Episode 35 — Risk Management and WBS With Liliana Buchtik

Episode #35
Original Air Date: 06.06.2017

30 Minutes

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Our Guest This Episode: Liliana Buchtik

World-renowned author, trainer, keynote speaker and consultant, Liliana Buchtik, joins the cast of Manage This via Skype all the way from Uruguay.

Liliana specializes in project management and is worldwide known as an author, trainer, keynote speaker, and consultant. She is the author of Secrets to Mastering the WBS in Real-World Projects-Second Edition published by Project Management Institute (PMI) in the United States. She is the only Latin-American individual whose book was edited and published by PMI. She holds the Project Management Professional (PMP®) and Risk Management Professional (PMI-RMP®) international credentials.

She brings global and diverse experiences from diverse management and project management positions from close to thirty countries in Latin America, the Caribbean, Europe, Asia, and North America. She has worked for leading private, public, and not for profit organizations in diverse industries such as technology, oil and gas, mining, engineering and construction, among others. Liliana holds a bachelor’s degree in Information Systems Analysis, she graduated from the PMI Leadership Institute Master Class in the United States, and also has a diploma in directing people from ISEDE School of Business.

Liliana shares with us her vast amount of knowledge regarding risk management and the WBS and discusses the value of Project Management worldwide.

Favorite Quotes from Our Talk:

"What we need to understand is that to become real world project managers, we need to go beyond the standards.  So it’s probably something that is easier to understand, like in the First World.  But it’s not across the regions that people understand the same concepts."

- Liliana Buchtik

"There’s many studies, not only by PMI, but by other organizations and diverse industries, that confirm that most of the most frequent risks occurring in projects are under the control of the organization.  Not all of them.  So the first thing you need to work with that project management to make sure risk management becomes part of their culture."

- Liliana Buchtik

"A very good way of reducing the amount of uncertainty in the approach is starting by understanding the scope.  So many times you don’t know what to do, and you run to draw a schedule, trying to find out the when and the how when you still don’t know what."

- Liliana Buchtik

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ANDY CROWE ● BILL YATES ● NICK WALKER ● LILIANA BUCHTIK

NICK WALKER:  Welcome to Manage This, the podcast by project managers for project managers.  Every couple of weeks we meet to talk about what’s important to you in project management.  It’s a discussion about where we are and how to get where we want to be.  Our guests include recognized experts in the field who focus on their own experiences so we can share their successes and learn from their mistakes.  We find out how they work and how they motivate others to work.  Whether you are new to project management or a recognized veteran yourself, I think you’ll find we have something for you.

I’m your host, Nick Walker, and with me are the two guys who make this all happen, Andy Crowe and Bill Yates.  And Andy, today we’re going to reach southward into another hemisphere of the Earth to talk with someone who’s well known in every hemisphere.

ANDY CROWE:  Yeah, I’m excited about our guest.  Liliana is a renowned expert and somebody that is going to really be a good contributor to the show.

NICK WALKER:  She’s on the phone with us, all the way from Montevideo, Uruguay – Liliana Buchtik, who’s known worldwide as an author, trainer, keynote speaker, and consultant.  She’s the author of the second edition of “Secrets to Mastering the WBS in Real World Projects,” published by PMI, the Project Management Institute.  She has also written two Spanish bestsellers, including “Secrets to Mastering Risk Management in Real World Projects,” the first and only Spanish book about project risk management.  Liliana shares her knowledge, her experience, and international perspective to audiences worldwide, challenging them with storytelling and real-world examples.  Liliana, welcome to Manage This.

LILIANA BUCHTIK:  Thank you all.  Thank you so much.  It’s a pleasure to be here.  So I’m very excited to share some experiences with you guys and with your audiences around the world.

NICK WALKER:  Now, you speak to groups of all kinds in a number of different settings – corporate, academic, government.  Is there something that they have in common, a common thread that you find among your diverse audiences?

LILIANA BUCHTIK:  Well, those audiences are pretty diverse.  Sometimes I talk with executives.  Sometimes I talk, as you said, with students, or many times with PMO managers or project managers, program managers.  So it’s a pretty diverse audience in diverse degrees of maturity, as well, in project management.  Especially when you’re talking audiences like Latin America, which is one of the focus areas that I work, and you compare that when you speak in Europe or North America, you can appreciate the difference.  You tend to find more maturity, for example, in North America than in Latin America in general.  So we can, you know, we find diverse audiences, diverse levels of maturities.

