Speeding up Development Projects’ Investment Decisions in a Fast-Changing Environment

Abstract

The importance of quick improvements of products and processes is growing more important as markets move faster each year. In order to ensure that product offerings are competitive, improvements of products and processes need to be launched quickly, which requires fast development and resolute decision-making. Development projects with respect to products and processes need to proceed fast to provide decision-makers with enough basis to bolster managers’ risk-taking regarding given decisions. In autumn 2020 Volvo Cars began looking into a radical new process for constructing body structures. The new manufacturing process entailed casting large parts of the body in aluminum instead of traditional stamped and joined steel sheets. This project was named “Mega casting” and had the potential to improve both manufacturing efficiency and cost significantly. The mega casting project quickly developed and reached the stage of board of directors’ decision significantly faster than comparable development projects. The aim of this study was to explain how investment decisions in development projects can be taken quickly from examining how the mega casting investment decision could be taken so quickly in comparison to other development projects of similar impact at Volvo Cars. A three-stage method was employed starting with an initial data collection of formal documentation and initial interviews. This was followed by a survey to quantify the importance of the initial findings. Lastly, a secondary round of interviews was conducted to deepen understanding in key areas regarding speed. 31 success factors enabling the speed of the mega casting investment decision were identified from initial interviews. Based on the survey result eight of these were further investigated in secondary interviews. The results showed that the mega casting quickness was a result of many interrelated individual, organizational, economic, and strategic factors. From the mega casting project, the most impactful success factors enabling the speed of development projects’ investment decisions were: • Project gave advantages to all essential departments • Project aligned with strategic ambitions • Large size and impact of the project • Newsworthiness and innovativity of the project • Continuous and transparent communication with management • Well-constructed development team • Supportive managers • Fast follower project of industry influencer Beyond these findings it also emerged that the mega casting project differed from other development projects at Volvo Cars. Differences were found in the workflow, both of foregoing frameworks and devoting full-time to a single project, as well as the investment decision relying on longer-term factors. Lastly, agile workflow within the mega casting project was examined, however, no conclusive evidence for agile workflow affecting the speed of the mega casting project was found.