Globally, the leading car manufactures are competing against each other over the implementation of new technologies, such as autonomous driving, vehicle connectivity, electrification, and shared mobility.

As cars steadily become “computers on wheels”, Agile management is spreading from software development to the whole firm.

Volvo Cars has around 40,000 employees and produces around 700,000 cars per year.

The Forbes Journalist, Steve Denning asked Anna Sandberg, the Head of Continuous Improvement & Change at Product Creation, Volvo Cars in Gotherburg, Sweden about her role and Agile journey at Volvo Cars.

Anna Sandberg: My arrival at Volvo Cars in September 2017 coincided with a decision by Volvo top management to embrace Agile development in software. Initially, my job was to lead the implementation of Agile in the software community. But after six months, my assignment expanded to cover the whole product range, both hardware and software.

Volvo understood that cars were becoming “computers on wheels”. We needed methods that were suitable to that purpose. We had been trying to develop the physical car and then add the software later. We saw that to build these “computers on wheels,” we needed to develop the software and hardware at the same time in an integrated fashion. Initially it was hard to get people to understand this shift. Even today, we need to keep reminding ourselves of this necessity.

Like many companies, Volvo Cars had for some years had a bottom-up Agile movement. There were individuals and software teams that had been attracted to Agile for many years. But Volvo Cars hadn’t managed to scale those efforts. A couple of initiatives had been started, including training in Scrum. But the activity was scattered and it wasn’t happening in a coordinated fashion at scale.

The Goal Of The Agile Transformation

SD: What was the objective of the Agile transformation?

AS: At the start, we talked about speed and responsiveness. We knew that things were going too slowly compared to changes in the automotive world. The automotive industry is currently going through a significant transformation that is being driven by changing consumer behaviors, technology shifts and digitization. Furthermore, there was also a concern about quality. In one of the platforms, the quality was at a level that we had never seen before. To handle this situation, we saw that we would have to do things differently. We knew we had to implement more modern management methods to handle the future development of our cars.

Agile In The Automotive Industry

SD: The automotive industry is striking for having strict calendar cycles. The next model will be delivered at a certain date, come what may. It is decided. It is fixed. It will happen then. “The new model must come out exactly two and a half years from now, that is to say, May 5, 2022.” How prominent is that thinking in Volvo Cars?

AS: This is true of all the automotive firms. The reason is that we have to plan production starts. We have to order everything that we will need so that we are ready for the start of production. All the materials have to be in place at the right time. We have to pre-order a long way in advance even as we try to do this as late as possible. Otherwise we risk running into massive problems with supply flows.

Consumers don’t want to spend a lot of time selecting the features they want and then wait ten months to get the car. They want to be sure they get all the good stuff in the car at the outset.

So we need to rethink what we do and how we do it and how we plan our work. This is ongoing in the car industry all around the world. In the car industry, there is a tradition of having to have everything locked down a year in advance. But in the future cars, when software is totally dominating, you know it will be out-of-date when it is delivered if development takes too long

Thus when we were developing the speech functions in the car, we found that we had installed functions that people didn’t use as expected. That was partly embarrassing and partly very educational for us. We saw that we had to change our development approach.

We also have to be collaborating with our partners. We can’t do everything ourselves. We collaborate with Google for instance. But we are also steadily doing more software in-house. We are more selective about which matters are strategic that we want to keep in-house. Of course, the software code is part of a much bigger system. So our partners also have to be part of the overall system.

The Status Of Agile At Volvo Cars

SD: So overall, what’s the status of the Agile journey at Volvo Cars?

AS: We officially ended the basic Agile transformation phase in December 2019, after two and a half years of Agile transformation work. But the Agile journey continues. We now say that we are entering the phase of “continuous improvement.” We will optimize and improve the system continuously. We will build up a system as we build up the teams, identifying impediments and seeing how to fix them, or escalate them so that they get fixed at the next level.

We are putting more emphasis on Lean thinking, with continuous improvement and flow. We value flow mapping. We are continuing to evolve the SAFe system. We expect to be exploring all aspects of Agile in more detail. We will be much more data-driven. We will have more performance dialogues on where we are going and discerning trends. We understand that we have lots of challenges in front of us to optimize the system that we now have in place.

SD: Is “Agile” a good word today in Volvo Cars?

AS: My take is that “Agile” has changed from being a bad word to a word that is accepted to explain what we are doing. It’s not controversial anymore. That’s where the journey has taken us. But we still have people who have not understood, or who hesitate, or who ask questions. But the majority have accepted the change and are trying to figure out the practical implications for themselves: “How do I act in the best way in this mode of operation and then make the change?”

We are now in a phase where we see problems, that is, opportunities for improvement, all over the place. We have come to realize that these problems are not the result of Agile. It is Agile that has enabled us to see all those problems as opportunities for improvement so that we can start acting to take advantage of them. That is our challenge.

Overall, we see ourselves as having just completed the basic steps in our Agile transformation journey. We are now pursuing continuous improvement. We are on a journey and we know the journey must continue. We like to say that we have made enough progress on Agile to understand the ways in which we are not yet Agile

Source: Forbes, 2020