Building Options at Project Front-End Strategizing: The Power of Capital Design for Evolvability

Manuscript Summary

Capital projects are undertakings that invariably require massive investments, take many years to design and deliver, and produce outputs that are expected to operate for several decades. During project delivery and operational lifetime, the functional and operational requirements are likely to change. To make the project outputs economically adaptable to foreseeable change in the future, sizeable investments in design flexibility may be required upfront at front-end strategizing. Under uncertainty about the future and tight budgets, multi-stakeholder project teams must trade off additional investments in design flexibility at the risk that these investments may not pay off if uncertainties resolve unfavorably in the future. ...