Creating An Adaptive Project Portfolio

Businesses over the last 30 years have learned to respond to changing economic climates, competitive pressures and market conditions in large transformational steps. Organisational re-engineering and change management – as well as a number of spin-off approaches – have been developed and refined over this same period to enable this incremental step change approach.
Building a Portfolio
Re-making an organisation or a significant business line is a courageous decision and at times is an absolute necessity to maintain profitability or perhaps business viability. However, it’s also an approach fraught with negatives. The first, most important one, is that these significant makeovers often fail to deliver the desired transformational outcomes and, given the business context that often generates them, there is a lot at stake to have them come up short. They often require a significant investment of money, time and energy by both management and staff, so they demand significant results in order provide an acceptable return on that investment.

These sorts of transformational change projects are, more often than not, driven by a negative influencer – a fall in profitability, a loss of market share, a disruptive competitive influence or adverse market conditions. They are really just an attempt to repair the damage caused by the negative influence or business condition. So, regardless of how effective the change process, damage has already been done. Much like the metaphorical “burning platform” of the Piper Alpha disaster, using negative conditions to drive change on such a high stakes scale can mean that your platform is left in ruins.

One of the most significant challenges to the transformational change approach is that the business is often being asked to perform in a way that it is not used to and for which it possesses minimal skills and experience. Busy teams are asked to take on new responsibilities as part of the change project – using time that they are expected to create for themselves and developing skills that they are meant to learn as they go. Managers are expected to lead a very different operational environment than the day-to-day business, often with no reduction in the expectations of their “day job” and no addition time for the leadership that the change demands. The business processes and staff interactions required to create and implement the transformational change are completely different than those required to manage and execute daily business activities. It is like asking a team that has the occasional pick-up game on Saturday mornings to play in the Grand Final. Is there any wonder that when confronted with this unfamiliar, unfriendly terrain that people resist it?

The means for addressing these downsides to the traditional approaches to business change is to approach it in a progressive, proactive manner – be adaptive rather than transformative. By “adaptive” I mean making change a continuous and ongoing part of the way the business operates. Specifically, maintain a constant inventory of projects flowing through the business that are intended to improve the business, or what I call an Adaptive Project Portfolio.

These adaptive projects should include everything from business process improvement initiatives to new product development to market testing of innovative ideas. They should be approached with an experimental mindset where either hypotheses are proven/disproven or ideas are explored to see what value they hold. Also, the projects should be constantly refreshed. Existing projects should be regularly assessed for their value potential and either failed or moved forward toward implementation. A backlog of potential new projects should be maintained then prioritised and initiated as improvement capacity becomes available.

Some would caution against creating “change fatigue” – burning out staff with constant change. In reality, people in business environments where adaptive change is the norm, thrive on the evolutionary momentum – it creates purpose and a sense of progress. It is when change is the result of intermittent major offensives that people become weary of the siege mentality. For software companies this approach is a standard business model. They know that constantly evolving their products, developing new offerings and adapting to changing customer needs is essential if they are to remain relevant and competitive. In the world of capital project delivery, adaptation is the business. What you are building, and the environment you are building in, evolves every single day. Effectively adapting to these changes while pursuing mastery of day to day activities is the secret to creating an engaged and motivated workforce. It is also the secret to successful construction projects.

The benefits of this adaptive approach are outlined below.


The continuous nature of adaptive project development provides the opportunity to be forward-looking and creative rather than reactive. It creates the environment where business opportunities can be explored and operational efficiencies created that increase business value instead of trying to recover from a threat to that value.

Batch size

Rather than trying to re-make the business in large, sweeping transformational steps, you are constantly evolving the business in small batches. The reduction in complexity of smaller projects increases the potential that each incremental change will be successful. By avoiding the “all in” nature of large transformational change initiatives, you no longer have to fear failure because less is on the line. Finding meaningful value in a third to a half of a large number of smaller projects is much better than a 30 to 50 percent chance of success on a single change initiative that may well carry with it the company’s future. It means that you can experiment with uncertain projects and more extreme ideas can be tested. Often, it is in the ideas that are on “the edge” that the real magic happens.

Adaptive upskilling

By running adaptive projects on a continuous basis, project skills and capability are built within the organisation. People learn how to form effective project teams and operate in the adaptive project environment. The collaborative skills necessary to make projects work are learned and developed. The business begins to create process capability around the identification, execution and operationalising of adaptive projects. Importantly, should the business decide (or need) to embark on a major transformational change journey, it’s ready – the business will have already developed the “adaptive muscle” required to maximise the opportunity for success.

Projects as the new normal

When the organisation is constantly carrying a portfolio of adaptive initiatives you create a culture where change, improvement and innovation projects are the new normal for the business. Projects become part of the way the business operates so the disruption and resistance of major change initiatives are eliminated. The organisation learns to move adeptly between adaptive project work and normal business activities with minimal re-shuffling of roles and mindsets.


Maintaining an adaptive project portfolio improves the bandwidth in your organisation for “new” – change, improvement and innovation. From an operational perspective, the lower levels of improvement activity across the business at any given time means that the capacity of your people is better balanced between doing and improving. This expands the focus and engagement that each of the areas receive and yields better business results. Perhaps most importantly, is the increased leadership bandwidth that is created. Building adaptive culture and capability into the organisation means that less management time and effort is required to maintain momentum and motivation – teams will generate their own motivation and business process will maintain momentum. This frees up managers to lead the adaptive process and create strategic direction rather than manage resistance. Also, “leadership” can be better leveraged across the business. All of the business’s people can fulfil a leadership role. They become the source of ideas and innovation on which the projects are founded. The people responsible for doing the work are also responsible for leading the change necessary to improve it.

It is in careful cultivation of an ongoing adaptive project portfolio that the greatest opportunity to engage and motivate employees is created. It affords management the opportunity to tap into the full depth and breadth of their people’s capability to improve and enhance the business value being offered to its customers. Most importantly, it provides a means for building a culture where change and adaptation is in service of excellence instead of recovery.

Questions for consideration:

  • Does your business implement change through a nimble, adaptive approach or a siege mentality?
  • Are project skills and expertise part of your business’s capabilities or does training and cultural development have to be part of any change initiative?
  • Does your business have the bandwidth for “new”?

I would love to hear your thoughts and experiences. Please share them in the comments area below.

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