Should You Launch a Skunk Works?

If you’re working in a highly competitive marketplace, the only hope you have of gaining a meaningful, long-term advantage over your competitors is by innovating. You can’t do it just once and expect to succeed. Instead, you have to build a company that loves to innovate.

Before you invest in a new R&D department and hire a staff to start your innovation engine, consider starting small.

Maybe it’s time to start a Skunk Works in your company.

Not as Smelly as it Sounds

The term “Skunk Works” traces back to the 1940s and the visionary project teams at Lockheed Martin, led by legendary engineer Clarence “Kelly” Johnson. 

During World War II, the U.S. military needed a high-performance jet fighter to counter the emerging threats from Axis powers. Johnson’s team, working in an unassuming hangar and isolated from the usual bureaucratic channels, designed and built the XP-80 jet prototype in a record 143 days. 

This unconventional, agile approach broke away from traditional corporate norms, focusing on speed, innovation, and direct problem-solving. It gave us a new way to look at corporate innovation.

But why name it after one of the less beloved forest animals?

The name “Skunk Works” was inspired by a cartoon factory in the popular comic strip Li’l Abner, a nod to the off-the-grid and informal nature of Johnson’s operation. It represented an outlier approach—a space where the usual rules didn’t apply, and innovation could thrive without red tape.

The Principles of Skunk Works

What made Skunk Works so revolutionary was its deviation from standard corporate practices. The core principles behind successful Skunk Works initiatives typically include:

Small, Autonomous Teams 

Skunk Works projects are typically carried out by small groups of highly skilled, multi-disciplinary team members who have the freedom to make quick decisions.

Minimal Bureaucracy

Bureaucratic processes are minimized or eliminated to speed up development and focus purely on problem-solving.

Top Secret

Secrecy and security are often key components, allowing the team to experiment without external scrutiny or pressure.

Single Visionary Leadership

Projects often have a single leader with a clear vision and the authority to make swift decisions.

This approach allowed Lockheed Martin to produce some of the most iconic aircraft in history, including the U-2 spy plane, the SR-71 Blackbird, and the F-117 Nighthawk. The success of these projects demonstrated that the Skunk Works model was more than a novel idea—it was a game-changer.

But how can a unit like this change your business?

Skunk Works in Modern Business

Today, the Skunk Works concept has evolved far beyond its aerospace roots. Companies across industries are implementing their own versions of Skunk Works to foster innovation and stay ahead of the curve. 

Here are a few notable examples:

Google’s X (The Moonshot Factory)

Google established “X,” an innovation lab often referred to as its own Skunk Works division. The lab focuses on ambitious projects like self-driving cars (Waymo), balloon-powered internet (Project Loon), and renewable energy kites. X operates independently of the main Google business units, embodying the principles of rapid prototyping, secrecy, and minimal oversight.

Apple’s Special Projects Group

Apple’s reputation for secrecy is legendary, and much of its groundbreaking innovation is driven by small, isolated teams. The Apple Watch, for instance, was developed by a small group that operated separately from the rest of the company. More recently, Apple’s focus on augmented reality (AR) and virtual reality (VR) devices is being led by a highly confidential team, often referred to as Apple’s “Special Projects Group.”

Amazon’s Lab126

Known for developing hardware products like the Kindle and Echo, Lab126 functions as Amazon’s internal Skunk Works. This unit operates with a high level of autonomy, allowing engineers and designers to work on “big bets” that could disrupt entire markets. The development of Amazon’s Alexa voice assistant is a prime example of the success that can stem from this approach.

The Decline and Reinvention of Skunk Works

Despite its historic successes, the Skunk Works model has faced challenges in recent years. You may have noticed that current proponents seem to be clustered in the big tech space.

The increasing complexity of technology, along with the rise of open innovation and collaborative platforms, has made it harder for isolated units to work effectively. Moreover, the secretive nature of Skunk Works projects can clash with today’s emphasis on transparency and stakeholder engagement.

However, rather than disappearing, Skunk Works-style initiatives are evolving. Many companies are now blending the principles of Skunk Works with more open and agile frameworks, creating hybrid models that allow for both deep secrecy and collaboration when needed. 

The modern equivalents often use internal incubators or accelerators, where teams have the freedom to innovate but also have access to broader company resources and knowledge. Six Sigma and Design Thinking are finding new uses in these groups. 

By empowering small, nimble teams to tackle big challenges without the constraints of traditional corporate structures, the concept has enabled breakthroughs that might not have been possible otherwise.

In today’s fast-paced market, where the pressure to innovate is higher than ever, the spirit of Skunk Works is alive and well—albeit in new forms adapted to the current environment. 

Getting Started with Your Own Special Project

Over the years, I have been involved in a number of projects in our industry. Some have been complex collaborations that resulted in new alliances or integrations. Others have related to startup planning and positioning in a crowded marketplace.

Starting a Skunk Works as a solution for continuous innovation is a slightly different exercise, but it benefits from the same facilitation that I have offered in the past.

RGA is now offering a Skunk Works planning workshop, available in half-day, full-day, and two-day formats. The program allows management to pull together a cross-disciplinary team to scope out, organize, and launch a company Skunk Works operation. If you want to learn more, reach out to me anytime.

Whether through corporate innovation labs, internal accelerators, or stealth projects, the underlying principles of Skunk Works continue to inspire businesses aiming to achieve the extraordinary.