Volvo Penta introduced the sterndrive in 1959. While the idea of the Aquadrive was first conceived by Jim Wynne, formerly of Kiekhaefer Marine, it required Volvo Penta’s engineering and product development team for it to become a reality. The company’s involvement helped establish it as a place where big, new ideas flourished, and seeded its culture of serial invention.

Consider the past 40 years. Starting with the Duoprop in the early ’80s and carrying forward through the IPS inboard drive system, the forward sterndrive and the self-docking yacht (to name a few), Volvo Penta has an impressive track record of market-altering introductions. This is not an accident. The company has evolved a unique development approach that celebrates creativity and structure.

“We really have two cultures, two structures meeting,” says Martin Bjuve, president of Volvo Penta of the Americas. “There’s a very creative environment, and then when we decide to run with a project, we have a very formal way of taking products to market. Those are the two cornerstones for our success putting innovation in the market time after time.”

As the company looks to the future, it’s altering its innovation playbook to meet the whipsawing demands of the current moment. In other words, at Volvo Penta, even the innovation process is subject to innovation.

The Old Way

“The history of innovation is really in everything,” says Peter Granqvist, Volvo Penta’s chief technology officer. “You really feel that it’s in people’s minds, and one idea feeds the next, so we always have something new in the line. We allow creative thinking, and we have a very advanced test facility where we can try out an idea quickly and see if it flies.”

Bjuve compares Volvo Penta’s setup to the one at Google, where any employee can propose a project. If they can get executive buy-in, they will receive time and resources to develop it. “We make sure that people are recognized and incentivized for coming up with new ideas,” says Johan Wästeräng, Volvo Penta’s vice president of product management.

That recognition is about more than money and promotions. “We really hands-on foster a creative culture in the company to work with innovation,” Bjuve says. For instance, many of the employees are boaters, and even those who aren’t are encouraged to use the company’s boats in their free time so they can draw ideas from their experiences.

“It’s an iterative process,” Granqvist says. “Things build on each other, processes combine. We try not to steer it too much. We let ideas flourish, and it really happens out in the organization because people want to do good. Even if we can tell that the timing for an idea isn’t right, we allow it to continue because you never know what will develop. Even if only one in 10 flies, we’re happy because we know that one will create success. You have to have a holistic view and keep ideas alive.”

As projects develop, members of the executive team check in on a monthly basis, noting the progress and evaluating the idea’s prospects in terms of scope, cost, quality and other factors. “We don’t want to put something out just for the sake of having something new. We really want to make it better,” Granqvist says.

When the executive team decides a project has potential, the project moves to a phase of advanced engineering. More testing and development follow. The idea is also shared internally and, sometimes, externally to get more feedback. “We have a close relationship with our customers, and we have regular meetings with them at our test site,” Wästeräng says. “It’s a very important part of the process.”

Volvo Penta’s status as part of the multinational Volvo Group gives it a bit smaller entrepreneurial context, which feeds that innovative culture. The status also helps when it comes to the development stage. Around 10,000 of the group’s employees from across automotive, trucks, construction and the other divisions work on the Gothenburg, Sweden, campus, which also houses most of the product development personnel. “In a three-minute walk, we can talk to anyone in this amazing pool of experts,” Granqvist says. “If we want to learn about any of these areas, it’s very easy. And we can leverage all their innovations.”

Future Tense

So what does the company that focuses so much on innovation see coming down the waterways? Electric power for sure, although the technology’s introduction will be segmented, starting with uses where it makes the most sense (sailing, ferries, dayboats). “Sustainability has been our guiding star for years and will continue to be in the future,” Bjuve says.

What else? Automation of the user experience: Everything from remote monitoring of systems to autonomous driving will flourish because boaters are changing. “Globally, a lot of new boaters are coming into the market,” Bjuve says. “A lot of boaters are coming back to boating, but above all, we’re starting to see [new] generations coming into boating.”

This new crowd expects a simpler, more carlike experience, an expectation that feeds into Volvo Penta’s Easy Boating initiative. That catchall comprises things like the company’s multifunction remote fob, fully integrated touchscreen dash and joystick control.

Meeting new consumer needs is also driving the changes to Volvo Penta’s innovation process. “The speed of disruptive technology and customer expectations are moving faster,” Granqvist says. “We can’t start now and think whatever we put out in a few years will still be relevant. We have to keep pace.”

The first stage in Volvo Penta’s process — the creative atmosphere and exploration of ideas — remains the same, but the more formal development program has been updated. It now starts with what the company calls concept exploration, which means sharing an early idea with boaters, colleagues and builders to get feedback, even though the company may have no plans to bring the product to market.

Next comes the market pilot step, which is when engineers work with a few customers to test a product on their vessel, creating a chance to learn more about the product and user expectations.

Finally, live launch occurs when Volvo Penta is close to putting out the product but sill tweaking it. This step tests the product among a larger group while there’s still time to make changes before a full launch.

This new system has already played out, with Volvo Penta’s self-docking system. In 2018, the company did a demo of the technology during a stopover of the Volvo Ocean Race, and released a video.

“The video showed our intention and helped us gauge if the market was ready for that technology,” Bjuve says. “After that demo, we did more testing and refined it further. The self-docking system that we will introduce soon will not be the same technology that you saw in that video, but that version of it and the feedback were a step in the process.”

The result is a significant innovation that evolves in real time and meets a latent need, rather than an idea developed in a lab that grows outdated in the years it takes to go from the drawing board to the showroom floor.

Sure, the old system produced a lot of great stuff, but at Volvo Penta, they just can’t stop trying to make things better. 

This article was originally published in the November 2020 issue.