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May 11, 2024

Managing Lockheed’s Skunk Works

This piece covers how Kelly Johnson managed Lockheed’s famous Skunk Works. In its early decades, Skunk Works continuously produced novel aircraft that pushed the aviation industry forward. Its three most iconic aircraft were the U-2 “spy plane,” the Sr-71 Blackbird — still considered a cutting-edge aircraft 60 years after it was built — and the partially DARPA-funded F-117 Nighthawk — the first stealth bomber. Johnson believed the simple management playbook he used to operate his Skunk Works was “common sense.” Still, Johnson’s ruthless commitment to maintaining small teams and fiercely anti-bureaucratic processes proved difficult for competitors to replicate. The success of Johnson’s methods and the failures of competitors to replicate them carries key lessons for R&D organizations and funders alike.

Kelly Johnson when he was a young, formidable flight engineer at the young Lockheed. Photo courtesy of More Than My Share of It All.

What the Skunk Works does is secret. How it does it is not. I have been trying to convince others to use our principles and practices for years. The basic concept as well as specific rules have been provided many times. Very seldom has the formula been followed. — Clarence “Kelly” Johnson


This piece will round out a trio of pieces covering exceptional contractors from ARPA’s early decades. The first two pieces covered BBN and CMU’s autonomous vehicle teams. The former was a research firm unusually focused on novelty; the latter was a group of university researchers unusually focused on shipping real technology and incorporating firm-like management structures. Unlike those organizations, Skunk Works appears at first glance more similar to a traditional defense contractor than a research lab. But the novelty of its outputs demonstrates that Skunk Works is an all-time great R&D lab in its own right. Skunk Works got much more funding from the armed forces and CIA than it did ARPA. But it still deserves to be covered in the ARPA playbook because, to many, the name “Skunk Works” has become synonymous with the topic of defense innovation.

Today, many view a big bureaucracy like a defense prime as a terrible place to build ambitiously. This is more true today than it was in the 1950s, but it was still often true back then. Yet, Kelly Johnson was able to build an applied research powerhouse within Lockheed that designed arguably the three most impressive spy planes and stealth bombers in American history. To top it off, many of Skunk Works’ novel planes were built on budget and in only 180 days. This was all made possible by Johnson’s clear vision of what was important when running a lab and the trust Lockheed management and DC project funders had in him.

But before I detail how Kelly built Skunk Works, I must first dive into how Kelly Johnson earned his stripes as a young aircraft engineer. This is key to understanding his management of the Skunk Works. In many ways, his management practices sought to maintain an environment similar to that of the young aviation industry he came up in.

The Education of Kelly Johnson

To many decades-long Skunk Works employees, the essence of the lab was inseparable from its founder and boss: Kelly Johnson. So, to begin to understand the lab and how it operated, we first need to understand Johnson and his background.

As a boy, Kelly came to the decision that he wanted to learn how to build airplanes. He read every book on the only two-decade-old subject he could get his hands on at the local Carnegie Library. When he got to the University of Michigan, he quickly found a job helping a professor operate the school’s wind tunnel. The professors at the University of Michigan, like many engineering schools at the time, did much of their research on industry contracts. This gave Kelly the opportunity to help improve real vehicles for paying customers. In his 1985 autobiography, More Than My Share of It All, Kelly describes several contracts he was working on with a Professor Pawlowski, writing:

He, like some of the other professors, had contracts outside the college. In the wind tunnel, I worked for him on design of the Union Pacific streamlined train, on a smoke-removal project for the city of Chicago, and on one of the very early proposals for generating energy with a wind machine.

In addition to assisting professors with their projects, Kelly asked for permission to take on his own contracts. They agreed and said that he could use the wind tunnel when it was idle. He simply had to pay the university an hourly fee to rent it. The first customer he sought out was the Studebaker Motor Company. Kelly was confident he could help the company. The wind tunnel was a relatively young scientific instrument. Many companies did not have one of their own. He described his attitude going into the contract, writing:

It was obvious that the wind tunnel could be very useful in designing streamlined automobiles. We got an assignment to test the Pierce Silver Arrow, which was to become one of the early “totally-streamlined” cars. We knew all the tricks on how to reduce drag caused by air resistance. We found, for instance, that the big ugly headlamps on Studebaker cars were eating up 16 percent of the power the engine developed at 65 miles an hour. We managed to get them shaped into the fenders. We worked on a lot of other problems and ran many, many tests.

In 1932, Johnson graduated with his bachelor’s degree. It was a horrible job market, but he and a friend borrowed a professor’s car and drove to the West Coast to introduce themselves to aircraft companies to see if they had any work available. One of the companies was a small outfit named Lockheed which had recently been purchased for $40,000 (~$850,000 today). They told Kelly that they did not have a job for him, but that if he came back next year they might have something for him. So, he returned to Michigan and enrolled in a master’s program. In this period, his consulting and research assistant projects became even more impressive. The outputs of one of his personal contracting endeavors even made a splash in the local newspaper:

Five of the qualifying cars which will race at Indianapolis Memorial Day have bodies designed by two university graduate students, C.L. Johnson and E.D. Palmer. All of the cars are semi-stock Studebakers and all qualified for the race at speeds ranging between 110 and 116 miles an hour.

Kelly referred to the experience earned on these contracts as “a liberal education for me in the practical application of aerodynamic theory.”

During this year, one of the airplane models sent to Kelly’s professor for wind tunnel testing came from Lockheed. The model, which would become the Lockheed Electra, was in a new business area for the small firm. Board Chairman Robert Gross had decided that the recently re-organized company’s future was no longer in single-engine wooden aircraft, but in twin-engine all-metal designs. These designs could carry more passengers. At the end of testing, Kelly and his professor markedly disagreed on the readiness of Lockheed’s model. Johnson noted:

It developed some very serious problems, I thought, from what I then knew of aerodynamics. It had very bad longitudinal stability and directional-control problems. But most aircraft of that day had similar failings. Professor Stalker, in consultation with Lloyd Stearman, already a recognized top-notch designer at age 33 and first president of the company, decided the figures were acceptable.

The report was sent to Lockheed without Kelly’s opinions included.

After completing his additional year at Michigan, Lockheed hired Johnson to work under Chief Engineer Hall Hibbard — a young man himself, only seven years older than Johnson. Kelly was going to be making far less than he was running his consulting projects at Michigan. Johnson recounted his initial hiring arrangement, writing, “I was to receive $83 a month (~$2,000 today) to start in tool design until they could assign me as an engineer. There were five engineers at the time.” He may have received a small pay bump when he got his title changed to engineer. But this was not about the money for Johnson. This was about doing what he always wanted to do: designing new planes. He reflected on why leaving his lucrative wind tunnel practice and joining Lockheed was an easy decision, writing:

At the university we certainly weren’t going to design aircraft — and that was my goal. But I didn’t make that much money again until ten years later.

Johnson was outspoken from his first moment at the company. He was not one to sit quietly if he thought mistakes were being made. Johnson recalled his first days at the company, writing:

Practically the first thing I told Chappellet and Hibbard was that their plane was unstable and that I did not agree with the university’s wind-tunnel report.

Hibbard was not insulted. He was, instead, quite open-minded and would not forget that Johnson had said this — even if he did not scramble to fix the problem at that moment. Hibbard recounted years later in an interview that he had wanted to get some “new young blood…fresh out of school with newer ideas” in his engineering department. Kelly Johnson proved to be that and more.

