Skunknets:

Skunkworks as Distributed Networks

by Jessica Lipnack and Jeffrey Stamps
The Seybold Series #3 - August, 1989

Perhaps the best known model for innovation, "skunkworks" came to prominence in the 1980s through two of the decade's best sellers: Peters' and Waterman's chart-topper, which also made "excellence" a keyword in the business vocabulary, and Tracy Kidder's The Soul of a New Machine.

In Kidder's book, technology is the main character, and it is conceived and born in a skunkworks. According to In Search of Excellence, "a classic skunkworks consists at any one time of eight to ten people...located in a dingy second-floor loft six miles from corporate headquarters."

Ten years ago this was an accurate description of how development work was done. Today, however, a different model for innovation is possible because of computer networks. Instead of one "second-floor loft six miles from headquarters," now companies have many such operations, linked by communications. Skunknets are the new distributed work dynamos.

Clipper: World-class Product, Record Revenues

One such example is a highly successful technology development project, carried out in the new mode: globally distributed groups linked by numerous media working on the same project, code named "Clipper."

A worldwide project, Clipper produced a world-class product built at a low cost in record time with record revenues.

In just 15 months, a core group involved 45 people in more than a dozen locations with several thousand more participating indirectly. Within ten weeks of the product announcement, 1000 machines were builtóand shippedófrom three locations separated by an ocean.

"People who worked on this project say they will never forget it," says the project manager.

How did they do it? For those who believe high performance can only come from people packed together in one place, Clipper is an excellent example of how exceptional work is done in a distributed environment, in a network.

Clipper successfully integrated both organizational and technology networks. Each node in the network had multiple links to the others, held together by clear shared purpose.

This is a network that worked.

The Nodes Know

The project was distributed in two important ways. First, it was developed with the participation of design, engineering, manufacturing, shipping, marketing and sales functions. Second, it involved multiple interdependent sites.

Seven company locationófour in the U.S., two in the Caribbean, and one in Europeóprovided the inner circle of the project. Four secondary manufacturing plants included three in the U.S. and one in Canada. Yet another U.S. location kicked in computing resources at-a-distance at a critical point in the project. Finally, two external organizationsóa key vendor on the west coast and a key licensee on the eastóbrought the number of nodes in the network to 14.

Clipper Links

With people scattered across tens of thousands of miles, how did they possibly achieve success? The answer is simple: They communicated. Extensively. Using many media.

First of all, they had a regular schedule of face-to-face meetings, an important lesson for those who believe that online communication replaces "the real thing." The project manager expressed this well when she said, "You don't build trust over the wire. That takes flesh-and-blood" but it doesn't have to take a long time to make it happen."

The entire project team of 45 met monthly ("The only excuse for not coming was if your mother died") and the four team leaders who formed the project management group met weekly ("But we checked this weekly; if we didn't need to meet, we didn't"). In between, people traveled ("There are a lot of project miles on these people").

Everyone used electronic mail ("Key people have to commit to read mail in real-time). Computer conferencing was used to work out technical problems. ("Engineers don't talk. They type.")

But of course they do talk, and telephone was used extensively, even more so after a separate satellite dish was installed in the Caribbean so that locations there could bypass their local already stressed communications system.

On Purpose

Nodes and links alone do not a network make. A network needs purpose, the glue that bind, and Clipper's was clear: build a break-through computer by leveraging existing technology to fit a clear market opportunity.

Easy enough to say. But for a distributed group to work effectively, especially on a complex project, everyone needs to share the same model of its work.

Clipper accomplished this by creating a common design database that helped bridge the traditional "throw it over the wall" mentality that separates engineering and manufacturing. Eliminating the stale paper problem, the database enabled manufacturing to cut its engineering response time from weeks and months to a matter of hours. Distribution lists were built into the mail system such that the "right" people received the "right" information "right away." ("With paper, you could never be sure that what you were working on was current.")

The database also enabled the key licensee to do a simultaneous release of a different version of the productóthe first of its kind as well. ("We had fewer meetings than we expected. Mostly what we did was ship them data.")

Many Leaders

For a project with multiple centers, multiple leadership is the only answer. In this regard, Clipper excelled. Each of the four project managers had two reporting relationships: an indirect one to the overall project manager, and a direct one to their local site managers. Each of the remaining sites followed a similar pattern, with the local manager reporting into the site as well as reporting of one of the four project managers.

In some locations, new reporting relationships were established, acknowledging the importance of the project. One manager in a manufacturing plant, for example, was elevated to a position on the plant manager's staff, a role that is usually buried several levels down in the organization. Such reorganization proved critical in meeting deadlines, since signature loops and approval times were thus substantially shortened. ("Everything came down to the schedule. When we needed to make up time, we did more things in parallel.")

Benefits of the Clipper Model

Clipper's report card tells the story. Clipper met its cost, time and revenue goals. Indeed, it exceeded them. Just a fraction of the first quarter's earnings paid back the development costs, as revenues continued to rise.

But those were not the only benefits. The distributed project team leadership was able to innovate in a way that could not have been done if everything had been under central control.

When a bottleneck developed in the shipment to the Caribbean of the sheet-metal boxes that housed the computer, the local project leader, who knew the other business people on the island, cut a deal with the local overnight delivery service. "Headquarters," thousands of miles away, would never have known about this option.

In the same way, immeasurable time was saved by being able to start up the project without having to move a single person or disrupt a single family. The project was off the mark instantly.

"A project like this gets momentum and there's no stopping it," the project manager concludes. "There's a point where the product becomes perceived as successful [and] it gets really exciting...This product had lots of synergy."