But I think one thing in common is that I see the growth in interest regarding project, program, and portfolio management across the globe, even at the top levels of the organization.  So I do think there’s something in common for them which is the value behind project management, why they should be applying best practices in project management, and what is in it for them, even with executives.  And so we try to communicate with those executives and managers that project management is not something that you need to spend on when you have enough money.  It’s actually an investment to become more and more effective, even in times of challenges.

ANDY CROWE:  Liliana, we have a joke that a lot of young parents say:  If you wait until you have enough money to have a child, you’ll never have a child.  So a lot of time.

LILIANA BUCHTIK:  Yeah, that’s it.

ANDY CROWE:  If you wait until you’re financially ready to spend on project management, you’ll never invest in project management.  So I think that’s a great point you bring up.

NICK WALKER:  One of the topics dear to your heart, and one that you share quite often and write about, is risk management.  So let’s get into that a little bit.  And I have to admit this is a little bit outside my comfort zone and over my head.  So I’m going to let Bill and Andy take over to ask you some specifics.

BILL YATES:  Yeah.  Liliana, I want to start out at a high level.  When I think about the opportunities that you have with different individuals and organizations and the diversity of experience, what are some of the common mistakes that you see when it comes to practitioners with risk management?  What do you see over and over in these engagements?

LILIANA BUCHTIK:  Well, what I see over and over again is that many practitioners think they know about risk management.  And actually what they know is very, very basic.  Many people think that, because they know the chapter on risk management of the PMBOK Guide, they are gurus in risk management, and they do even training only about that chapter.  And they think that’s the whole world of risk management.  And for me that is just the ABCs, just the very beginning.  You need it.  It’s indispensible.  So the tools that they tend to use are basic.  So you find people saying “I do manage risk.”  And when you take a look at what they are doing, it’s really poor.

ANDY CROWE:  But you know, Liliana, that’s true with so many areas.  You were talking about the PMBOK Guide.  And the point of the PMBOK Guide is it’s a guide.  It’s not – it doesn’t have all of the information in it.  And so you wrote a book years ago on the WBS that I really like.  But if you look at the PMBOK Guide, it doesn’t have much to say about the WBS, the Work Breakdown Structure.  It’s actually very light.  And then you were able to go in and talk quite a bit more about what’s important about the WBS, how to use it, how to do it, why you should do it, things that the PMBOK Guide barely covers.  So it’s true almost in every chapter.  Estimating, it doesn’t really tell you that much about how to estimate.  And yet people can easily believe they know all the details behind it.

LILIANA BUCHTIK:  Yeah, exactly.  And that’s what some people still do not understand, that it’s just a guide.  It’s just a standard.  So my WBS is 170 pages just to support one tool, which is the WBS.  My risk management book is almost 500 pages on risk management.  So it’s a very important foundation.  But what we need to understand is that to become real world project managers, we need to go beyond the standards.  So it’s probably something that is easier to understand, like in the First World.  But it’s not across the regions that people understand the same concepts.

BILL YATES:  Liliana, I really – I love that analogy.  When I think about a 500-page book dedicated to risk management, and then I think about the short section of the PMBOK Guide, that just makes a very clear picture to me.  And this is kind of a follow-up question to that, thinking about these client engagements that you have.  When somebody comes to you, and they’re suddenly overwhelmed with, okay, Liliana, you’ve shown me all these different tools that I need to consider possibly using for our engagement, how do you help them determine the right tool for their project when it comes to risk management?

LILIANA BUCHTIK:  Well, in my risk management book I talk about, like, 77 tools.  I always tell my clients, you will never, ever use 70 tools in your process.  You just need to know all of them once, just to know advantages, disadvantages, and when you should apply each of them.  And one of the very, very funny things that I find all the time is regarding Monte Carlo.  Some people are fascinated with Monte Carlo.  Some of them they don’t even have a clue what Monte Carlo is.  But they see it at the university, or they see it in the books, so they know that the PMP asks many questions about it.  So they believe that risk management is Monte Carlo.  And I’m always telling them, Monte Carlo is just one single tool in risk management.  So I’m always telling them, if you don’t have a good risk management plan, why do you need Monte Carlo analysis?  If you don’t have quality data, historical data, then garbage in/garbage out.

BILL YATES:  Right.

LILIANA BUCHTIK:  So some people want to use tools sometimes without even knowing if that is the right tool or no.  So you need to work with them in every situation, explain the tools, explain the value, explain the requirements.

ANDY CROWE:  Liliana, I have a question for you.  I’ve spent a decent amount of time in Latin America, and I’ve noticed as I’ve traveled through and worked with different chapters and different organizations that Agile is really taking hold, especially in some places.  I’ve spent time in Santiago, Chile and in Buenos Aires, Argentina.  And it seems that Agile practices are really, really – there’s a lot of interest, especially in Latin America, maybe even more interest than in North America.  I’m not sure how to quantify that.  When you work with organizations, how do you apply risk management to Agile projects?

