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Running Head: INNOVATION
8-2 Benchmark Study: Skunk Works
MBA 580
An organization can play a pivotal role to support and nurture innovation. In the report,
an in-depth comparison between the organizational structure and innovative structure of the
luxurious automobile company and Skunk Works has been presented. The objective is to identify
the methods that could be adopted for improving the firm’s organizational structure and culture
to support innovation.
Organizational Structure
The organizational structure of the automobile business is highly complex as there exist
several levels of hierarchy. The tall matrixed structure design is adopted in the business entity,
which makes it difficult to have an accurate count of the exact number of hierarchy levels. Tall
structures are considered to be cumbersome as they increase the gap between the decision-
makers and the customers. In the case of the Skunk Works organization, there did not exist any
hierarchy in the organizational structure. Small teams were responsible for carrying out their
respective roles and responsibilities in the organizational setting. There is a major contrast
between the structure of both the firms. In the automobile business, the tall structure increases
the complexity by restricting communication and collaboration and thus hinders innovation. The
flat structure in Skunk Works acts as a major factor that boosts the level of innovative and
creative ideas.
Shared Vision
Shared vision can be defined as the common and clear image pertaining to the intended
future state that the personnel of a company can identify with. It acts as the chief component that
binds all the members together and enables them to work cohesively (Hoe, 2007). In the
luxurious automobile company, there is the absence of a shared vision. The existence of diverse
functional areas such as engineering, strategy, safety, etc., does not enable the members to focus
on a single aspect. In fact, there are occasions in which employees might work on separate
projects simultaneously and report to different managers. In Skunk Works, a shared vision acts
as a catalyst and pushes the employees to help the organization move towards its desired goals
and objectives. Uniform principles are followed by the employees, which help them to
proactively contribute to business growth and performance. A shared vision can drive all the
members towards innovation and creativity.
Creative Climate
The creative climate in the business setting can be defined as the microenvironment in
which new kinds of ideas are generated as well as nurtured. In order to think in a unique way, the
existence of such an environment is considered a fundamental necessity (Dubina, 2013). In the
automobile company. There does not exist a creative climate. As the company adopts a
centralized and standardized approach, all the decisions are made at the enterprise-wide level.
Thus, there is little room for the personnel to think innovatively and creatively while working in
the organization. The rigid approach makes it difficult for different segments of the organization
to act in an independent manner and capitalize on specialization. In Skunk Works, a creative
climate exists which fosters creative ideas and innovation. The teams get the opportunity to
achieve the creative feat by carrying out their respective roles and responsibilities in a different
mode as compared to that of the overall organization. The employees get the opportunity to
challenge the existing principles and take a new path while working. The existence of a creative
climate is considered to be a fundamental necessity that can facilitate and promote innovation in
an organizational setting.
Effectiveness of Teamwork
In the organizational setting, teamwork is seen as an important variable that makes every
member accountable. Instead of working at an individual level, they work in groups or teams and
contribute towards the team goals and objectives. In the automobile business, there does not exist
any permanent cross-functional teams that work on specific projects. The organization pulls
teams together from diverse functional departments to work on projects. In Skunk Works, teams
play an integral role and help the organization to accomplish its goals and objectives. The
necessary tasks are allocated to small teams that are responsible for accomplishing the intended
goals and objectives. The team members are given autonomy while working on a project which
enables them to explore their creative side. The effectiveness of teamwork plays a cardinal role
in the Skunk Works organization and drives its innovation. On the other hand, the poor
effectiveness of teamwork creates a major gap and restricts the members to take advantage of
their specialization and think in a creative and innovative manner.
The thorough comparison of the organizational structure and innovative structure of the
automobile business and Skunk Works has helped to identify the main areas that need to be
improved for facilitating innovation. The automobile firm must replace the tall matrixed
structure with a simpler and flatter structure, create a shared vision, establish a creative climate
and strengthen the effectiveness of teamwork to support innovation in a better way.
Dubina, I. N. (2013). Measuring Organizational Climate for Creativity and Innovation.
In6Encyclopedia of Creativity, Invention, Innovation and Entrepreneurship6(pp. 1238-
Hoe, S. L. (2007). Shared vision: a development tool for organizational learning.6Development
and Learning in Organizations: An International Journal.
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