But, initially, the young Johnson was assigned to work in the tooling department. There, he received a kind of hands-on education that he felt most airplane designers couldn’t find anywhere in the post-war years. He took quite well to the hands-on nature of the work. He had, after all, spent much of his youth working in construction. In the tooling department, he worked with an old hand named Bill Mylan and learned the airplane production business from the workman’s end of things. While in the tooling department, Kelly learned to actually build planes, designed a furnace to heat-treat a metal that was new to Lockheed’s production, and made beginner’s mistakes passing design instructions to workmen. In no small part, Kelly credited these early experiences with helping him understand how to design airplanes that were buildable.

Johnson’s Growing Reputation

After a few months of tooling work, Hibbard called Kelly into his office to give him a new assignment. Hibbard was going to put the young would-be engineer’s ideas to the test. The assignment would prove that Johnson’s wind tunnel days had left him with a remarkably deep intuition for aerodynamics. Johnson recalls the meeting with Hibbard and getting sent back to his old wind tunnel, writing:

“Kelly, you’ve criticized this wind-tunnel report on the Electra signed by two very knowledgeable people. Why don’t you go back and see if you can do any better with the airplane?”

Hibbard sent me back to the University of Michigan wind tunnel with the Electra model in the back of my car. It took 72 tunnel runs before I found the answer to the problem…It was a process of evolution. On the seventy-second test, I came up with the idea of putting controllable plates on the horizontal tail to increase its effectiveness and get more directional stability. That worked very well, particularly when we removed the wing fillets, or fairings onto the fuselage — put on apparently because they were coming into style and being used successfully on such airplanes as the Douglas DC-1. And we avoided the trouble others had with them when not used properly…We then added a double vertical tail because the single rudder did not provide enough control if one engine went out. That was so effective we removed the main center tail. And there you had the final design of the Electra. The distinctive twin tails on all of the early Lockheed metal airplanes, and the triple tail of the familiar Constellation airliner of the mid-’40s and ’50s, were the result of these tunnel tests.

Hibbard was impressed and sent Johnson a note telling him how great of a job he had done. Johnson very proudly noted that:

When I returned to the plant. I was a full-fledged member of the engineering department. I was number six.

As a member of the small engineering department, he did crucial work on all parts of the Electra. In the process of learning to wear so many different hats for the Electra and other projects, Kelly felt that he became an “honest-to-god aircraft engineer.”

I worked not only on the aerodynamics of the airplane, but on stress analysis, weight and balance, anything and everything they threw at me. And, of course, more wind-tunnel testing. From that, I became the logical choice to be flight test engineer on the airplane when it was ready to fly.

Kelly noted that the Electra, with its iconic twin-tail, became the fastest multi-engine transport in the world at the time, with cruising speeds above 200 miles per hour. Lockheed delivered the first aircraft in mid-1934. At the time, the small company had six engineers and about 200 factory crew.

Over the next few years, Johnson would do all sorts of work on several derivatives of the Electra. For one of these planes, the Model 14, Kelly ran extensive wind tunnel tests to help design a new airplane part called wing flaps. These flaps allowed the wing to remain large during takeoff to aid in control and then become smaller in flight and increase speed. This Lockheed-Fowler Flap earned Johnson the Lawrence Sperry Award — the first of countless aviation awards he would win in his storied career.

But this achievement was nothing compared to Kelly’s 1938 efforts. With World War II ramping up, the British knew they needed an anti-submarine patrol plane. Getting word of this, Lockheed quickly threw together a proposal for an anti-submarine version of their new Model 14 to show the British. The British representatives were so impressed at how quickly the small company incorporated the recommendations from the group’s first meeting — in a single weekend — that they invited Lockheed to meet with their technical staff in England. Lockheed sent a four-person team on the trip. Kelly was the sole representative for the engineering team.

In the first meeting in England, the British requested several adjustments that required an almost complete re-design by the Lockheed team. Upon leaving the meeting, the team acquired a drawing board and drafting equipment. Kelly then proceeded to lock himself in a hotel room over the three-day weekend. Johnson recalled the event, writing:

I had to fit in all this new equipment, re-arrange copilot and radio operator positions, make weight and structural analysis, figure contract pricing, and guarantee that the design would meet certain performance requirements.

It was a three-day holiday weekend — Whit Sunday, Whit Monday. I worked a solid 72 hours on this redesign — not taking time for sleep, just catnapping briefly when absolutely necessary. I was a rumpled figure…When finally I fell into bed for some very sound sleep — in the room I shared with Courtlandt to save on expenses — it was the first time I had removed my clothes in 72 hours.

Johnson’s efforts were well worth it. The team at the Air Ministry was extremely impressed. Amid an ongoing war, Lockheed’s ability to work quickly was reassuring. Lockheed closed the deal in England that week. Before giving Lockheed a contract to build at least 200 these Hudson airplanes, the British only had one point of concern for Lockheed. The impressive designer who re-modeled the plane over the weekend was extremely young — Johnson was 28. In fact, the entire Lockheed team was young. The leader of the attaché, Courtlandt Gross, was only 36. Gross recounted Air Marshal Sir Arthur Varnay expressing his one concern as follows:

Mr. Gross, we like your proposal very much, and we very much like to deal with Lockheed. On the other hand, you must understand that we’re very unused in this country to dealing — particularly on transactions of such magnitude — on the technical say-so of a man as young as Mr. Johnson. And, therefore, I’ll have to have your assurance, and guarantee, in fact, that if we do go forward, the aircraft resulting from the purchase will in every way live up to Mr. Johnson’s specifications.”

Gross assured Varnay that he and his brother, Lockheed’s Chairman, had every confidence in the young Johnson. With this assurance, a deal was struck. It was, according to Kelly, “the largest aircraft production order placed up to that time in the United States.”

Not long after to returning from the trip, Johnson was named Lockheed’s Chief Research Engineer. The young man now had a big title and a fast-growing reputation.

Kelly Johnson testing a Lockheed Electra model in the wind tunnel at the University of Michigan. Phot courtesy of Wikimedia commons.

Skunk Works is Born

As the war progressed and Lockheed’s production lines rolled off Hudson’s vital to the war effort, the firm found its way into more and more contracts. Before the US entered the war, Lockheed had proposed building a prototype jet engine-powered plane for the Army Air Corps. The Air Corps was initially cool on the idea, but eventually agreed as they saw the British working on a similar aircraft. Kelly agreed to produce an experimental model of the proposed aircraft in a timeline that would become quite standard for his Skunk Works crew: 180 days.

The Army was quick to get Kelly his contract. Kelly recalled how quickly General Frank Carrol went from deciding this was a good idea to producing a contract, writing:

“We’ll give you a contract for the airplane, Kelly, and for Nate’s engine as well,” said Gen. Frank Carrol, commanding officer of Wright Field. “But you’ll have to use the British engine in the first airplane because we need it — and all the jet fighters you can build — as soon as possible to use against the Me-262. Your new engine couldn’t possibly be ready for service in time.”

Since I had promised to build a jet airplane within 180 days, I asked, “When will we get a contract? When will the time start?” “You will have a Letter of Intent this afternoon by 1:30 p.m.” he replied. “There is a plane leaving Dayton for Burbank at two o’clock. Your time starts then.”

And it did. The date was June 8, 1943. Gen. H. H. “Hap” Arnold, himself, had approved the contract.

Upon returning to Lockheed’s Burbank headquarters with the good news, Robert Gross was quick to tell Kelly that Lockheed had few people, few machines, and almost no room for such a project. They were already up to their eyeballs producing around 28 airplanes per day — P-38s, B-17s, and Hudsons, and others. Gross was also quick to tell Kelly that he thought nothing would come of the contract. But none of that meant Johnson wouldn’t be allowed to pursue the project. Kelly wrote:

But he [Gross] and Hibbard always were open to new ideas and backed me in many critical times…“You brought this on yourself, Kelly,” Gross stated. “Go ahead and do it. But you’ve got to rake up your own engineering department and your own production people and figure out where to put this project.”