LILIANA BUCHTIK:  Well, actually it’s kind of funny because many Agile practitioners believe that they don’t need risk management because the way they manage Agile projects, it’s like they don’t need it.  And this is something we need to work with them to explain, that there’s complementary things.  You can work in an Agile manner.  But despite that, you still need to have even a basic risk register because, even in a project, for example, I have worked in projects with a project manager and a scrum master.  The scrum master would lead, for example, the software development piece.  But the project probably is bigger and has acquisitions or other things.  So Agile doesn’t tell anything about that.  So for that you have to do risk management from the PM perspective.  And obviously using Agile you should be decreasing that risk, specifically in the software development process.  You know, for me it’s a mistake saying that even I do Agile management, I don’t need risk management.

ANDY CROWE:  So let me understand a little bit more with that because, in a typical waterfall project, risk is going to – risk analysis starts early and happens throughout the project.  And you’re going to identify the risks and assess them and develop plans and contingencies.  How do you apply this in Agile with these – let’s say you’re dealing with an Agile client that does these 21-day sprints over and over and over.  How do you work, how do you adapt to that?  How do you adapt to your risk practices?

LILIANA BUCHTIK:  Well, actually the risk register is a live document.  You should be updating it all the time.  Obviously that also depends on how risky the project is.  For example, a few years ago in Latin America, specifically in Chile, was very popular the rescue of 33 miners.

BILL YATES:  Right.

LILIANA BUCHTIK:  That was a very huge, I mean, a very risky project because you have 33 guys down the earth, and every minute you had to be checking risks.  So in that way you have to be checking risk every single day.  And they had a full-time risk manager all the time there.

But sometimes, in some projects, so let’s say you have a software development project to be on the worksite.  You probably don’t need to check the risk register every day.  But at least once a month or more, or once every two weeks.  Or not only you need to go over all the risks, but for example just the critical ones, two or three, to make sure everything is on track, and you will not fail.

BILL YATES:  Liliana, those are great points, and I really – what resonates with me is this idea of we have to adapt.  We have to be flexible with our approach, even with risk management, depending on the environment we’re in, depending on the type of project it is, and even the methodology that we’re using.  Given, again, the experience that you’ve had with so many practitioners, I wanted to ask this question.  When you walk into a room, and you begin a conversation with a project manager, at what point do you go, okay, this person seems to have a good handle on risk management?  What are some attributes or some characteristics of someone who seems to have their act together when it comes to managing risks?

LILIANA BUCHTIK:  Well, one of the very first things I do when I do training is sell risk management, the importance of it.  So I use a lot of pictures with failed projects, and I explain the reasons for failure.  And many, many times, most of the reasons are things that you could have managed, that were under the control of the companies, and they didn’t manage them.  So I kind of show samples, so they do realize that we do have many things in our hands to do because sometimes some practitioners have the perception that, okay, we don’t do risk management because at the end of the day what kills our project is not in our hands.

However, there’s many studies, not only by PMI, but by other organizations and diverse industries, that confirm that most of the most frequent risks occurring in projects are under the control of the organization.  Not all of them.  So the first thing you need to work with that project management to make sure risk management becomes part of their culture.  Some years ago it was very popular, the quality management culture, and everybody was certified.  And that said quality is the responsibility from the very top to the very bottom.  Everybody should want to work for quality.

In a project it’s exactly the same way because some individuals believe that it’s only the responsibility of the PM, or the risk management, or risk management office, or the PMO, and it’s not.  It’s the responsibility of every single individual, and sometimes even stakeholders, vendors, contractors.  And all together need to work to make it happen and to make it work.

ANDY CROWE:  You know, Liliana, you raised an important point when you talked about how quality management started working its way into the culture.  And of course that really started in the 1940s and then picked up steam decade after decade.  But if you think about the impact of that, you know, you consider how much more reliable a hard drive is today than it was 20 years ago, which you’re probably too young to remember that.  But the guys in this room…

LILIANA BUCHTIK:  Oh, no, don’t believe that.

ANDY CROWE:  We definitely remember those times.  And you think about how many more miles a car is expected to get without any breakdown today than it was.  You know, now you have car manufacturers offering 10-year bumper-to-bumper warranties, which back in the ‘70s that would have been unheard of, and now because of that culture of quality.  So it makes me really wonder what would we have to look forward to if that kind of culture of risk management worked its way into projects and organizations.  I wonder what the downstream benefits would be.  It’s actually a very interesting question.

BILL YATES:  Yeah, it is.

