The Optimal Project Portfolio: Career Consequences of Content and Collaboration Specialization

Abstract

Research on careers often focuses on understanding the sequence of jobs that people move through. In project-based organizations, though, different career trajectories tend to reflect differences in the kinds of projects that people work on over time. In this paper we explore two aspects of the project portfolios that people assemble – variety in the content that they involve and variety in the collaborators worked with. Drawing on theories of human and social capital and careers, we propose that increased diversification in both the kinds of projects that an employee works on and the collaborators that they work with are likely to lead to faster promotion. We also suggest that the effects of increased content diversity and collaborator diversity are likely to offset each other, so that the benefits of content diversity are less when employees work with a greater variety of collaborators. We explore this question using project data from a services organization. We leverage variation in client demand as an exogenous source of variation in project portfolios to generate instruments for project variety. We find that increased diversification in content and collaborators is associated with increased promotion and that their effects do offset each other. We also find strong non-linearities in the effects, as increases in content diversity show strongly diminishing returns, while returns from collaborator diversity are highest for those who have the most collaborators.