This was an opportunity much bigger than just this one contract for Johnson. The Lockheed company had been rapidly expanding throughout his tenure there, and he felt this was making the design of new, interesting planes more difficult. He reflected on these difficulties, writing:

For some time I had been pestering Gross and Hibbard to let me set up an experimental department where the designers and shop artisans could work together closely in development of airplanes without the delays and complications of intermediate departments to handle administration, purchasing, and all the other support functions. I wanted a direct relationship between design engineer and mechanic and manufacturing. I decided to handle this new project just that way.

Upon receiving Gross’ green light, Kelly set up some crates adjacent to the new Lockheed wind tunnel and found a circus tent to put over the top of them. With that, the Skunk Works was born.

To acquire more tools, Kelly got permission to buy out a small local machine shop. He scrounged together 22 other engineers from around the company who he had worked with before and trusted. Johnson had high standards, and he believed they were all very good. He also set the group up with its own purchasing department. To Kelly, it was vital to Skunk Works’ success that “every function…needed to operate independently of the main plant.”

The Air Corps moved almost as fast as Johnson did. Nine days after the project was green-lit, Skunk Works hosted colonel and a major at Skunk Works for a mockup conference that went smoothly.

Many complications arose in completing the project. Kelly emphasized that “it was a complete new world of flying and testing” with these jet-engine aircraft. The plane ran into the same compressibility problem when it approached Mach 1 that Lockheed had encountered with its P-38 development. The team was able to overcome the airplane’s aileron buzzing by installing shock absorbers in just the right fashion. In addition, common problems present in new aircraft designs popped up. Certain parts of the plane proved precarious to weld together. Extensive re-designing and vacuum testing were required to overcome these issues. But whatever problems came up, the small team of particularly talented engineers and workmen worked through them quickly. The small operation seemed to be as effective at producing experimental aircraft as Kelly had hoped.

And the Air Corps was also an excellent project partner. This was vital, in Kelly’s estimation. He noted that:

There were only six people from the military involved and two or three of us from Lockheed. We had approval to proceed that night. Six days later we had our government furnished equipment — guns, radio, wheels and tires, etc. At every stage of the work, we had excellent cooperation from Wright Field and the officers involved with the project. The job could not have been completed on such a tight schedule without it.

Skunk Works delivered the XP-80 plane to the Air Corps on Day 143 of the contract — more than a month ahead of schedule. The XP-80 took its first flight on January 8, 1944. Almost immediately, the Air Corps gave Skunk Works another contract to produce a modified version of the plane with an airframe almost twice as large — to make use of GE’s new engines. The two copies of the aircraft the Air Corps requested were delivered 132 days later. This design, the YP-80, was the precursor to the famous P-80 and two-seat T-33 training vehicle. According to Kelly, there went on to be more than 6,000 built in total.

The plane would not go on to see major use in World War II given the ending of the conflict. But it would later prove itself — first in the North Korean vs. South Korean conflict in 1950 — and also set several records. The most notable of which is probably the F-80 flying the route from Long Beach to LaGuardia in a record 4 hours and 13 minutes, averaging 584 miles per hour.

These first Skunk Works projects were a smashing success. Producing a prototype of a truly novel aircraft will never be completely smooth. But with these projects the team at Skunk Works was beginning to make it clear that they could routinely overcome these obstacles on tight schedules, even if not easily.

Skunk Works’ original XP-80 prototype. Photo courtesy of Wikimedia commons.
Open photo
Kelly Johnson congratulating test pilot Tony LeVier on a successful test flight. Photo courtesy of More Than My Share of It All.
Early photo of the F-80. As Johnson noted in the caption of this photo in More Than My Share of It All, “Even by today’s standards the Shooting Star looks sleek and swift in this earlier photo.”

The First Iconic Skunk Works Plane: the U-2 “Spy Plane”

In 1953 the group began work on their most ambitious airplane yet. Around this time, defense contractors were made aware of the country’s desperate need for aircraft that could fly recon missions over the USSR to acquire information on Soviet military capabilities. They needed equipment that could do this without being shot down by the Soviet’s advanced anti-aircraft weapons. Always game for a challenge, the Skunk Works put together a proposal for a plane that could fly approximately 70,000 feet, have a range of 4,000 miles, and would be a steady platform for advanced photographic equipment. Without a plane that could reach that height, the CIA and Air Force would have to resort to low-flying, high-casualty tactics to acquire information1

The Air Force initially did not think Skunk Works’ proposal was realistic. Other proposals to achieve this altitude were somewhat primitive technology like weather balloons.2 But the folks in DC decided to let the Skunk Works go ahead with the project anyway. Many in DC had exceptional faith in Kelly Johnson, just as the Gross brothers and Hall Hibbard did back in Burbank. Johnson describes the events that led to Skunk Works winning the contract as follows:

Our first presentation was to the Air Force, where it was turned down as too optimistic. They questioned that any engine even would operate at the altitude we were proposing. They were correct in that there was not proof at that time that this was possible. And the Air Force already had an airplane in development with the Martin company — an airplane with two engines which was preferred to our single-engine design.

But our proposal reached Trevor Gardner, then Assistant Secretary of the Air Force for Research and Development, and a brilliant engineer in his own right. Late in 1953, he invited me to come to Washington to discuss it. He had assembled a committee of scientists and engineers, and for three days they put me through a grilling as I had not had since college exams. They covered every phase of the aircraft design and performance — stability, control, power plants, fuels — everything.

Later I met and lunched with Air Force Secretary Harold Talbott, CIA Director Allen Dulles, and his right-hand man, Larry Houston, among a distinguished group. When I was asked why I thought Lockheed could do what I proposed — build 20 airplanes with spares for roughly $22 million and have the first one flying within eight months, Gen. Donald Putt graciously volunteered, “He has proven it three times already—on the F-80, F-80A, and F-104.”

The CIA took the lead in funding the project and Richard Bissel — Special Assistant to CIA Director Dulles and a fixture of post-war CIA leadership — became Skunk Works’ project liaison.

Kelly selected 24 other engineers to work on the project with him. The total project staff would eventually grow to a headcount of 81. Given the secrecy of the project, Skunk Works was not allowed to fly the plane at its Burbank headquarters. So, Kelly sent a test pilot around to find a secure location on which to build a runway and basic testing facilities. He named the remote strip of land that the pilot found in the Nevada Dessert “Paradise Ranch.” Today it is known as Area 51. Once selected, Lockheed hired contractors to begin constructing some roads, hangars, offices, living accommodations, etc. on the land.3 All of this was done while Skunk Works was working on the novel aircraft.

Skunk Works had to keep an extreme focus on ruthlessly minimizing weight throughout the design and construction of the aircraft. Many staple building materials had to be made thinner or replaced altogether. The entire team was constantly scouring for lighter materials and designs for each part of the aircraft. Each would have to be extensively tested and modified until the engineers were comfortable using it. All of this led to a quite interesting aircraft. Ben Rich explains how strange the aircraft seemed to other pilots and engineers, writing:

We designed and built that airplane for lightness. The wings, for example, weighed only four pounds per square foot, one-third the weight of conventional jet aircraft wings. For taxiing and takeoffs, jettisonable twin-wheeled “pogos” were fitted beneath the enormous fuel-loaded wings and kept them from sagging onto the runway while taking off. The pogos dropped away as the U-2 became airborne.

The fuselage was fifty feet long, built of wafer-thin aluminum. One day on the assembly floor, I saw a worker accidentally bang his toolbox against the airplane and cause a four-inch dent! We looked at each other and shared the same unspoken thought: was this airplane too damned fragile to fly?…Pilots were scared to death flying those big flapping wings into bad weather situations — afraid the wings would snap off…Adding to the sense of the airplane’s fragility was that the razor-thin tail would be attached to the fuselage by just three five-eighth-inch bolts.