LILIANA BUCHTIK:  Well, actually, for example, I have a client now, they are constructing a Hilton Hotel.  And it’s a very aggressive project because they have a very short timeline.  And they were not using professional risk management.  And we started to pilot a new methodology on risk management in that project.  And I talk with them because we are doing monitoring on the pilot.  And they told me recently, “We are eight weeks behind schedule in a very aggressive project, and we believe it is because we are doing risk management.  So now we can, in advantage, we can think of potential problems, and we can act on it.”

And one of the other things they told me, “In the past we thought we knew risks.  But now we actually knew them, and we can quantify it, and I can tell you how many dollars is the value of the risk we have in this Hilton project.”  So it is so great to see people who never used professional risk management before because many, many times, the other thing with risk management, they believe it’s an expensive thing, or something that is extra cost.

BILL YATES:  Right, yeah, it’s seen as a cost or an expense.

LILIANA BUCHTIK:  So you can show clients that you can save money; you can save time; you can have a better quality of life in your team.  And that is actually really great.

BILL YATES:  Liliana, that is so spot-on.  It is an investment.  And I think you’re right, you have to overcome that mindset of seeing risk management, any of those practices as something that’s just an expenditure.  And you kind of forget, you lose touch of how much you’re saving by being wise in that risk management.

Okay.  I want to toot your horn for a minute.  You have an excellent book on the work breakdown structure.  I love that book.  And there’s an obvious tie with the WBS to risk management.  I’m imagining that you probably – that’s probably one of the benefits or one of the things that you pitch when you talk with practitioners about risk management is making sure that they build a complete work breakdown structure.  Do you want to touch on that topic of the connection between the WBS and risk management?

LILIANA BUCHTIK:  Yes.  I mean, when you have a WBS, you can be able to navigate the WBS and asking, like for example, what risk has this exactly work package?  What could go wrong with Package No. 45?  What could prevent me from delivering Package 232?  So it’s a way which is pretty detailed and low level.  So in general, when you do approach it, or you are in the feasibility analysis, you are not going to use the WBS.  But when you are in a planning stage, and you do have your complete WBS, it’s like you can use the WBS as a second check.

ANDY CROWE:  You know, I think the truth is it’s pretty obvious to me you can never really understand risk if you don’t fully understand the scope of your project.

LILIANA BUCHTIK:  Yeah.  I mean, and actually one of the three major failures of projects are scope changes, and not knowing how to manage the scope and changes also.  So if at the starting point you have a good WBS, you are actually, just by having that, you are reducing way far the risk in your approach.  Because when you don’t have a well-defined scope, you will have issues with your project.  You will have issues with your schedule, and you will have issues with everything.  So, yes, a very good way of reducing the amount of uncertainty in the approach is starting by understanding the scope.  So many times you don’t know what to do, and you run to draw a schedule, trying to find out the when and the how when you still don’t know what.

So that’s the beginning.  Some people in their approaches, they try to totally skip scope management.  They don’t even use the WBS.  And actually I do a lot of training on WBS still, and many of them just read about it at the PMBOK Guide or learn about it at this course, and then they just go from documents or contracts to the schedule directly.  They totally skip the WBS.  And then they say the problems they face in scope management because they don’t have a clear picture of what they are going to deliver.

NICK WALKER:  Liliana, this is Nick Walker again.  I’m always curious about all these aspects of project management.  And being an outsider to the world of project management, there are a lot of things that strike me.  One of the things that struck me that you were talking about earlier was the culture of organizations and how to deal with some of those different cultures.  I’m wondering what determines the culture of a particular organization.  Is it the country that you are in?  Is it the economy, the lifestyle, the history?  Or does risk management speak a common language?  Or are there things that you have to deal with that are very, maybe even minute differences, but can become larger differences in the whole scheme of things?

LILIANA BUCHTIK:  Well, I once worked for the PMI Ethics Appeals Committee globally.  So when I worked at that committee I thought, well, ethics sometimes is – some people say, well, that depends on the culture or on the country.  So at that time I studied some models about culture, and there are some dimensions that you study.  And one of the cultural dimensions, for example, there’s a guy that is called Hofstede, and he has a model to understand cultures.

And one of those dimensions is if a culture is formal or informal.  When you go, for example, to the United States or England, it’s a formal culture.  When you go to most of the countries in Latin America, it’s an informal culture.  That’s just one of the dimensions to understand culture.  It could be in some ways it’s something positive; in some other ways it’s not positive.  When you are a project manager, that is not a very good thing because you tend to be very informal.  And to be a successful project manager, even though you need to adapt, you still need to be formal in many cases.

