How a Fortune 500 aerospace company suppressed the reusable rocket concept in 1990—and lost a $14 billion market to competitors who listened

By Eagle Sarmont

In 2024, a major aerospace contractor quietly put its launch vehicle business up for sale. No buyers emerged. The reason was simple: their expendable rockets had become obsolete, displaced by reusable launch systems that now dominate 80% of the commercial market. The technology that ended their decades-long industry dominance? A concept their own engineer had developed and validated in 1988—then systematically suppressed for threatening the status quo.

I was that engineer. And the pattern that killed my work is killing innovation in organizations across every sector today.

The Technical Breakthrough That Nobody Wanted

After seven years of analysis on commercially available materials and proven aerospace principles, I had solved what the industry considered unsolvable: making Earth-to-orbit spaceflight economically viable. The solution combined a reusable first-stage rocket with an expendable upper stage—a hybrid approach that could reduce launch costs by 60-70% compared to fully expendable systems, while avoiding the technical impossibility of

single-stage-to-orbit vehicles.

The orbital mechanics expert confirmed the calculations. The propulsion department head validated the feasibility. The technical case was sound. The business case was compelling: as launch costs dropped, demand would surge, creating a self-reinforcing cycle toward full reusability and eventually routine space access.

What happened next reveals why established organizations consistently lose to insurgent competitors despite superior resources and market position.

When Individual Innovation Threatens Institutional Identity

My direct manager's response to the validated concept wasn't curiosity or strategic interest. It was anger. "It was not my job to come up with ideas," he told me. "That was his job. My job was to make his ideas into reality and make him look good."

This reaction wasn't personal pathology—it was organizational antibody response. In hierarchical structures where status derives from being "the idea person," bottom-up innovation isn't just unwelcome; it's existential threat. Middle managers whose identity and advancement depend on originating strategy cannot afford to recognize superior thinking from below without undermining their own position.

The result is predictable: ideas that don't originate with designated innovators get killed, regardless of merit. Management made clear they wanted no further discussion of the reusable launch concept. It became my after-hours project, presented at industry conferences on my own time and funding throughout the 1990s.

NASA noticed. One Marshall Space Flight Center executive called it "the first believable path to

$100 per pound launch costs" the agency had seen. NASA eventually issued a Request for Proposal specifically designed to fund development of the concept.

My employer—now under different management but facing the same structural dynamics—refused to allow me to bid. They viewed affordable spaceflight as a threat to their profitable expendable launch business. When I persisted, they offered resignation or termination. I took the termination to preserve medical insurance during my wife's cancer treatment.

The Competitive Consequence

Two decades later, an entrepreneur built exactly what I'd proposed: reusable first-stage expendable upper-stage launch vehicles. The Falcon 9 and Falcon Heavy now command the majority of the commercial launch market. The company that suppressed the concept has exited the business entirely, unable to compete on cost.

The numbers tell the story. The global space launch services market, valued at $14.5 billion in 2023, is projected to reach $32.4 billion by 2030. Companies operating reusable systems capture the growth. Those locked into expendable architectures face declining revenue and market irrelevance.

This wasn't a failure of technical capability. The original employer had superior engineering talent, established relationships, decades of launch experience, and vast financial resources. They lost because their organizational structure made it impossible to recognize and act on disruptive innovation originating from the wrong level of hierarchy.

The Hidden Cost of Hierarchical Innovation Models

The pattern extends far beyond aerospace. Research on organizational innovation failure consistently identifies the same dynamic: established firms with dominant market positions lose to startups not because they lack resources or talent, but because their structures reject ideas that threaten existing business models or power relationships.

Consider the typical Fortune 500 innovation process. Strategic direction flows downward from executive leadership. Middle management implements approved strategies. Individual contributors execute defined tasks. Innovation is supposed to happen at the top, with lower tiers providing execution capability.

This model works adequately for incremental improvement within existing paradigms. It fails catastrophically when transformative ideas emerge from unexpected sources—which is precisely where breakthrough innovation originates. By definition, ideas that could reshape an industry don't fit within current strategic frameworks. They threaten not just current products but current organizational logic.

Middle managers face an impossible choice: champion an idea that makes their current business unit obsolete, or suppress it to protect their domain. Organizational incentives—quarterly targets, division P&L responsibility, advancement criteria based on defending existing revenue—all push toward suppression. The manager who kills a disruptive idea this quarter gets promoted. The one who advocates creative destruction of their own business unit gets marginalized.

The Psychological Mechanism Behind Rejection

The resistance isn't primarily about protecting revenue streams. It's about protecting identity. When someone whose role is defined by strategic thinking encounters superior strategy from someone not supposed to generate strategy, the cognitive dissonance is acute.

Middle managers in established organizations typically reach their positions through successful execution within existing paradigms. Their expertise is in optimizing known systems, not questioning fundamental assumptions. When confronted with ideas that invalidate their accumulated knowledge, the psychological response is rejection—framed as protecting the organization from risky distractions.

This explains why technically sound innovations get killed with bureaucratic objections that wouldn't survive scrutiny: "not in the budget cycle," "not aligned with current strategy," "would confuse the market," "distracts from core business." The stated reasons are fig leaves for the actual reason: the idea threatens organizational stability and personal position.