(The plane and its enormous, drooping wings that almost sagged onto the runway, proved more resilient than the pilots or designers ever imagined.)

The engine was also a massive obstacle. This was partially a problem for the Skunk Works team but primarily fell to a long-time Skunk Works contractor. Rich described the difficulty in building an engine to operate at these high altitudes, writing:

My principal work was on the engine’s air intake, which had to be designed and constructed with absolute precision to maximize delivery of the thin-altitude air into the compressor face. Up where the U-2 aimed to cruise, just south of the Pearly Gates, the air was so thin that an oxygen molecule was about as precious as a raindrop on the Mojave desert. So the intakes had to be extremely efficient to suck in the maximum amount of oxygen-starved air for compression and burning.

In the end, the engine problem was overcome by the work of Skunk Works and two very impressive contractors. The most important contributor was probably Pratt & Whitney, a long-time Skunk Works partner. The P&W team modified an existing high-altitude engine they made that was considered top-of-the-line. The head of Pratt & Whitney himself put his best people on the job and they found a way to modify the engine so it could function in the extreme conditions. A major contribution was also made by Shell’s research team. Kelly Johnson got Shell’s R&D team to develop “a special low-vapor kerosene for high altitudes” that would not boil or freeze in the extreme conditions in which the U-2 operated. In many Skunk Works projects, key contributions from trusted contractors were vital.

The U-2 was completed and shipped to Paradise Ranch in late July — less than nine months after the contract was first issued. In early August, it accidentally took flight for the first time while conducting a routine taxi test. As test pilot Tony LeVier recalled, “Who’d have guessed an airplane could take off only going 70 knots? That’s how light it was.” The plane took its first official test flight a week later. The high-flying plane was a marvel, “able to glide 250 miles from 70,000 feet.” Within nine months of the first test flight, the CIA U-2s became operational.

On top of the U-2s achieving Kelly’s lofty technical goals and obtaining high-priority intelligence on the USSR, many consider this contract one of the greatest bargains in defense procurement history. Johnson and the Skunk Works came in far under budget. They returned $2 million of the original $22 million budget and were able to construct six extra airplanes from the spare parts the team didn’t need. Rich said they were able to build with these spares simply “because the U-2 functioned so well.”

Kelly Johnson standing with his arm on the thin, dangling wing of an early U-2. He noted on this photo in More Than My Share of It All that the plane was, “considered a technological triumph by any standard.”

What did Kelly Johnson think was Skunk Works’ special sauce?

Skunk Works’ success on the U-2 was not an isolated event. The Skunk Works would also go on to produce two more planes considered all-time greats — the Blackbird models and the F-117 stealth bomber — in addition to dozens of other successful planes. This, of course, raises the question: how did Skunk Works staff build so many novel planes on such a routine basis? Did they have a kind of special sauce?

Kelly Johnson believed they did. Kelly famously had a list of 14 rules he used to run the Skunk Works. However, upon reading his biography, it becomes clear that the beliefs and experiences that led to those rules could be distilled down to something like three key principles. The three principles are, roughly:.

  1. Reduce the bureaucracy to almost zero. Ideally, one person should have almost complete authority over day-to-day decision-making.
  2. Keep the team ruthlessly small.
  3. Whenever possible, only take on contracts where there is enough mutual trust with funders and subcontractors to work with them with a minimum amount of bureaucracy. If funder decisions cannot be made swiftly, the project is probably not worth pursuing.

The three beliefs above can be seen at work all over the Skunk Works operation. The following subsections will give the reader a clear idea of how these beliefs manifested themselves in the practical management of the Skunk Works.

Luckily, in More than My Share of It All, Kelly Johnson dedicates an entire chapter to explaining the simplicity of his special sauce. In the chapter, he makes it clear that he can’t believe how few true imitators Skunk Works had — given that so many companies claimed to have their own Skunk Works. Kelly opens the chapter, a bit incredulously, writing:

What the Skunk Works does is secret. How it does it is not. I have been trying to convince others to use our principles and practices for years. The basic concept as well as specific rules have been provided many times. Very seldom has the formula been followed.

As this section will detail, the lack of true Skunk Works imitators will not be shocking to any who are familiar with bureaucracies. The key management principles that helped Skunk Works thrive are simply non-starters in most bureaucracies. This is precisely why so many of Kelly’s rules-of-thumb are obsessed with warding off bureaucratic processes; this is also why Ben Rich lived in such fear of bureaucracies smothering Kelly’s great band of engineers from all sides when he took over the Skunk Works.

Principle #1: Minimize Bureaucracy, Centralize Power

For a variety of reasons, Kelly believed bureaucracies killed progress in designing and building new aircraft. Kelly believed one person should have complete control over day-to-day decision-making. An engineer should be able to come to him with a problem, and he needed to have the authority to tell them “yes” or “no” on the spot.

This type of approach may not have been as rare in his youth, but as his career wore on it became almost extinct. He lived to see the onset of slow decision-making processes begin to expand in the industry. Lamenting this, he writes:

I fear that the way I like to design and build airplanes one day may no longer be possible. It may be impossible even for the Skunk Works to operate according to its proven rules at some point in the future. I see the strong authority that is absolutely essential to this kind of operation slowly being eroded by committee and conference control from within and without. The ability to make immediate decisions and put them into rapid effect is basic to our successful operation.

In the 1950s, even the comparatively small Lockheed had grown bureaucratic enough to stifle ambitious work. Before being recruited to the Skunk Works in the late 1950s, Ben Rich worked in the main portion of the Lockheed company. He said the following about his time there and how the company operated:

Lockheed was very regimented and bureaucratic, and by my fourth year on the payroll I felt stymied and creatively frustrated. I had a wife and a new baby son to support, and my father-in-law, who admired my moxie, was pushing me to take over his bakery-delicatessen, which earned the family a very comfortable living.

The two decades between Kelly Johnson and Ben Rich joining the company had seen Lockheed cease to be the kind of place where an exceptionally driven individual or a genius had the chance to spread their wings. Hall Hibbard used to say that Kelly Johnson could “see air.” The then-Chief Engineer kept assigning the young Johnson more and more responsibility until, by the time he was made Chief Research Engineer at 28, he’d been largely responsible for many key aspects of Lockheed’s designs anyway. Rich — who was eventually Kelly’s hand-picked protegé — on the other hand, was considering leaving Lockheed to run a deli!

Johnson wrote the management chapter in his book hoping that individuals would find it who were brave enough to run a truly ambitious R&D operation. While the aircraft industry did not take his advice, readers of this Substack would be wise to. The same reasons that large organizations resisted properly copying Skunk Works back then are similar to the excuses they would use today — many aspects of bureaucracies and their emergent behavior are evergreen. Johnson outlined the primary reason truly copying Skunk Works was a non-starter in most companies, writing:

Most companies, while desiring the benefits, will not pay the price in revised methods and procedures for setting up a Skunk Works-type of operation. They will not delegate the authority to one individual, as Lockheed did in my case from the very first Skunk Works. It requires management confidence and considerable courage. Without the authority assigned to the Skunk Works by our military customers and the Lockheed corporation, we would not have been able to accomplish many of the things we have done, things about which I felt we could take a risk — and did.

Skunk Works may never have been green-lit in the first place had Hibbard and Gross not had an exceptional level of trust in Kelly Johnson. As Rich recalled, there was a general sentiment at Skunk Works when he joined in the late 1950s: “The open secret in our company was that the chief engineer [Kelly] walked on water in the adoring eyes of CEO Robert Gross.” And Johnson took full advantage of his well-earned long leash.

