I read an article today about Why Corporate Skunkworks Need To Die. The article was published last month in Forbes and it was written by Steve Blanks.

While I totally understand the premise of continuous innovation that +steve blank makes, I believe that he has missed the fact that in some cases, you just can't get there from here.

In fact, for some companies/industries, I believe that a skunkworks may be your only hope.

I made a comment on his article that in the travel industry where I have spent my last 35 years, I have seen companies try to innovate from within. With few exceptions, most skunkworks quite frankly, don't work, or they focus on products that support just their existing core focus, leaving true innovation beyond their grasp. Other companies simply rely on acquisition to fill out their product suite.

In almost every case the major players in the travel industry are just taking their existing products, focused on the air traveler, and tweaking them. [I would love for someone to prove me wrong on this point.]

Yes, we've finally started doing a good job with mobile and knitting in location based services. Uber and HomeAway and airbnb have given us some new options, but they are still focused on those that "magically" land in a given destination.

We've gotten smarter about everything that touches the air traveler, from the time that they leave their homes to the time that they arrive at their destination, as long as that destination is an airport or a city center.

Bravo. That is until you realize that this particular market segment makes up just 13% of all overnight trips in the US. Yikes. What about the other 87%? We have summarily ignored them.
If your destination is much further away from the city or the airport, or God forbid, you need to drive to more than one destination, all of the sudden, booking travel gets hard.

I've been talking about this for nearly a decade now and am still amazed that there has been no movement on this front. I will give the major players in my industry the benefit of the doubt. I've spoken to many of you about this and even invested time in helping some of you to understand the opportunity.

Some of you are public or owned by private equity (or even by VCs) and are caught up in the quarter by quarter pressure for profitability. Or you are not given sufficient time to allow an idea to germinate and or you are not given enough resources to allow the idea to sprout into a full fledged, profitable business. I know. It is sad. Or if there is excess cash on the balance sheet, acquisition can be a tempting solution.

The challenge is that those companies that make it on an acquisition target list generally have already turned an idea into a business and quite often their products and services only provide incremental improvement to a core product line.

The real mischief is that if you are focused on your product rather than your customer, you may miss an important product or service trend.

Take a look at Weight Watchers. They have been focused on their core product - their eating/tracking product, coupled with their meetings and their online platform and tools. They completely missed the "wearable" fitness device trend and their customer base is down by 15% as a result. I believe they have also missed the opportunity to do remote meetings using online meeting technology, such as Google Hangouts, or even just plain old conference calling for a weekly meeting with busy executives that don't have time to get away for a meeting. Or how about a weekly "walk!".

The other innovation mischief is that there are many innovators still out there who have created amazing products and services, but they do not have proper funding to take their ideas to market. Those firms may not be able to attract capital and they definitely don't make it onto the acquisition list. I think that this is a mistake and these firms could provide significant acceleration to firms that want to differentiate, particularly in a commodity world.

Perhaps there is compromise to Blank's premise.

I believe that a skunkworks can be used not only to foster innovations and build new businesses, but properly run, they can create a model for organizations to infuse consistent, integrated innovation into the mother ship.

Through an integrated, strategic planning process focused on execution and integration, the fully built product or fully defined service can then become a part of the more mature parent organization. The learning, both good and bad, can be shared with the core organization and of course, all along, the parent would be providing guidance and insight, as well as funding to the skunkworks.

I believe that this is a viable model to launch totally new products, models, markets or even new ways of organizing or leading.

What if there were an organization willing to run the skunkworks and even do it as a joint venture, with a vested interest in its success. And just maybe, that firm has a bit of technology that could make a real difference in the landscape of one or more industries.

As always, I'm willing to put my money where my mouth is. Anyone game to turn the travel industry on its head?

Stay tuned. Skunkworks Solutionz™ may be around the corner.....


Chicke FitzgeraldChief Mischief Officer