In a recent paper, Bridge Methods: Using a Balanced Project Practice Portfolio to Integrate Agile and Formal Process Methodologies, my co-author and I dug into how nearly every methodology, be it formal or agile, allows if not requires customization to the set practices used throughout the software development lifecycle (SDLC). We call the collection of practices a portfolio of project practices much like a financial portfolios. Like financial instruments, you are investing in each practice with hopes of a positive return. Additionally, each practice carries with it some amount of risk and past performance does not guarantee future performance.
More interesting to me is that, like investment portfolios, through the careful combination of practices you can both increase return and reduce project risk. In the world of finance this is well documented as the efficient frontier. In it’s simplest terms; carefully adding the right amount of high risk, high return stocks to typically low risk, low return bonds creates a “balanced” portfolio of investments.
Applying the same principles to a portfolio of project practices
we can add carefully selected high risk, high return practices such as organizational change to historically low risk, low return practices such as training to create a balanced portfolio of project practices.
This is a critical element of project recovery. When an underperforming practice is causing the project to falter we can use an off-setting practice to address the problem. It’s just that simple … well, ok. It’s just the underlying concept of a more complicated process. But I will go into the application of this as it applies to your projects level of acceptable risk, using classes of practices to select off-setting practices and just how we work with the vast web of possible practices in my next few blogs.