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` In 2003, Rick Alden launched Skullcandy, a company that develops headphones with functionality and aesthetics based on snowboarding and skateboarding. ` Skullcandy development teams included the heads of industrial design, marketing, and product management, in addition to other creatives, and external sources of inspiration such as Mix Master Mike or Snoop Dogg. ` Because of the firm s small size, most people were involved in several projects simultaneously. The firm also used outside developers for portions of the work. ` Team members did not receive financial rewards for individual projects. Instead, they received recognition at monthly Skullcouncil meetings, and were rewarded annually based on a review. ` 75% of the annual bonus was based on individual performance, and 25% was based on overall company performance.

1. What are some of the ways that Skullcandy s size and growth rate influence its development process? Because Skullcandy is small and growing fast, it relies heavily on collaboration with external parties for its development process. For instance, they use industrial design firms to develop renderings of the products, and they use a Chinese firm to create the stereolithgraphic prototypes, and another Chinese firm to manufacture the end products. Additionally, Skullcandy s small size means that most people have to work on multiple development projects simultaneously; there simply are not enough people to commit team members to a single full-time project.

2. How would you characterize Skullcandy s new product development team structure? Skullcandy s teams appear to be a hybrid of the lightweight and heavyweight typologies described in the chapter. They are more like lightweight teams in that most team members have a clear functional affiliation and only work on any given project part time. On the other hand, the teams appear to have senior managers as dedicated project managers. If Skullcandy were not so small or growing so fast (see discussion under #1 above), it might adopt a team structure that more clearly resembled the heavyweight teams described in the chapter.

` Lightweight Teams Members still report to functional manager. Temporary, and member may spend less than 25% of their time on project. Typically have a project manager and dedicated liaison personnel.

Manager is typically junior or middle management. Likely to be appropriate for derivative projects. Lightweight teams are also best suited to derivative projects but are unlike functional teams because they have project managers (generally junior or mid-level) and dedicated liaison personnel. These teams experience slightly better team coordination and likelihood of success over functional teams.

` Heavyweight Teams Members are collocated with project manager. Manager is typically senior and has significant authority to command resources and evaluate members. Often still temporary, but core team members often dedicated full-time to project. Likely to be appropriate for platform projects. Heavyweight teams are best suited to platform projects. Members transfer from functional departments to be co-located full-time with a project manager (usually a senior manager with authority to command resources, and evaluate and reward team members). The potential impact (e.g. promotions, raises, etc.) of the project manager on members careers creates commitment to project.

3. What are the advantages and disadvantages of having Skullcandy employees serve on several project teams simultaneously? Some of the advantages include: y Talented people can be leveraged on multiple projects y Ideas can be exchanged across projects, permitting a valuable form of crossfertilization. y Each employee gets a better sense of the company s products and technologies. Some disadvantages include: y Employees might be spread too thin, leading to delays y Employees may feel no sense of ownership over any particular project y Too much cross-fertilization of ideas across projects can lead to homogenization

4. What are the challenges associated with measuring and rewarding the performance of Skullcandy development team members? The difficulty of assessing each individual s contribution to a particular project. In this industry (like many others), the success of the final product is based at least as much on aesthetic features as technical ones, which means that the performance of the project cannot really be known until the product is released to consumers. This means that a significant period of time is likely to elapse between when a team member has worked on the project and when its performance is known, raising a host of incentive problems.

5. If you were advising the top management of Skullcandy about new product development processes, what recommendations would you make?