Kelly set up Skunk Works with a belief in the supreme power of individual visions. He did not believe that committees would design broken planes. But he did believe that they would produce uninspired and unoriginal planes. And there was absolutely no room for processes like that when the goal of his team was to design truly novel, experimental aircraft. He reflected on the impacts of bureaucracy on airplanes themselves, writing:

There is a tendency today, which I hate to see, toward design by committee — reviews and recommendations, conferences and consultations, by those not directly doing the job. Nothing very stupid will result, but nothing brilliant either. And it’s in the brilliant concept that a major advance is achieved.

Development of some of this country’s most spectacular projects — the atom bomb, the Sidewinder missile, the nuclear-powered submarine — all were accomplished by methods other than the conventional way of doing business outside the system.

Johnson’s efforts to minimize bureaucracy and belief in individual visions allowed Skunk Works to both produce ambitious plane designs and build them on short timelines. Kelly recruited some of the best Lockheed had to offer. He implemented a system where a small number of simple drawings were used and things could be changed on the fly. He put all the engineers, designers, and workmen in close quarters. And he did everything he could to enable them to test ideas as fast as they had them.

A genius would feel challenged by the environment and Johnson’s no-bullshit technical grillings, not stifled by bureaucracy. In his book, Ben Rich referred to a 24-year-old aerodynamicist working on a project with him, the late Dave Campbell, as “destined for greatness.” Skunk Works was an environment where those qualities could both show and be taken advantage of. The primary portion of Lockheed was no longer like that. But in Skunk Works, Kelly kept a culture alive similar to the company he first arrived at in the 1930s. In that young Lockheed company, with only five engineers, Kelly was not just an aerodynamicist, but an aerodynamicist, stress analyst, weight/balance engineer, and flight test engineer all in one. He was challenged and largely unencumbered by rules and processes. In that role, his genius could truly be put to work.

When Kelly Johnson was at the helm of the Skunk Works, the individual visions overriding the projects were often his own. Of course, during his reign there was plenty of room for Skunk Works staff to demonstrate their genius on their own components of the plane, helping others problem solve, or via influencing Johnson with their ideas. Johnson even kept quarters on him to dole out if anyone ever proved him wrong. However, the fact of the matter is that in his decades-long run as the lab’s leader, he lost very few quarters. Rich said the following on Johnson’s wide-ranging, freakish understanding of aircraft design:

Nothing got by the boss. Nothing. And that was my sharpest impression of him, one that never changed over the years: I had never known anyone so expert at every aspect of airplane design and building. He was a great structures man, a great designer, a great aerodynamicist, a great weights man. He was so sharp and instinctive that he often took my breath away. I’d say to him, “Kelly, the shock wave coming off this spike will hit the tail.” He would nod. “Yeah, the temperature there will be six hundred degrees.” I’d go back to my desk and spend two hours with a calculator and come up with a figure of 614 degrees. Truly amazing. Or, I’d remark, “Kelly, the structure load here will be…” And he would interrupt and say, “About six point two p.s.i.” And I’d go back and do some complicated drudge work and half an hour later reach a figure of 6.3.

With someone like Kelly around, it makes sense that his vision was the individual vision elevated to the fore. But the lab’s success was not dependent on his vision. Arguably the lab’s greatest military contribution, the F-117 stealth bomber, came in its first project after Johnson retired.

Kelly picked Ben Rich as his successor because he thought Ben was innovative, practical, and an absolute terrier in working through some of Skunk Works’ most difficult problems. Those traits were what was essential. But Rich knew he was no visionary like Kelly Johnson. Rich’s stealth project was extremely unique and gutsy. This was the case because he elevated the ambitious vision of a single individual to the fore of the project. But it was not his vision. He describes the project’s inception, writing:

I wish I could claim to have had a sudden two a.m. revelation that made me bolt upright in bed and shout “Eureka!”…The truth is that an exceptional thirty-six-year-old Skunk Works mathematician and radar specialist named Denys Overholser decided to drop by my office one April afternoon and presented me with the Rosetta Stone breakthrough for stealth technology…

Denys had discovered this nugget deep inside a long, dense technical paper on radar written by one of Russia’s leading experts and published in Moscow nine years earlier…As Denys admitted, the paper was so obtuse and impenetrable that only a nerd’s nerd would have waded through it all…As he explained it, [Pyotr] Ufimtsev had revisited a century-old set of formulas derived by Scottish physicist James Clerk Maxwell and later refined by the German electromagnetics expert Arnold Johannes Sommerfeld. These calculations predicted the manner in which a given geometric configuration would reflect electromagnetic radiation. Ufimtsev had taken this early work a step further. “Ben, this guy has shown us how to accurately calculate radar cross sections across the surface of the wing and at the edge of the wing and put together these two calculations for an accurate total.”

Rich then explains how radar technology works and how existing planes often show up on radar as large as houses. He then continues:

We desperately needed new answers, and Ufimtsev had provided us with an “industrial-strength” theory that now made it possible to accurately calculate the lowest possible radar cross section and achieve levels of stealthiness never before imagined. “Ufimtsev has shown us how to create computer software to accurately calculate the radar cross section of a given configuration, as long as it’s in two dimensions,” Denys told me. “We can break down an airplane into thousands of flat triangular shapes, add up their individual radar signatures, and get a precise total of the radar cross section.”

So, Rich had Overholser and a labmate put together a program to take advantage of this insight and design a model plane out of 2D surfaces that had a minuscule radar cross section — computing power was not strong enough to build the model out of 3D surfaces. The final design’s radar cross section appeared to be smaller than existing planes by several orders of magnitude. Instead of the plane being the size of a home or a barn, the question was now, “Which of these ball bearings in Ben Rich’s pocket would show up bigger than the plane, and which wouldn’t?”

Many Skunk Works veterans thought the design was horrible. It looked like an ugly, crude, origami rendition of a plane. The more a lab member knew about aerodynamics, the uglier the model looked. Many Skunk Works old-timers pushed back. Ben Rich wanted his team — which specialized in building planes that flew exceptionally — to focus on building the least aerodynamically sound plane they’d ever seen. Additionally, many in DC thought Rich must be mistaken about what the true radar cross section would actually be. Kelly Johnson held both of these gripes against Rich. He referred to the radar cross section computations as “theoretical claptrap.” Rich won a rare quarter off Johnson when the wooden model did register a vanishingly small radar cross section. Johnson, still skeptical, flipped him the quarter and said, “Don’t spend it until you see the damned thing fly.”

Luckily, it did. It was a tall task. But with the help of recent developments in computing power, the plane was able to fly using constant computer adjustments to help counteract issues with its chaotic aerodynamics. Kelly was wrong to not believe in the plane. But he was visionary in building a lab that elevated individual design visions and a single, strong boss above the gripes of a retired consultant like him. And he was right to entrust the lab to someone who was a terrier in assessing a technical idea’s merits, even if the results looked very unorthodox.

The plane broke no speed records, but that didn’t matter much since it showed up no bigger than a bird on enemy radar screens. The stealth bomber project is a strong data point in favor of the idea that minimizing bureaucracy and entrusting a bright individual with power was more essential to Skunk Works’s success than any stroke of genius from Kelly Johnson. Kelly Johnson was a genius. But, more importantly, Skunk Works was a place built to facilitate genius ideas into built reality.

Kelly built an operation that left enough leeway for the common sense and practical wisdom of his team to take over. From one project to the next, many of the operational specifics changed. Johnson noted:

The theory of the Skunk Works is to learn how to do things quickly and cheaply and to tailor the systems to the degree of risk. There is no one good way to build all airplanes.

