Project size is a relative concept. How do we decide if something is large or small? A 150-pound person is big if the person is ten years old. A 150-pound person is small if the person is a professional football lineman. The frame of reference provides the context in which size is determined.
The size of a project is also relative. A $250 million oil refinery expansion is a relatively small project in an industry where billion dollar projects are common. A $250 million pharmaceutical development project or software development project would be considered a large project. The size of a project is determined by the context of the industry and the experience of the team executing the project.
Within the construction industry, firms usually specialize in projects that fall within a defined range. Small firms usually execute small projects and large firms usually execute larger projects. There is a size range for which the company experience, management skills, tools, and work processes are primarily designed. This size range or comfort zone exists for both the company and the members of the project team executing the project.
When a project team executes a project outside their comfort zone, stress is placed on both the tools and project team. When a project is larger than the comfort zone of a company, stresses are placed on the ability to provide experience and appropriate work processes, and the results are typically cost overruns and schedule delays. To mitigate this stress, some companies will divide large projects into smaller projects and execute the smaller projects with separate dedicated staff and resources. The key to success then becomes the coordination of the small projects to behave as if they are one large project.
Copper Mining in Argentina
One example of this process was a copper mining project in Argentina. The comfort zone of the company was projects ranging from $150 million to $500 million. Projects over $500 million were divided into smaller projects. The mining project was estimated to cost a little over $1 billion and the project was divided into three projects, each with a project manager and leadership team. Although the projects shared some resources and reported to an oversight project manager, each project developed a separate execution plan that included a budget and schedule.
When a company is executing a project that is much smaller than the company norm, resources are often misused and inappropriate work processes are utilized. The result often increases the project costs. Some companies with a history of executing large projects have set up a small project group to execute smaller projects. These groups establish a different culture, develop appropriate work processes, and use tools designed to execute smaller projects.
The more the project size is outside the comfort zone of the project, the more stress is created for the project. This is true on both ends of the spectrum. Both smaller and larger projects that fall outside the comfort zone of the project management team will create stress for the project. New skills, tools, and processes will need to be developed to manage the project, and this activity will absorb management time and energy. The higher the stress level created by executing a project outside the comfort zone of the organization, the greater the impact on the complexity level of the project.
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