Three ways HR can benefit from 'skunk works' to help tackle COVID-19

Businesses and their HR teams can take advantage of 'skunk works' to improve people management outcomes during challenging times, writes UNSW Business School's Karin Sanders

Some organisations have long utilised special decentralised units called 'skunk works'. These are flexible groups empowered to work rapidly with minimal management constraints, to address technological challenges affecting their products and services. But skunk works teams can also be assembled to generate solutions related to people management.

The COVID-19 pandemic is a stark example of how swiftly organisations need to respond to rapidly evolving HR-related challenges such as large-scale workforce restructuring and layoffs, physical distancing and an overall shift to working from home, says Karin Sanders, Professor of Organisational Behaviour and Human Resource Management in the School of Management at UNSW Business School.

In a recent paper, Structuring for innovative responses to human resource challenges: A skunk works approach, Prof. Sanders and colleagues have found that skunk works can lead to rapid and effective responses to challenging times, by complementing and extending the capabilities of established HR structures and processes that are better-suited to routine HR decision-making.

1. Skunk works to ensure effective people management during a crisis

Today, organisations face a growing number of unanticipated HR challenges that require drastic measures, starkly exemplified by the current COVID-19 crisis. Rapid adjustment by HR is needed, as organisations react to travel bans and quarantines, large-scale workforce restructuring and layoffs, physical distancing and an overall shift to remote working. But the current crisis is by no means the only example of situations that require the HR function to be flexible and responsive. 

The skunk works structure consists of seven characteristics or steps that HR leaders may wish to consider:

1. Isolation from the central organisation
2. Customer needs centre stage
3. Focus- directing attention towards the matter in hand
4. Planning
5. Trusted project manager
6. Cross-functional teams
7. Leveraging overlaps across the expertise and networks of team members

Adopting this process extends the capabilities of established HR structures and processes that are better suited to 'normal' (i.e. routine and recurring) HR decision-making. People engaged in skunk works can act swiftly to deal with an opportunity, threat or concern as it happens because they don't need to conform to rules, procedures or daily expectations.

2. Skunk works can quickly transfer to the world of HR 

Skunk works can be an effective way for organisations to respond in a timely and innovative manner to external threats and opportunities in the world of HR. Special purpose teams of individuals with relevant expertise may be assembled to generate solutions related to people management.

Organisations can deploy a skunk works approach on demand when in need of innovative and urgent solutions; a rapid and effective response when faced with a sudden, unexpected event, shock or opportunity. However, some critics have argued that skunk works represent a temporary solution ('innovation by exceptions') and that ideally, organisations need to redesign themselves to be more systematic about innovation.

Ideally, skunk works should be seen as one tool in an organisation's arsenal that can be used to improve flexibility and agility. They are not a replacement for more rigid organisational structures but intended instead to complement and enrich broader functioning.

Sany Group case study: One example a team adopting a skunk works approach to solve HR challenges is Sany Group – a large Chinese company specialising in heavy machinery – profoundly affected by the COVID-19 pandemic, which caused significant strain for the group to meet the increasing demand for products with only 50 per cent of its employees available to go to work. Even when local governments' lockdown orders relaxed, the firm had to manage and minimise the risk of infection for its 30,000 employees.

To address these challenges, Sany group adopted a skunk works approach:

• It formed a cross-functional team that included members of different divisions (such as HR, sales and operations) as well as trusted managers including the president and vice-president.
• The team was isolated in that they worked outside standard timelines and report lines.
• Some of the outcomes include:  setting up a daily coronavirus reporting mechanism, issuing a coronavirus prevention manual, and developing a group-wide centralised online hub. These deliverables helped the group to protect its employees and respond to the increasing demands for its business.

Sky Group case study: Another example is Sky Group, a European entertainment and media company, in which its learning and development (L&D) team of the UK branch adopted an HR skunk works approach to respond to the drastic industry changes that required the development of speedy, just-in-time, L&D solutions for the changing priorities of the group:

• They formed a taskforce isolated from the rest of the HR division, with a trusted manager (Head of People Engagement & Development).
• They used "sprint teams" to develop minimum viable products. 
• The taskforce had no predefined roles, but a list of tasks which members were voluntarily assigned to.
• They took advantage of cross-project overlaps.
• The sprint teams focused on end-user needs (i.e. the learners) and looked for continuous feedback.
• The L&D team has since quintupled its support to managers at a much lower cost than its prior traditional approach. Moreover, 60 per cent of managers engage in online L&D activities quarterly, and the majority of employees report having a higher amount of developmental opportunities in the workplace.

3. Skunk works vs other HR methods 

HR departments today have to address more complex and differentiated problems than in the past. As such, specialised knowledge and skills are required for specific ongoing HR activities. Firms use specialised HR sub-units for recruitment and selection, training and development, and compensation, and also assign business units/departments an HR partner that delivers more tailored HR services. 

However, while these diversified HR structures help firms to respond to various routine needs, different approaches to integrating or structuring are likely to be required in situations that are unique and unusual. Skunk works may be one way in which HR can rapidly aggregate and integrate data from different and specialised HR activities to provide an accurate and comprehensive view of, and response to, a specific situation.

HR skunk works are most likely to be formed in environments characterised with volatility, uncertainty, complexity, and ambiguity, where conditions are so unprecedented, disruptive, and rapidly changing that they require special attention outside normal operations. The teams may vary based on the scope, duration and scale of the situation. For example, the impact of the COVID-19 pandemic is unprecedented, dynamic, global, long-term, and large-scale for almost all organisations. 

The skunk works approach adopted by an organisation in response would likely have broad, cross-functional teams led by high-profile project managers to garner the authority needed for fast (re)action. For other events, a more focused group, stretching over a particular period until the organisation as a whole revises its operation, would seem to make sense.

For more information, read Structuring for innovative responses to human resource challenges: A skunk works approach or contact Karin Sanders, Professor of Organisational Behaviour and Human Resource Management in the School of Management at UNSW Business School. This article was originally co-authored by: Michal Biron, University of Haifa, Israel; Helen De Cieri, Monash University, Australia; Ingrid Fulmer, Rutgers University, USA; Cai-Hui (Veronica) Lin, University of Queensland, Australia; Wolfgang Mayrhofer, WU Vienna, Austria; Margarita Nyfoudi, University of Birmingham, UK; Karin Sanders, UNSW Business School, Australia; Helen Shipton, Nottingham Trent University, UK; and Jian Min (James) Sun, Renmin University, China.