The interplay of product and process in skunkworks identity work: An inductive model

• Author: David Oliver,Benjamin M. Cole
• DOI: http://doi.org/10.1002/smj.3034
• Published date: 01 September 2019
• Date: 01 September 2019

RESEARCH ARTICLE

The interplay of product and process in skunkworks

identity work: An inductive model

David Oliver

1

| Benjamin M. Cole

2

1

University of Sydney Business School,

University of Sydney, Sydney, New South

Wales, Australia

2

Strategy & Statistics Area, Gabelli School

of Business, Fordham University,

New York, New York

Correspondence

David Oliver, Discipline of Strategy,

Innovation and Entrepreneurship,

University of Sydney Business School,

Abercrombie Building H70, University of

Sydney, NSW 2006, Australia.

Email: david.oliver@sydney.edu.au

Funding information

Fonds de Recherche du Québec-Société et

Culture, Grant/Award Number: 2009-NP-

126107

Research Summary:The success of skunkworks often

involves nurturing an identity at odds with the parent firm,

which may cause de-identification with the firm and

hamper reintegration of team members post-project. This

identity work could lead to market success but organiza-

tional failure as skunkworks' members distance themselves

from the parent firm tasking the innovation. To explore the

when and how of identity work throughout a skunkworks'

lifecycle, we studied a skunkworks at an international con-

sumer products company over a 35-month research win-

dow and through post-hoc interviews some 15 years later.

Using a grounded theory approach, we documented the

interplay between product (needs) and process (decisions)

over the skunkworks' lifecycle, and constructed an induc-

tive model providing important insight to the micro-

foundations of the identity-based view of competitive

advantage.

Managerial Summary:This study examines how identity

work unfolds over time in a skunkworks team created to

spur breakthrough innovation. Such teams can develop a

strong sense of identity that may in part involve opposition

to the parent firm. While this can motivate the team to gal-

vanize around the task at hand, such “othering”may cause

de-identification with the parent and hamper reintegration

of team members after the skunkworks is dissolved. Thus,

identity work within a skunkworks can lead to both mar-

ket success and organizational failure. We ground our

model in a 35-month study of an international consumer

products company, documenting the interplay between

Received: 21 January 2015 Revised: 19 March 2019 Accepted: 26 March 2019 Published on: 22 April 2019

DOI: 10.1002/smj.3034

Strat Mgmt J. 2019;40:1491–1514. wileyonlinelibrary.com/journal/smj © 2019 John Wiley & Sons, Ltd. 1491

product (needs) and process (decisions) over the

skunkworks' lifecycle. We provide prescriptions as to how

to mitigate the possibility of these negative outcomes.

KEYWORDS

identity, innovation, micro-foundations, new product development,

skunkworks

1|INTRODUCTION

Ever since Lockheed Aerospace Corp. formed the world's first skunkworks

1

project team in 1943 to

design and build the XP-80 aircraft with 28 engineers in 143 days, managers have explored the bene-

fits of segregating new product development (NPD) teams to create innovations unhindered by firm

bureaucracy. Freed from constraining organizational routines, norms, and culture, such teams operate

more quickly and flexibly than hierarchical efforts. NPD teams are often cross-functional

(Edmondson & Nembhard, 2009) and are used to enhance competitiveness (Kirkman & Shapiro,

2001) and shorten development times (Eisenhardt & Tabrizi, 1995).

Despite these advantages, NPD teams face many challenges, as both internal and external factors

affect whether the team can fully integrate member heterogeneity (Kyriazis, Couchman, & Johnson,

2012). Teams can avoid some of the pitfalls of a functional-based view of activities by forming a

“superordinate”(Sethi, 2000) or “team”(Lembke & Wilson, 1998) identity, which can help them

unify around tasks (Brockman, Rawlston, Jones, & Halstead, 2010) and stimulate effort while reduc-

ing shirking (Eckel & Grossman, 2005). Because they are often physically and cognitively seques-

tered from the parent and hold authority within the skunkworks itself (Hackman, 2002), team

identity work is often obscured from outsiders. This can lead to problems, as most skunkworks are

structured to be short-term injections of innovation rather than permanent entities. If the skunkwo rks

identity grows too distinct from that of the parent, it may become challenging for the parent to dis-

band the team and reintegrate the members back.

We explore these dynamics using a “dual-clock”approach, involving a 35-month study of a

global consumer products firm that formed a cross-functional skunkworks to innovate in the technol-

ogy sector, combined with post-hoc interviews with skunkworks' members years later. Using

grounded theory, we construct an inductive model of identity work in skunkworks linked to the fate

of the product being developed. At formation, when innovation at the parent had slowed, the team

engaged in three types of orienting identity work—idealizing the parent's past, critiquing the parent's

present, and ideating the parent's future. When product development showed promise, the team

engaged in solidifying identity work—affirming the “correctness”of the team's path by reinforcing

the identity claims (i.e., fast, flat and open) that distinguished it from the parent. This identity work

also involved projecting the team as a threat to the parent, strong “othering”of the parent, and desir-

ing to “help”the parent reclaim its roots. Later, when the product development efforts were chal-

lenged, the team engaged in reconfiguring work, becoming more hierarchical (like the parent),

focusing on team motivation and viewing the team as a distinct organization. Finally, at the

1

Due to its historical roots as a walled-off group at Lockheed Aerospace (today: Lockheed Martin), skunkworks broadly refers

to a team isolated from the corporate bureaucracy for the purposes of facilitating either process innovation or product

innovation (with the latter often referred to as a New Product Development (NPD) team).

1492 OLIVER AND COLE