Making Elephants Dance

It may not be ironic that on May Day 1960 there was a call for ‘Mayday’ (though the words have no etymological connection). Gary Powers was on a 3700-mile-long flight from Peshawar, Pakistan to Bodo, Norway. En route, he would take pictures of Tyuratam, the Russian missile test center in the Urals as well as the military industrial complex at Sverdlovsk. As the U-2 approached Sverdlovsk, a battery of SA-2 missiles greeted it. Shockwaves from the exploding missiles that hit a MiG chasing it took the U-2’s tail off. When President Eisenhower denied spy flights, Gen. Secretary Khrushchev produced pictures of the downed plane and confessions of the surviving pilot. That…was embarrassing!

Did this mean you shelve future flights and the opportunity to have pictures taken from 72,000 feet high, showing a worker reading a newspaper in an outdoor toilet?? Two years later, the Skunkworks at Lockheed had a test flight for a successor – the SR-71 Blackbird could fly at 85,000 feet and holds the speed record to this day.

Why was it that when Lockheed created a plane that could fly at altitudes of 70K feet, the best that others around the planet could do was shoot surface-to-air missiles (SAMs) and even have MiGs fly straight up at top speed, mostly to flame out a few thousand feet below?

In the realm of aerospace engineering, where innovation can be hampered by bureaucracy and convention, Skunk Works, Lockheed Martin's renowned innovation division, stood out as a beacon of agility and creativity. And Ben Rich, its President draws the curtain back for us, in his fascinating memoir Skunk Works. With a track record of turning ambitious concepts into reality, Skunk Works earned its reputation as the 'Innovation House' within Lockheed (then not yet merged with Martin Marietta) and the wider aerospace industry.

The Product Development Cycle

Skunk Works operates on a different wavelength compared to traditional aerospace development cycles. While it took 8-10 years for a single project to move from concept to operation at Lockheed – often the stifling effects of bureaucracy reduced the output to a mere one airplane over an employee's entire career - Skunk Works managed to roll out an impressive 27 airplanes within its first 40 years. How did this happen? And what lessons are there for us?

Streamlined Decision Making

One of the secrets to Skunk Works' success lies in its streamlined decision-making process. Unlike the labyrinthine approval structures typical of government projects, Skunk Works projects required sign-off from only a handful of decision-makers. For projects like the SR-71 Blackbird and the Stealth Fighter (F117A), approvals came from a select few in the Air Force - 2, Pentagon - 3, and Capitol Hill – 4 (8 for the Stealth Fighter), minimizing red tape and accelerating project timelines.

Paperwork – Difference Between Mothership & Satellite

A Lockheed Purchase Order was 185 pages, and a proposal from a vendor – 1,200. There were 3 volumes on technical factors, costs, management, etc. A Skunk Works PO was 3 pages long, and the proposals they received from vendors had 4! This included specs. It supplied only critical documents. Everything else was eliminated.

In the RFP process, there was a specific but simple overarching requirement. In the case of the SR-71, it was ‘Spy plane flying at 85,000 feet with a range of 6,000 miles.’ They challenged the requirement for a plane to fly 20,000 hours and the stresses of a thousand landings. Why…when they are deployed for but a few hundred hours in a battle? So a few aircrafts could be made to last years for training flights, but the majority for combat were to be made for relatively shorter periods and with less expensive materials. Instead of incurring the expense of developing tires that can withstand that many landings, they showed they could save money if they mass-produced these to last only 10!

Efficient Resource Allocation

While the Air Force had 200 and 600 personnel respectively, taking care of two U-2, and SR-71 Blackbirds, Skunk Works had only 12 and 35 personnel to do so. While military personnel are rotated every three years due to which valuable experience is lost, Skunk Works cross-trains, and ensures that a lean team can effectively maintain a fleet of advanced aircrafts.

Wastage

But Uncle Sam gets you one way or the other, as the Air Force has a say with vendors. GE’s jet engine plant had 300 Air Force Inspectors - dramatically slowing production and escalating cost. Commercial airlines have 0 outside Inspectors and rely on GE’s warranty, where they will pay for replacement costs, repairs & lost time, and a penalty to boot. Therefore, GE sells to commercial airlines at 20% lesser than it does to the Air Force.

In 1964 President Johnson accidentally announced the RS-71 as the SR-71. The Air Force decided to go with the mistake, and it resulted in costs for updating 29,000 documents. The Air Force also demanded its insignia on the fuselage and wings. This was done at a very high cost for something that no one will see at 85,000 ft, only for them to then decide white paint was too easy to spot, and so to paint it pink!

Innovation Through Collaboration: The F-117A Stealth Fighter

The F-117A Stealth Fighter serves as a prime example of Skunk Works' innovative prowess. By adapting off-the-shelf avionics – a killer expense at $7K per pound - incorporating flight controls from the F-16, and leveraging engines from the F-18 (McDonnell Douglas), Skunk Works managed to create a cutting-edge aircraft at a fraction of the cost and time typically associated with such projects.

The Ford Connection: Team Mustang

In 1990, Ford's "Team Mustang" took a page from Skunk Works' playbook to re-fashion its iconic car. By minimizing management interference, the team delivered a groundbreaking vehicle in just three years and $700M, which was 25% less time, and 30% less cost - setting a new standard for efficiency and innovation. Normal development costs of $1B were prohibitively expensive. It went on to become MotorTrend’s Car of the Year 1994 and one of Ford’s hottest sellers.

Going back to 1960, Air Force Chief of Staff Gen. Nathan Twining had warned CIA Director Allen Dulles that the U-2 flight was mimicking the same route to Sverdlovsk as in the prior month. “Allen they’ll … be lying in wait. You’ll get nailed.” Dulles chose to ignore this. Leaders, build judgment to know what is wasteful, and when to listen to opposing voices.

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