At the start of each project, the Skunk Works leader was free to sit down with his best people and plan out exactly how to build the new plane in the way that made the most sense. From one plane to the next, the process might look extremely different. To make this work, the team needed to be kept small enough that new operating procedures could be implemented without chaos ensuing. And they needed to do this without countless pre-arranged meetings. That wasn’t the Skunk Works way.

Principle #2: Keep the Team Viciously Small

Skunk Works’ small team emphasis allowed team members to seamlessly stay updated on the entirety of the project. It kept things small enough that even the machinists could contribute knowledge to the early design stages of the project, not just have ideas dictated down to them.

Johnson emphasized the high-level importance of maintaining a small team, writing:

Working with a limited number of especially capable and responsible people is another requirement. Reducing reports and other paperwork to a minimum, and including the entire force in the project, stage by stage, for an overall high morale are other basics. With small groups of good people you can work quickly and keep close control over every aspect of the project.

Ben Rich’s book describes precisely how this small team emphasis made a difference in Skunk Works’ processes. He writes:

We had our own unique method for building an airplane. Our organizational chart consisted of an engineering branch, a manufacturing branch, an inspection and quality assurance branch, and a flight testing branch. Engineering designed and developed the Have Blue [stealth prototype] aircraft and turned it over to the shop to build. Our engineers were expected on the shop floor the moment their blueprints were approved. Designers lived with their designs through fabrication, assembly, and testing. Engineers couldn’t just throw their drawings at the shop people on a take-it-or-leave-it basis and walk away.

Our senior shop people were tough, experienced SOBs and not shy about confronting a designer on a particular drawing and letting him know why it wouldn’t work. Our designers spent at least a third of their day right on the shop floor; at the same time, there were usually two or three shop workers up in the design room conferring on a particular problem. That was how we kept everybody involved and integrated on a project. My weights man talked to my structures man, and my structures man talked to my designer, and my designer conferred with my flight test guy, and they all sat two feet apart, conferring and kibitzing every step of the way. We trusted our people and gave them the kind of authority that was unique in aerospace manufacturing. Above all, I didn’t second-guess them.

Even the procurement staff were a part of this. Johnson described why it was vital to keep them in the loop in a similar fashion, writing:

We maintain a very close liaison from me to the designer, to the purchasing agent — so that he understands the urgency in acquiring materials; to the tooling people; and to the people who actually will build any part of the plane.

For those who read the previous FreakTakes piece on ARPAnet contractor BBN, this approach should sound remarkably familiar. In it, I shared the following quote from ARPAnet project leader Frank Heart, reflecting on how he managed his small team of bright engineers:

I think mostly I tend to believe important things get done by small groups of people who all know all about the whole project. That is, in those days all the software people knew something about hardware, and all the hardware people programmed. It wasn’t a group of unconnected people. It was a set of people who all knew a lot about the whole project. I consider that pretty important in anything very big. So I suppose if you call it a management style, that would be something I’d state. I think also that they were a very, very unusually talented group. I think things tend to get done best by small groups of very, very good people — if you can possibly manage that. You can’t always manage it. So if you again want to call it a management style, it is to get the very, very best people and in small numbers, so they can all know what they’re all doing.

In that piece, I then expanded upon Heart’s point, writing:

Heart was extremely averse to the team growing so large that communication had to be done on paper. He preferred their style of “very, very frequent interaction on problems.” As Walden remembered, “I don’t remember such a thing as we had a weekly progress meeting. We probably were more in tune with the progress than that; we probably did it hourly.” Heart and the entire, small team did their best to stay technically involved with each other’s work. Heart, as a rule, insisted on technically understanding every bit of the project. The individual team members attempted to do the same, which they felt was quite easy to do. The team all had offices and work stations immediately in the vicinity of each other. As things came up, they’d simply go talk with the relevant individual or call an impromptu meeting.

BBN’s Frank Heart and Kelly Johnson shared extremely similar beliefs on how to manage engineering teams building extremely novel equipment.

The Skunk Works project teams were about ten times larger than BBN’s project teams, given the more industrial nature of the operation. But these were still very small teams by aviation standards. Kelly estimated that Skunk Works’ teams were only 10%-25% of the usual size when “compared to the so-called normal systems” of his day. Ben Rich, after some time at the Skunk Works, helped lead a staff of three on the Blackbird project. He was quick to note that “by Skunk Works standards that was almost an empire.”

Even an exceptionally difficult project like the SR-71 Blackbird did not balloon in size. That’s saying something. Nearly every material used and part designed for the airplane needed to be rethought due to the extreme cruising speeds (~2,000 mph) and altitude (~85,000 feet) the plane would reach. Kelly made it clear at the very beginning of the project that the team would need to “start from scratch as if we are building the first airplane, just like the Wright brothers.”

In the face of this overwhelming project, Johnson doubled down on his own people and systems. He did not resort to an inordinate increase in headcount. The following excerpt from Ben Rich confirms the still-modest scale of things on the massive project. Rich writes:

Developing this air-inlet control system was the most exhausting, difficult, and nerve-racking work of my professional life. The design phase took more than a year. I borrowed a few people from the main plant, but my little team and I did most of the work. In fact the entire Skunk Works design group for the Blackbird totaled seventy-five, which was amazing.

Writing his book in 1994, Ben Rich was acutely aware of how much the industry had changed. He closes the above quote with the following quip:

Nowadays, there would be more than twice that number just pushing papers around on any typical aerospace project.

Principle #3: Maintain Similar Expectations of Project Partners

Kelly’s belief in minimizing bureaucracy and keeping team size ruthlessly small did not stop with his own Skunk Works team. He was adamant that, if at all possible, projects should only be undertaken when a project’s funder could promise similar, strong project leadership. This was the second of his famous fourteen rules:

Strong but small project offices must be provided both by the military and industry.

Johnson likely felt there was little use in putting his team into overdrive just for a customer to hold up progress and changes every step of the way. So, he wanted quick “yes” or “no” decisions from funders as well.

Throughout his book, Johnson was quick to lavish praise on those individuals and areas of the armed services that, once they decided to move forward, were excellent project partners. When he had it his way, Johnson’s projects often had something like one project liaison and ~6 people whose opinions mattered in key decisions. Kelly provided many specific cases of what ideal relationships with funders looked like. Sharing one example, he writes:

Operating at its best on our Air Force programs, the Skunk Works could get an almost immediate decision on any problem. I could telephone Wright Field, Dayton, for example, talk to my counterpart who headed the small project office there for the military — and who was allowed to stay with it to conclusion — and get a decision that same morning. Now, that’s just not possible in standard operating procedure. It’s a difficult concept to sell for the first time, though, since it means abandoning the system.

This is what an ideal, standard case looks like. But it should also be noted that Rich and Johnson mention several cases of project liaisons going above and beyond in almost unbelievable ways. In one case, Rich and Johnson noted that an exceptional CIA project partner set up shell companies and a kind of false supply chain to to acquire a large quantity of titanium from the Soviet Union for an aircraft. But, of course, that level of proactivity from the funder was not the usual.

But working with a customer that knew how to make decisions quickly was essential. It was so essential that Ben Rich noted that Kelly had an unwritten fifteenth rule:

Starve before doing business with the damned Navy. They don’t know what in the hell they want and will drive you up a wall before they break either your heart or a more exposed part of your anatomy.

On one occasion, Ben Rich did not heed this warning and sought to build a stealth boat for the Navy. He planned to do it using the same design software that they were using to build the F-117 bomber. Pursuing this project was a decision Rich came to sorely regret.