The Strategic Cost Beyond Single Innovations

The immediate cost of suppressing specific innovations is measurable: lost market share, competitive disadvantage, eventual business failure. The systemic cost is larger and more insidious: once an organization establishes that bottom-up innovation is career-limiting, it stops happening.

Talented employees learn quickly. Propose disruptive ideas, face retaliation. Keep quiet, advance safely. Over time, the organization loses not just specific innovations but its innovative capacity. The people capable of generating breakthrough thinking either leave or stop trying.

What remains is a culture of risk-averse execution and incremental thinking—precisely the profile that guarantees disruption by more nimble competitors.

This dynamic accelerates in industries with long product development cycles and high switching costs. Aerospace, automotive, pharmaceutical, and enterprise software companies can coast for years on established market positions while internal innovation capacity atrophies. By the time competitive threat becomes obvious, the organizational capability to respond has eroded beyond repair.

Building Systems That Surface Rather Than Suppress

Organizations serious about maintaining innovative capacity need structural mechanisms that bypass hierarchical rejection patterns. Several approaches show consistent effectiveness:

Separate exploratory units with autonomous authority. Innovation groups that report directly to C-suite leadership and operate outside division P&L structures can evaluate ideas without middle management filter. The key is ensuring these units have real authority and budget, not just advisory roles that existing business units can ignore.

Create protected channels for bottom-up proposals. Formal processes where individual contributors can submit concepts directly to technical review boards—with guaranteed evaluation and response—provide alternative paths around managers threatened by subordinate innovation. For credibility, these must include visible examples of implemented ideas and publicly recognized contributors.

Reward managers for ideas they didn't originate. Compensation and advancement criteria that emphasize capability development and idea cultivation rather than personal origination change incentive structures. Managers should benefit from team innovation regardless of source.

Institute rotation programs that break identity-territory bonds. Regular movement between business units reduces the psychological attachment to defending specific domains. Managers who know they'll rotate into different areas in 18-24 months are more willing to support disruptive changes.

Establish independent technical review for strategic proposals. When individuals with validated expertise advocate for approaches contradicting management strategy, formal

technical assessment by external or independent internal experts can override political rejection. The critical requirement is that these reviews carry decision authority, not just advisory weight.

The Leadership Requirement

None of these mechanisms function without committed executive sponsorship. Senior leadership must explicitly signal that surfacing disruptive ideas—even and especially ideas that threaten current business models—is valued behavior. This means visibly protecting people who propose such ideas from retaliation, rewarding managers who champion innovations they didn't originate, and occasionally overriding middle management to implement bottom-up proposals.

More fundamentally, it requires acknowledging an uncomfortable truth: the organizational structures and management practices that drove past success often prevent future adaptation. Hierarchy, clear reporting lines, predictable processes, and execution discipline are valuable for scaling known business models. They become liabilities when the fundamental model needs to change.

Organizations that maintain innovative capacity across decades build dual operating systems—one optimized for executing current business, another for exploring and validating potential futures. The exploration system must have genuine autonomy and authority, not just permission to generate reports that execution-focused managers can ignore.

The Market Verdict

The aerospace contractor that suppressed reusable launch technology spent the 2010s watching competitors capture market share with systems they could have pioneered. By 2024, their launch business had become unsellable—potential acquirers saw no strategic value in obsolete technology and concluded revenue would continue declining.

This outcome was neither inevitable nor surprising. It was the predictable result of organizational systems optimized to reject bottom-up innovation. The technical capability existed. The market opportunity was clear. The barrier was purely structural: a management culture that couldn't recognize valuable thinking originating from the wrong organizational level.

Every established organization faces this challenge. The question isn't whether disruptive ideas will emerge from unexpected sources—they will. The question is whether organizational systems surface and evaluate them, or suppress and ignore them until competitors turn possibilities into market-dominating realities.

Looking Forward

The commercial space launch market will likely reach $50 billion by 2035, with continued growth driven by satellite deployment, space tourism, and eventually off-world manufacturing.

Companies operating reusable systems will capture this growth. Those locked into expendable architectures have exited or will exit.

The broader pattern applies across industries. Electric vehicles, renewable energy, artificial intelligence, biotechnology—every sector faces fundamental shifts that established players with superior resources somehow fail to lead. The technical capability exists. The market opportunity is visible. The barrier is organizational: structures that reject innovation threatening current business models or power relationships.

Winning organizations in the next decade will be those that solve this problem—not through innovation theater or incremental process improvements, but through fundamental restructuring of how ideas are surfaced, evaluated, and acted upon regardless of origin. The technical challenges are solvable. The organizational challenges determine who solves them first.

Eagle Sarmont is a retired aerospace engineer and inventor of the Non-Rotating Skyhook and Reusable First-Stage Expendable Upper-Stage Launch Vehicle concepts. His work was presented at multiple aerospace conferences throughout the 1990s and later validated by commercial implementation. He holds a degree in aerospace engineering and spent two decades in advanced aircraft and spacecraft