How to Create a Skunkworks and Outpace the Competition

Olin Hyde
November 30, 2016

Do you know what a skunkworks is and why a B2B company needs one? If you said no, you’re not alone.

A skunkworks supports out-of-the-box thinking. It shoots for the moon with experiments without any consequences from failure. These experiments, if successful, can help B2B companies stay on the cutting edge of things.

More important, it can help create a sustainable competitive advantage in an industry.

But most B2B brands don’t have a skunkworks, and that’s a problem—especially if you’re intent on becoming a market leader.

As B2B influencer Meta S. Brown says, “One of the things that separates the most successful online retailers and fundraisers from the rest of the pack is their relentless use of testing.”

So if you’re goal is to become a market leader, read on.  You’ll learn how you can create a skunkworks at your B2B company and stay one-step ahead of the competition.

Below are five tips on building a skunkworks that can speed the process while staying within budget:

  • Make sure it’s actually a skunkworks

Some companies think that basic split testing is a skunkworks. It’s not. There’s a big difference between a B2B skunkworks and simple B2B analytics and testing.

As B2B influencer Nicole Fallon Taylor explains, “When you run an A/B test, you’re comparing two different versions of a campaign – whether it’s a marketing email, a banner ad, or just a website page – to see which one is more effective with your target audience.”

So while you may use split testing at some point, a B2B skunkworks is about trying what’s never been tried before. It’s about attempting the unheard of and the insane in the hopes of making a breakthrough discovery.

Keep this difference in mind before trying to create a skunkworks.

  • Assign a budget to the skunkworks

How you budget for a skunkworks can make or break one. It’s not enough to set aside a small portion of your marketing budget to fund a skunkworks. With a marketing budget, you generally expect a sizable return on investment.

With a skunkworks, there are no such expectation. You could lose money on a skunkworks for months and even years while waiting for it to pay off. Just ask the 16% of small businesses that don’t track their budgets at all.

But that doesn’t make creating a skunkworks a bad idea. One single breakthrough with a skunkworks could transform a small business into a huge corporation making millions of dollars every month.

The majority of your experiments will fail and you never can tell when something will succeed with a skunkworks. So the money you assign to it should be money that you can afford to lose.

  • Create a team carefully

You have two options when it comes to creating a skunkworks team. You can assigning a dedicated, full-time team to skunkworks projects. Or, you can assign a part-time team. A lot depends on how much manpower you can spare.

And make sure the people that make up your team are your most creative and enthusiastic staff members and that everyone on the team actually wants to be there. You need to get this decision right to get the most from a skunkworks.

  • Monitor the skunkworks

The inherent nature of a skunkworks means that behind the closed doors of a B2B company there is often chaos. Staff members at a skunkworks generally have relatively free reign to do as they please, so things can get crazy.

But that doesn’t mean they should be blowing the budget. So monitor a skunkworks closely. Schedule regular meetings  to check on their progress. And find out what they’re working on and what their goals are.

  • Maintain control of activities

While the skunkworks is a relatively independent part of your B2B brand, you still need to maintain some control of it. Allow it to get out of control and productivity can drop while costs rise.

CEOs sometimes forget that they’re the ones who make the final decision on things—even in a skunkworks. They’re the people who get to decide whether projects continue or not.

So if you’re not happy about a project, put an immediate end to it. Too many CEOs give their skunkworks too much autonomy and it comes back to haunt them later on.

Last Word – Is Your Skunkworks Working for the Better?

It’s always difficult to decide whether your successful with a skunkworks purely because major breakthroughs are difficult to achieve. You need to be willing to lose money on this part of your company for a skunkworks to be successful.

But you also have to be realistic. There’s nothing wrong with putting your skunkworks on hold when busy and re-assigning staff members temporally.

Remember, a skunkworks can place you at the cutting edge in the B2B industry, but it’s also an extra, a bonus. Never compromise the rest of your business because of your skunkworks.

So what do you think is the best way to run a B2B skunkworks?

Further Reading

Lainey Mebust
June 15, 2020
Lainey Mebust
May 29, 2020
Olin Hyde
April 8, 2020
. 5 min read