The project actually broke multiple Kelly Johnson rules. But the first misstep was forced onto Ben Rich due to internal Lockheed politics. Lockheed’s Ocean Division was in financial trouble. Meanwhile business was booming at the Skunk Works even without the stealth ship contract. So, Rich handed off the development contract for the ship to Lockheed’s Ocean Division. But Rich also sent several core team members over to the division to help lead the project. The Skunk Works group group was led by Ugo Coty. Before sending Coty and co., Ben had told the Ocean Division executives that it would be essential to let the mathematically inclined team members have the final say over everything in the ship’s design.

To the executives, this was a seemingly off-the-wall way to build an aircraft or ship. But this is exactly what Rich had decided to do with the F-117 project. It was not at all the normal procedure, but it’s what made the most sense. The radar cross section of the ship could only be as low as the most visible of its parts. Even one periscope being slightly misdesigned could make the ship appear bigger than a barn. And the mathematics of radar cross sections was unintuitive to almost all of the ship engineers.

The Oceans Division proved incapable of following Ben’s advice. And the Navy brought so many cooks into the kitchen that it probably wouldn’t have mattered even if that had not happened. Rich describes the mess caused by the Lockheed and Navy bureaucracies on the project, writing:

“We need Ugo to keep those damned shipbuilders from going off on a tangent,” I told Roy Anderson. “This is one project where the method of shipbuilding is much less important than the stealth technology,” I told Roy. “They’ll want to sacrifice the stealth if it gets in the way of the ship’s performance, but Ugo will force them to stay focused. All Dr. Perry wants to prove out is the stealth. That’s key to this test. If the ship merely floats that’s good enough.” As it happened, my fears about the conflicting agendas between professional shipbuilders and experts on stealth technology, like Dr. Perry, were realized almost from the first day that the Ocean Division took over the project.

Ugo Coty did his best, but he ran into heavy weather. His original six-man operation quickly was shunted aside by eighty-five bureaucrats and paper-pushers running the program for the division. Then the Navy marched in, adding its supervision and bureaucracy into the mix with a fifty-man team of overseers, who stood around or sat around creating reams of unread paperwork. No ship ever went to sea — not even a top-secret prototype — without intensive naval supervision to ensure that all ironclad naval rules and regulations were strictly enforced before the keel was ever laid.

“Where is the paint locker?” a Navy commander demanded of Ugo, rattling the blueprint plans. Since the days of John Paul Jones, every naval ship afloat has a damned paint locker on board. Sea Shadow would definitely not be the only exception since the Revolutionary War.

To hammer home the point about the “Navy way,” Rich goes on to tell a story of Skunk Works modifying its Jetstar for the Navy under Kelly Johnson. The original Jetstar project itself took 55 engineers eight months. The Navy project, which was a little more complicated, took 27 months. Rich noted that “one hint as to the reason why” is that Jetstar’s mockup conference had six visitors on hand. For a similar conference, the Navy sent 300. To him, that was the “Navy way.”

Before moving on, it is important to note that Johnson also had a strong preference for only working with contractors who didn’t require increased bureaucracy to be added to the project. In an ideal case, this would look like the U-2 project in which key technical project problems were offloaded to Pratt & Whitney and Shell researchers to work their way through. In another case, Skunk Works took a crucial tire problem to B.F. Goodrich “which developed a special rubber mixed with aluminum particles that gave our wheels a distinctive silver color and provided radiant cooling.” This was just the solution Skunk Works needed. However, in more standard cases what this means is simply sticking with trustworthy suppliers and extending them the same respect Skunk Works liked to have itself. As Kelly Johnson put it:

Suppliers and others associated with a project must be extended the same kind of rules and permissions that are given us for the entire program. This cuts red tape and costs and allows all participants to concentrate on the product instead of a system. It is so simple.

This was more feasible in some cases than in others. But these were the relationships Johnson strove to maintain.

While all of this sounds quite simple, replicating Skunk Works has proven anything but simple for most would-be copycats.

Why So Many Skunk Works Copycats Failed

In the early 1970s, shortly before Kelly Johnson’s retirement, Northrop made an offer to poach Ben Rich — then one of Johnson’s top lieutenants. Ben Rich recalls Kelly’s frank warning when he confronted Johnson with his offer, writing:

I laid out Northrop’s offer, and he closed his eyes and solemnly shook his head. “Goddam it, Ben, I don’t believe a word that guy said to you. I’ll bet my ranch against Northrop starting its own Skunk Works. Companies give it lip service because we’ve been so successful running ours. The bottom line is that most managements don’t trust the idea of an independent operation, where they hardly know what in hell is going on and are kept in the dark because of security. Don’t kid yourself, a few among our own people resent the hell out of me and our independence. And even those in aerospace who respect our work know damned well that the fewer people working on a project, the less profit from big government contracts and cost overruns. And keeping things small cuts down on raises and promotions. Hell, in the main plant they give raises on the basis of the more people being supervised; I give raises to the guy who supervises least. That means he’s doing more and taking more responsibility. But most executives don’t think like that at all. Northrop’s senior guys are no different from all of the rest in this business: they’re all empire builders, because that’s how they’ve been trained and conditioned. Those guys are all experts at covering their asses by taking votes on what to do next. They’ll never sit still for a secret operation that cuts them out entirely. Control is the name of the game and if a Skunk Works really operates right, control is exactly what they won’t get…Mark my words, you’ll be reporting to a dozen management types and they won’t let you out of their sight for one minute.”

Ben Rich didn’t leave. And the Northrop operation went on to operate essentially how Kelly said it would. This prediction was not Kelly Johnson demonstrating any kind of remarkable prediction abilities. He was simply recounting what he continually saw happen when companies said they wanted a Skunk Works.

The sorts of problems Kelly figured would happen to Northrop and those that had happened in the Naval stealth project arose repeatedly. The following excerpt describes similar problems that afflicted the Army’s Cheyenne rigid-rotor helicopter program. Kelly himself attempted to train Jack Real and six of his top supervisors who would be running the program. Kelly had them shadow his Skunk Works operation for six months. But his efforts were in vain. Kelly writes:

Real and his team began with great enthusiasm to apply our operating methods to meet the Army’s design specifications. But within six months, the satellite Skunk Works had a purchasing department larger than my entire engineering department working on seven projects. They had become buried in the usual paperwork already.

Despite the best of intentions, the Army had at the time ten different test centers and bases involved in the procurement of new weapon systems. And when you have that many representatives involved in design and development, with no single person in charge to represent the customer, the Skunk Works concept cannot work.

It is absolutely imperative that the customer have a small, highly-concentrated project office as a counterpart to the Skunk Works manager and his team. It is not a concept easily adopted after years of working within the system. There has to be an all-out commitment, or the method will not work.

When there was not an “all-out commitment” to work within the basic system, the differences in results were startling.

At the time the Cheyenne contract was cancelled, 145 Army personnel were involved in the program. In contrast, the total at the Skunk Works for both CIA and Air Force representatives in our U-2 and SR-71 programs did not exceed six people.

It should also be noted that Kelly himself was able to come into at least one operation outside the Skunk Works and implement his system successfully. At one point, he was called into the Lockheed Missiles and Space Company to help turn around an ailing project. Kelly came in and rolled out the same playbook I’ve described to you in this piece. He describes his work on the project, writing:

When Skunk Works principles really are applied, they work. An example of their successful application was development of the Agena-D launch vehicle…The satellite that was to become this country’s workhorse in space was in trouble in terms of design and cost but especially in reliability, which stood at an incredibly low 13.6 percent. I was drafted, in effect, to go up to the Lockheed Missiles and Space Company and fix it. We set up a Skunk Works operation with the company’s design project engineer, Fred O’Green, as head…

It proved again our axiom: If you have a good man and let him go, he’ll really perform. In terms of today’s world, that axiom should apply to women as well. When I first reviewed the Agena project, I discovered that 1,206 people were employed in quality control alone, achieving only that 13 percent reliability factor! It should have been the world’s most reliable vehicle just using the inspection department. That was enough people to design and build the thing.

