The interplay of product and process in skunkworks identity work: An inductive model

Research Summary The success of skunkworks often involves nurturing an identity at odds with the parent firm, which may cause de‐identification with the firm and hamper reintegration of team members post‐project. This identity work could lead to market success but organizational failure as skunkworks' members distance themselves from the parent firm tasking the innovation. To explore the when and how of identity work throughout a skunkworks' lifecycle, we studied a skunkworks at an international consumer products company over a 35‐month research window and through post‐hoc interviews some 15 years later. Using a grounded theory approach, we documented the interplay between product (needs) and process (decisions) over the skunkworks' lifecycle, and constructed an inductive model providing important insight to the micro‐foundations of the identity‐based view of competitive advantage. Managerial Summary This study examines how identity work unfolds over time in a skunkworks team created to spur breakthrough innovation. Such teams can develop a strong sense of identity that may in part involve opposition to the parent firm. While this can motivate the team to galvanize around the task at hand, such “othering” may cause de‐identification with the parent and hamper reintegration of team members after the skunkworks is dissolved. Thus, identity work within a skunkworks can lead to both market success and organizational failure. We ground our model in a 35‐month study of an international consumer products company, documenting the interplay between product (needs) and process (decisions) over the skunkworks' lifecycle. We provide prescriptions as to how to mitigate the possibility of these negative outcomes.