The efforts to implement an innovation program at Accipiter have been hampered by excessive cost-cutting pressure and too little appetite for change. Can Marlow and his ally in the company successfully implement a skunkworks to turn things around?

In for dime, in for a dollar I always say.

“Tell me more about your skunkworks idea.  What makes you think a skunkworks will appeal more than any other innovation effort?”

“I don’t know that it’s more appealing” she said.  “I just think if we can create an innovation program that allows us to move forward, create some new products or services and demonstrate we can create something compelling, then the rest of the organization will get behind it.  Plus a skunkworks doesn’t interfere with our existing lines of business or the people running those businesses.  There’s just too much cost cutting pressure and too little appetite for change.”

“Sounds familiar.  Many of the firms we work with have the same cultural challenges.”

“But I feel the need to demonstrate some value.  Bill Thompson recruited me and asked me to work directly with him to build an innovation capability.  I’ve been in this role for almost eight months and we’ve done nothing but talk about innovation.  I’m losing time and credibility, and there are few options beyond starting up a skunkworks at this point.  Fred’s off looking at more cost cutting, and most of the other product group heads want to innovate but don’t have the budget or manpower.  If I can’t produce something – some idea, some method to break this logjam, I will have to find a new job in Accipiter or somewhere else.  And I have to tell you, the perspective I’ve gained in this innovation role has led me to believe it will need to be elsewhere if we can’t get something started soon.”

Pirate flag more like walking the plank handcuffed together.  But I had great sympathy for her, having been in her predicament several times, except as a consultant.  Oftentimes it was easy to see the opportunities but hard to make the commitments necessary to grasp them.  As a consultant, I could walk away and find another firm more committed to change.  As an employee, who’d committed years of her life to Accipiter, leaving would mean starting new in some other organization.  Staying would mean going back to another job, tail tucked between her legs, the silly ‘innovator’ who should have been back doing the real work.  Rather than tuck her tail, she was going out, guns blazing, Gary Cooper at the OK Corral.  Now that, I could support.  The romantic in me was about to emerge.

“OK, I understand the need to do something.  Believe me, I’d like to see Accipiter do something.  The question in front of us is:  can you get Thompson to agree to a skunkworks and provide the resources quickly?  Will he need to get the rest of the management team on board, or can he do it himself?”

“That’s why I needed to speak with you.  I need to build a compelling case for the skunkworks, define the costs and resources necessary and identify some possible outcomes.  I think Bill is frustrated as well, but he can’t force the product groups to innovate.  A skunkworks allows us to set up our own team, outside the structure and pressure of the organization, to generate ideas and develop them.  I think we can move much more quickly that way.”

“Yes, you can.  We’ve done things like this before.  The definition and generation of ideas won’t be difficult.  You’ll need a very well defined opportunity to address or problem to solve, and the hard part will be implementing the idea.  If you don’t have the product groups behind you, it’s very possible that you’ll generate good ideas but won’t find a home for them in the organization.  The product groups may snub even very good ideas if they weren’t involved in the development, and you’ll have to find funding for your ideas just like they do – in the annual plan.  You’ll compete with them for resources.  Are you willing to take that risk, or to develop and launch a new product outside of the existing product lines?”

“I’ve considered the issue.  I don’t know how we’ll develop and launch ideas out of the skunkworks, but I am willing to get started and see where this takes us.  I think I can get Bill on board with that approach if we hold the costs down and demonstrate real value quickly.  Will you help me put some cost estimates together for the skunkworks?”

When your neck is in the noose, do you educate the hangman on the appropriate knots to use?  The tradeoff was this – if the skunkwork was successful, Marlowe would get a lot of accolades and more business from Thompson and Johansen, and none from the rest of the organization.  If the skunkwork failed, we get no business from Accipiter anyway, and it didn’t appear as though the calcified decision making process at Accipiter was going to break up anytime soon.  So, in balance, I didn’t have much to lose.

“OK” I said “with a couple of conditions.  First, we need to confirm with Bill that he’ll look at our proposal.  There’s no need to do this work if he won’t agree to look at the proposal.”

“Done” she said.

“Second, you and I have to trust each other and communicate effectively.  To date, talking with Accipiter has been a completely one-way activity.  I’m talking and no one is responding.  If I agree to do this with you, we agree to interact daily, promptly respond to emails and voicemails, and to talk regularly.”

“Sam, I can’t do this without your expertise, and I wasn’t able to communicate with you since I didn’t know the decisions or how things were progressing.  I promise you that I’ll communicate with you.”

“OK.  Third, if we build this and the proposal is accepted, you’ll work with Marlowe Innovation to implement the skunkworks.”

“I’ll do my best to influence the decision.  You know that Bill will ultimately make the final decisions.”

“I’ll hold you to your word.”

“Any other conditions?”

“Yes.  You and Bill will find funds to pay for the development of the skunkworks proposal.  I think it’s important for Bill to commit to paying Marlow for our knowledge and experience.  It doesn’t have to be a large amount of money, let’s say $10,000, but even a token demonstrates a willingness to do business.”

“I’ll see what I can do.  Anything else?”

I was sure there should be, but I couldn’t think of any at that point.

“No.  Let’s get started.”

“OK, what’s it going to take to build a skunkworks here at Accipiter?”

That’s what we were going to find out.

About the author:

Jeffrey PhillipsJeffrey Phillips is VP Marketing and a lead consultant for OVO Innovation. Jeffrey has led innovation projects for Fortune 5000 firms, academic institutions and not-for=profits based on OVO Innovation’s Innovate on Purpose™ methodology. The Innovate on Purpose methodology encourages organizations to consider innovation as a sustainable, repeatable business process, rather than a discrete project.

Jeffrey is the author of “Make Us More Innovative,” a book that encompasses much of the OVO Innovation methodology, and blogs about innovation at Innovate On Purpose. He is a sought after speaker and has presented to corporations, innovation oriented conferences, and at a number of universities. In 2010 he chaired the Innovate North Carolina conference and was a keynote speaker at Queen’s University, University of the Pacific, UNC and several other colleges and conferences. Jeffrey has an MBA from the University of Texas at Austin and an undergraduate degree in engineering from the University of Virginia.