Novelty and Technical Complexity: Critical Constructs in Capital Projects

Abstract

One of the challenges in project management research is that projects, by definition, are unique. However, the degree to which any project differs from another varies on the basis of a range of attributes. Two industrial facilities that vary by an order of magnitude in size may, in fact, be very similar and experience similar outcomes. However, two identical industrial facilities that are constructed by different contractors may experience vastly different outcomes. In the first case, the two buildings may have the same set of technical characteristics. In the second case, all else being equal, the different outcomes may be attributable to the contractors’ experience with the construction of this type of facility. This paper expands on these two cases and proposes that all projects can be partially defined in terms of two distinct attributes: technical complexity and novelty. The technical characteristics of a project define its technical complexity. The degree of the project participants’ experience with the technical characteristics defines its novelty. The literature from the architectural, engineering, and construction (AEC) industry has long acknowledged the impact of complexity but has not examined the effect of novelty. This is in contrast to research in new product development (which also employs a project approach) where novelty and complexity are recognized as distinct constructs that affect project performance. This paper addresses this gap in the literature. In addressing this gap, the opportunity to expand research grounded in contingency theory is expanded. The paper contributes to the practice of construction management in that achieving superior project performance is shown to require recognition of the distinct impact of these constructs. An analysis of more than 1,300 projects demonstrates that technical complexity and novelty are important characteristics of a project that have distinct effects on project performance.