How to Resize Thumbnails

I am having a “Latest Project” bar on the homepage. There are little thumbnails that link out to the individual project pages. I kept trying to change the “Featured Image” to make sure I have at least some readable graphic in the thumbnail. But neither cropping the image nor changing the image will have any impact on how the thumbnail displays. How can I adjust the thumbnail picture on this bar?

Note, I am able to put a completely different image in there. I just can’t get the image to look right. What am I missing?

Thanks!