Engineers are natural innovators. You’d think companies would make this easy. Think again.

Gary Starkweather’s laser printer was a billion-dollar breakthrough for Xerox. When his epiphany hit, Starkweather tried to sell his manager on the idea. But putting a laser in an office machine sounded foolhardy and reckless. Starkweather knew lasers and he knew what he was doing. That didn’t matter.

So Starkweather did what engineers have done for over a century in this situation. He launched an unofficial, ‘bootlegging’ project. He still did his regular job. He was an outstanding engineer and he continued to do outstanding work. But he also launched a bootlegging project to explore his idea. He worked smarter to free up time in the natural slack of engineering work. And he gathered his own resources. To build an early document drum, he used an oatmeal canister from home and a shiny piece of aluminum he bought from a local model shop.

When his manager discovered the project, he told Starkweather to stop. Not because Starkweather wasn’t doing his job. His manager just hated the idea. When that directive didn’t work, his manager threatened to fire Starkweather. He even promised to ruin Starkweather’s reputation throughout the optics industry so he would never work again. Yet Starkweather kept at it. It turned out Starkweather was too valuable an engineer to fire. His manager just wanted to kill the project.

Two years later Starkweather had his project far enough along to gain official support. Xerox PARC loved the idea. Starkweather transferred there and worked with other engineers to create the Xerox 9700. The breakthrough product Gary Starkweather is forever known for.

Engineers have been ‘bootlegging’ breakthrough innovation for over a century.

They’ve created breakthrough after breakthrough for their companies. But it’s a risky career move. So it rarely happens.

The reality is, midsize OEMs can’t do breakthrough innovation without bootlegging.

Engineers are operating at full capacity. The ideas are too uncertain to be officially sanctioned. Forget 20% time. There is no time.

Large OEMs can afford parallel innovation efforts to explore breakthrough ideas. Midsize OEMs cannot.

We’ve developed a model that unlocks the benefits of bootlegging while eliminating career risk for engineers.

It’s bootlegging, with two important changes:

First, it’s executive-sanctioned. Management explicitly gives engineers permission to work on any breakthrough idea the engineer believes could help the company. As with bootlegging, engineers need to free up their own time and gather their own resources, without putting delivery at risk.

Second, there’s an embedded catalyst. Someone who has led these projects before. Their job is to provide dedicated support for these projects to protect delivery, protect the engineers, and protect the fragile dynamics that make it work.

This changes everything. Today, fewer than 1 in 1,000 engineers engage in bootlegging because the risk is too high. With this model, the right midsize OEM can see 10–20% of its engineers opt in to these projects within a year.

We call these unofficial skunkworks projects.

The Deal: Management ↔ Engineers. Both sides win.

Managers get a second engine of innovation for hardware breakthroughs, without dedicating any resources or putting delivery at risk.

Engineers get to tackle exciting, possibly once-in-a-lifetime projects, and be forever recognized for making them happen.

Ground rules for engineers.

1. Never create risk.
2. Never let it interfere with your assigned duties.

You can innovate without creating risk. You can work smarter to free up time in the natural slack of engineering work. Engineers have been doing this for over a century. The catalyst is there to show you how.

Let’s be clear: Your company owns these projects. Managers are still managers. Just like with bootlegging.

1. Company retains IP ownership of all “unofficial” work.
2. Managers retain full control over final go/no-go decisions.
3. Managers continue to control all funding and resource decisions.

If you want to work on a breakthrough innovation and own the IP, you need to quit your job and work on your own time. Or launch a startup.

Not every breakthrough innovation is a viable foundation for a startup. Most only make sense in the context of the company you are working for. And not everyone can quit their job to launch a startup.

What unofficial skunkworks projects do is give engineers unprecedented freedom to innovate, without the career risk of bootlegging.

1. Any engineer can launch an unofficial skunkworks project any time they want. During normal working hours.
2. Engineers can work on any project they believe could help the company, regardless of what anyone else thinks.
3. Engineers have complete design freedom over their project. It is their project. They get to make all the decisions.
4. Projects cannot be killed by any manager. Not even the top executive. There are no deadlines or stage gates.
5. Engineers will not be punished or have their careers harmed by working on a project. These are exploratory projects with no expectation of success.

Unofficial skunkworks projects operate under a completely different set of rules than official work. It’s the engineer who frees up their own time and gathers their own resources, so it is their project.

The goal is always the same: Get the project far enough along to win official support. At that point, the normal rules of management take over. But until, it’s the engineer’s project.

Why engineering leaders should embrace this. (But most won’t).

Unofficial skunkworks projects will let you win at breakthrough innovation. No other company can innovate like this. Certainly not the large OEMs. Their innovators are stuck in a lab. Your innovators will be the engineers doing the work—the people closest to the problems, where breakthrough ideas come from.

These projects will energize your team. Even engineers not working on a project will value the freedom. Your company will be a magnet for engineering talent.

Chaos? Not a chance. The projects operate under the radar. Just like bootlegging. Most people will never notice what’s going on. Managers continue to lead their teams exactly as before. Nothing changes. Projects remain unofficial and hidden until they receive official support.

Most engineering leaders at midsize OEMs won’t accept unofficial skunkworks projects, despite the long history of billion-dollar breakthroughs. If you’re the rare leader who can, you can unlock breakthrough innovation—and help your company win.

Ground rules for managers.

1. Never punish or threaten engineers for unofficial skunkworks projects that follow the rules.
2. If you want control over an unofficial skunkworks project, make it official and fund it. Otherwise, ignore it.

Engineers who work on unofficial skunkworks projects take on extra work to try to help your company. It costs you nothing. There’s no reason to punish this. You may not like the idea. But that’s the nature of breakthrough innovation. As Einstein said, “If at first the idea is not absurd, then there is no hope for it.”

Wait a minute, aren’t engineers getting a terrible deal?

Engineers do all the work…and they get nothing? No extra pay? No promise of rewards if the innovation succeeds. No IP ownership? That sounds like a terrible deal.

If you’ve never done a project like this, it might seem like a terrible deal. But lead an unofficial skunkworks project, and you’ll discover some of the most exhilarating work there is. You get to attempt something that’s never been done before—and make a difference in the world. It’s what engineers are meant to do, but rarely get the chance. Get it right, you transform your career.

Not everyone will do this. And that’s okay. But you can expect 10-20% of engineers will opt in. And be forever proud they did.