At the Baird Atomic Company, which made the vehicle’s horizon sensor, Lockheed had 40 people inspecting, coordinating, and reporting. Yet Baird had only 35 people building the instrument. We resolved that situation by returning responsibility for the product to the vendor. For example, I telephoned Walter Baird personally since he and I had worked together on a number of other Skunk Works projects. He immediately agreed to pick up his end of the log.

Kelly estimated that the changes saved the government at least $50 million in costs and led to completing in nine months what had been scheduled for 18. 350 drawings had been made instead of the projected 3,900. And quality control personnel had been “slashed” to 69. The operation was now able to output design drawings in a day rather than a month.

Ben Rich had this to say about Kelly’s turnaround of the Agena operation:

The president was already spending a billion dollars in covert funds on the Agena rocket that would boost our first spy satellite into orbit. Bissell was in charge of that program, too, and the first twelve test firings had all been failures. Lockheed’s Missiles and Space Company in Sunnyvale, California, had that contract, and Bissell asked Kelly to evaluate and reorganize their operation. Kelly set up a mini Skunk Works and, coincidentally or not, the thirteenth test shot was a success.

Many claim to have copied Skunk Works in its heyday. But few ever truly did.

A Different World

In many ways, times have changed. Generals can no longer have an aircraft development contract written up and sent out in a few hours. Lowest bidder subcontracts might be required before an outfit like Skunk Works has a new kind of fuel made. Many think the management of public companies is much more short-sighted than it was in the 1960s. The list goes on.

The writing of Ben Rich himself emphatically demonstrates how much these changes haunted him. Throughout his book, he routinely mentions things like nightmares regarding corporate bean counters. In one breath he tells us of the best idea his Skunk Works would ever produce. In the next, he mentions how the Lockheed bureaucracy might threaten the idea being realized. He writes:

I wish I could claim to have had a sudden two a.m. revelation that made me bolt upright in bed and shout “Eureka!” But most of my dreams involved being chased through a maze of blind alleys by a horde of hostile accountants wielding axes and pitchforks.

And these were not small, nagging fears. Ben Rich’s tenure as head of Skunk Works saw the Lockheed and DC bureaucracies creeping in from both sides. At one point, he lobbied Lockheed management to take on a relatively risky production contract for the F-117 sooner rather than later. The idea was only green-lit with much skepticism. Rich writes:

“They’ll want at least one hundred bombers, and we’ll be looking at tens of billions in business. So what’s this risk compared to what we can gain later on? Peanuts.”

It was not a very happy meeting, and the conclusion reached was reluctant and not unanimous. The corporate bean counters insisted we install a fail-safe monitoring and review procedure that would sound the alarm the moment we fell behind or hit any snags. “Above all, no nasty surprises, Ben,” Larry Kitchen warned me.”

The Gross brothers and Hall Hibbard were gone. Kelly Johnson had been a living legend who routinely turned down Lockheed’s CEO position. His freedom and insistence on the same for his Skunk Works was tolerated by subsequent generations of executives throughout his career. But by the end of his career, many in DC and Burbank had little patience for him. They would not be so lenient with his successor.

Ben Rich’s Skunk Works — despite proving itself with its inspired F-117 project design — was being watched. He recounted:

An independent engineering review team, composed entirely of civil servants from Wright Field in Ohio, flew to Burbank to inspect and evaluate our entire program. They had nothing but praise for our effort and progress, but I was extremely put out by their visit. Never before in the entire history of the Skunk Works had we been so closely supervised and directed by the customer. “Why in hell do we have to prove to a government team that we knew what we were doing?” I argued in vain to Jack Twigg, our assigned Air Force program manager. This was an insult to our cherished way of doing things. But all of us sensed that the old Skunk Works valued independence was doomed to become a nostalgic memory of yesteryear, like a dime cup of coffee.”

He was largely right.

Johnson shared an anecdote in his 1985 book, noting just how much the defense procurement world had changed in a few short decades. He noted:

Our Air Corps project officer for the XP-38 was a pilot, a young lieutenant, Benjamin S. Kelsey. He was excellent. In those days (1938) a project officer with that rank had more authority than many four-star generals do today (1985). If we asked Ben for a decision, we got it — on the spot.


Times have surely changed in defense procurement. But the reader’s takeaway should not be that Skunk Works’s management playbook was great, but no longer feasible. It is true that many pools of government capital that used to be risk-tolerant and trusting of individual visions are the opposite nowadays. However, there still exist fantastic funders with a deep belief in bright people with ambitious visions. And many of these funders require only common-sense oversight. With capital from phenomenal funders like these, the Skunk Works management playbook can still prove exceptionally effective. Kelly Johnson’s rules regarding limiting bureaucracy, keeping his team ruthlessly small, and doing whatever possible to allow individual genius to flourish helped create a historically great lab.

The heart of what made the lab exceptional is also strikingly similar to what made BBN and CMU’s autonomous vehicle units so exceptional. All three maintained operating structures that were operated like small companies and were aggressively focused on novelty. The CMU group found a way to make a novelty-focused university group operate in a more firm-like fashion. BBN set up a private firm staffed with MIT professors that could only be rivaled in its novelty focus by the most daring of university labs. In Skunk Works, Kelly Johnson found a way to run a research outfit within a corporate bureaucracy like a small firm. He also insisted that the lab spend close to all of its time building planes that were novel and ambitious. When he stepped down he chose Ben Rich as his successor largely because he knew Ben wouldn’t play it safe with the lab. Without that ambition, the lab would be effective but not ambitious. It wouldn’t be Skunk Works.

Ex-Lockheed CEO Roy Anderson recalls Kelly Johnson saying the following when recommending Rich as successor:

Roy, I raised Ben in my own image. He loves the cutting edge as much as I do, but he knows the value of a buck and he’s as practical as a goddam screwdriver.

To Kelly Johnson, you likely couldn’t run a true Skunk Works without both.

On the day of Kelly Johnson’s death, Ben Rich and Lockheed ran a full-page ad in the Los Angeles Times. As Ben described the image, “It showed the logo of our Skunk Works skunk with a single tear rolling down his cheek.”

Pattern Language Tags:

  • Utilizing a contractor made up of individuals with research-style goals and training working within a ‘firm’ structure.
  • Facilitating tool/hardware improvements in a key technology area far from its suspected theoretical frontier.
  • Selecting multiple industry contractors for a trial period before choosing the final contractor. (F-117)

This piece is a part of a FreakTakes series. The goal is to put together a series of administrative histories on specific DARPA projects just as I have done for many industrial R&D labs and other research orgs on FreakTakes. The goal — once I have covered ~20-30 projects — is to put together a larger ‘ARPA Playbook’ which helps individuals such as PMs in ARPA-like orgs navigate the growing catalog of pieces in a way that helps them find what they need to make the best decisions possible. In service of that, I am including in each post a bulleted list of ‘pattern language tags’ that encompass some categories of DARPA project strategies that describe the approaches contained in the piece — which will later be used to organize the ARPA Playbook document. These tags and the piece itself should all be considered in draft form until around the Spring of 2024. In the meantime, please feel free to reach out to me on Twitter or email (egillia3 | at | alumni | dot | stanford | dot | edu) to recommend additions/changes to the tags or the pieces. Also, if you have any ideas for projects from ARPA history — good, bad, or complicated — that would be interesting for me to dive into, please feel free to share them!

1 Ben Rich noted that around 100 servicemen may have already been lost on intelligence missions like this to this point.

2 Kelly believed the balloons would have to be about one mile long to achieve this altitude with the present technology

3 This was all done for something like $800,000, which is less than $10 million today.