manufacturing people to rapidly create and secretly complete 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. This lack of space at “Corporate” actually worked in the Skunk Works groups favor and that gave them 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.”
Johnson cautioned every member of the Skunk Works team that design and production of the XP-80 Shooting Star Jet Fighter had to conducted and carried out in strict and total secrecy –even to anyone within the Lockheed Aircraft Corporation. No Skunk Works employee was to even discuss anything about the project or their work outside the small Skunk Works organization. The Skunk Works team members were specifically warned to be careful even how they answered the phones.
In classic “Skunk Works” fashion they began the work immediately on their XP-80 Shooting Star Jet Fighter, even though they did not have a written formal contract with the U.S. Government. Four months after the Lockheed “Skunk Works” began working on the XP-80 the formal contract ATSC for the XP-80 arrived in October 1943. The Skunk Works group regularly would begin work without a formal contract. Customers would come to Skunk Works with an informal request, and then with only handshake Skunk Works group would start on the customer’s project.
Lockheed Skunk Works was a successful Intrapreneurship venture which was very innovative and very independent. They had an ability to eliminate the corporate “red tape” and would often just begin a new project, without a formal contract and without a formal bidding process or written agreement.
Successful Corporate entrepreneur, or Intrapreneur, Kelly Johnson and his Skunk Works team designed and built the XP-80 in only 143 days, which was seven day before the due day for delivery to ATSC.
The operational was guided by Intrapreneurship principles and “out of the box” unconventional thinking which both combined to enabled Johnson and his Skunk Works team to create and operate effectively and efficiently. While Kelly threw out the Standard Operating Manual, he broke the rules, and actively challenged the corporate bureaucracy. Intrapreneur Johnson and his Skunk Works group regularly “did their own thing” because the old traditional system only slowed them down, cost time and money, and it stifled innovation.
Kelly Johnson, over 60 years ago, came to several important conclusions and overriding suggestions to intrapreneurs within his Lockheed Skunk Works group, but they are also important to every Intrapreneurship venture:
“Reducing the time to evaluation of a system almost always leads to lower costs, greater flexibility for change, improved overall performance, and less risk.”
“When the prototype approach for system development is used, ultimate production of the system must be considered throughout the design and evaluation phase.”
80 in only 143 days, which was seven day before the due day for delivery to ATSC.
The operational was guided by Skunk Work Employee Rules and principles and “out of the box” unconventional thinking which both combined to enabled Johnson and his Skunk Works team to create and operate effectively and efficiently. While Kelly Johnson literally threw out the Standard Operating Manual, he broke the all rules, and actively challenged the entire Lockheed corporate bureaucracy.
Intrapreneur Johnson and his Skunk Works group regularly “did their own thing” because the old traditional system only slowed them down, cost time and money, and it stifled innovation.
Kelly Johnson firmly believed in these basis truths:
“Reducing the time to evaluation of a system almost always leads to lower costs, greater flexibility for change, improved overall performance, and less risk. . . When the prototype approach for system development is used, ultimate production of the system must be considered throughout the design and evaluation phase.”
Kelly Johnson, 70 years ago, came to several important conclusions and overriding rules for the employees within his Lockheed Skunk Works group. Many of these 14 rules are still important to Intrapreneurship venture in the future.
The underlying foundation of the entire secret Skunk Works operation is contained in their stated official Mantra, “quick, quiet and quality.” Kelly Johnson insisted upon his famous 14 Skunk Work Rules for all Skunk Works employees:
1. 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.
2. Strong but small project offices must be provided both by the military and industry.
3. 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).
4. A very simple drawing and drawing release system with great flexibility for making changes must be provided.
5. There must be a minimum number of reports required, but important work must be recorded thoroughly.
6. 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.
7. 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.
8. 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.
9. 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.
10. 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.
11. Funding a program must be timely so that the contractor doesn’t have to keep running to the bank to support government projects.
12. 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.
13. Access by outsiders to the project and its personnel must be strictly controlled by appropriate security measures.
14. 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 homage and gratitude for the forward “out of the box” intrapreneurship spirit that Kelly Johnson exhibited and foster at Skunk Works long before the term “Intrapreneurship” was ever thought of over thirty years later.
Copyright (C) 1982-2014, Intrapreneurship Institute and Dr. Howard Edward Haller
Contact info for Dr. Howard Haller and the Intrapreneurship Institute:
To book Dr. Howard Edward Haller to deliver a custom Keynote Speech or insightful Executive Briefing on Intrapreneurship, Intrapreneurship Program Creation or Increasing Innovation, Creativity or Product Creation:
Please call Dr. Haller directly at: 509 465-9300,
or email: DrHaller@IntrapreneurshipInstitute.com
or visit the Contact Section on our website: Contact Dr. Haller and The Intrapreneurship Institute
Howard Edward Haller, Ph.D. is Professional Keynote Speaker on Intrapreneurship, Corporate Entrepreneurship, Intrapreneurship Program Creation, Using Intrapreneurship programs as a strategic tool for Recruiting and Retaining Key Employees, and Using Intrapreneurship to Increase Innovation and Foster Creativity.
Dr. Howard Edward Haller is a “street smart” serial Intrapreneur and Entrepreneur, and is the Leading Expert and Thought Leader on Intrapreneurship, Intrapreneurship Program Creation, Intrapreneurship Program Implementation & Operation, and Entrepreneurship.
Dr. Haller is also a University Graduate Business School Professor, major University Trustee (Emeritus), and past University Board President, as well as a seasoned Senior Corporate Executive of major public and private companies. Haller was the Founder and Managing Director of Anaconda-Ericsson Finance and Leasing Inc.(for Anaconda-Ericsson Inc., the ARCO & LM Ericsson Joint Venture) Dr. Haller was Senior Vice President of United Artist/Tele-Communications Inc., where he managed assets in excess of $4 Billion.
Howard Edward Haller’s groundbreaking 1982 University published academic research on intrapreneurship is cited by Wikipedia.org in their “History of Intrapreneurship” entry. In addition, Dr. Haller’s 2009 published intrapreneurship book “Intrapreneurship Success: A PR1ME Example” is also cited by Wikipedia.org in their “History of Intrapreneurship.”
Book Dr. Howard Edward Haller to speak or consult with your entire firm or your senior executive on Intrapreneurship, Corporate Entrepreneurship , Intrapreneurship Program Creation or Increasing Innovation with your company.