So that is, for example, if I do approach it, and I work with our team in the United States, it’s way far easier than if I do the same thing in Latin America.  But it’s not only the country that you belong to that has to do with that.  It’s also the culture.  For example, it’s not the same, if you are in Brazil working with a Brazilian company, as working in Brazil with Hewlett-Packard or other companies that come from the United States or are multinational.  So in some ways they have their own culture, despite the country they are working at.

So when you do risk management, you need to consider, obviously, the culture and your starting point, and then move forward from that point on.  But there are several things and factors.  One of those is the country, obviously, and it’s a very strong factor, but it’s not the only one.  Every organization also has its own culture, and you need to work with all these factors in common.

NICK WALKER:  Fascinating.  Liliana Buchtik, it’s been a pleasure having you on Manage This.  One more thing.  How can people get in touch with you for more information about your books and your speaking schedule?

LILIANA BUCHTIK:  Well, I’m the only Liliana Buchtik in the world.  I don’t know if it’s a good thing or a bad thing.  So if you just google me, you will find it very easily.  The bad thing is that my last name is not as easy.  So if you figure out to write my last name, you will find me very quickly.  But if you just search for Liliana Buchtik, B-U-C-H-T-I-K, you can reach to my website, and you can send me a message.  And I will directly receive that message.  My WBS book is published by PMI, so you can find it at PMI.org, or the Kindle version is in Amazon.  That’s my only book in English, so you can reach out to me at Buchtik.com.

ANDY CROWE:  And Liliana, I have on my bucket list to come to Punta del Este in Uruguay.  Have you been there?

LILIANA BUCHTIK:  Obviously, every summer.  But you could come from December to March.  That’s summer, and it’s fascinating.  So you will have a really great time if you come to Punta del Este.

ANDY CROWE:  That’s the goal.  That’s the goal.

NICK WALKER:  Liliana, we have a gift for you.  And for the benefit of our listeners, we are doing this by Skype, so you can see this.  I’m going to hold this up.  This is a smart-looking Manage This coffee mug.  I have no idea what the international postage is to send this to you.

ANDY CROWE:  No, we’re going to see her at PMI Global in Chicago, I bet you, this year.  Are you coming this year?

LILIANA BUCHTIK:  I still don’t know, but we can talk about it.

ANDY CROWE:  Okay.  We’ll find a way to get it to you.

LILIANA BUCHTIK:  Okay.  And thank you so much.  It’s been a pleasure for me to be with Manage This, and thank you very much for the opportunity.

NICK WALKER:  Well, thank you again, Liliana.  You know, we talk a lot about books on this podcast – you know, Liliana’s books, but things that we’ve just been reading.  And Bill, I know you always have something that you’re immersed in.  Tell us about your latest read.

BILL YATES:  Yeah, I usually have several books, and that’s the case right now.  I’ve got several books on the bookstand that I’m going at.  So there are two that have an interesting connection.  I want to tell you about two books that I’ve read just in the last few months.  The first one is “Predictably Irrational” by Dan Ariely.  And he taught at MIT.  He’s a professor now of psychology and behavioral economics at Duke University.  Super smart guy.  In this book, “Predictably Irrational,” Dan researches our decision-making tendencies, why we do what we do, why we decide what we decide.  And from the title you can get to his conclusion:  We are irrational beings.

NICK WALKER:  Yes.  I would agree.

BILL YATES:  We are predictably irrational.  Okay.  So that’s the first one, a great book, really enjoyed it.  A lot about human behavior.  The second book is related, just coincidentally.  It’s called “Presence,” and it’s by Amy Cuddy.  The subtitle is “Bringing Your Boldest Self to Your Biggest Challenges.”  She’s a professor at Harvard Business School.  And you may know Amy.  If you’re familiar with TED Talks at all, you may have heard of Amy Cuddy.  So Amy presented the second most popular TED Talk of all time.  And it’s been viewed 41,000,000 times.  Yeah, 41,000,000.  And it’s called “Your Body Language Shapes Who You Are.”  So she actually – it’s funny, in the intro to the book she says, “I actually delivered the TED Talk first; then I wrote the book.”  So she kind of got it backwards.

NICK WALKER:  By popular demand.

BILL YATES:  Yeah, right.  It’s like do a movie and then write a book about it kind of thing.  So, but with Amy, the response that she received to her TED Talk was just overwhelming.  It’s about a 20-minute TED Talk.  So for those who can’t stand reading books, at least research her and take a look at that TED Talk.  But here’s the interesting connection that I found.  Both Amy and Dan survived near-death experiences as teenagers.

NICK WALKER:  Oh, wow.

BILL YATES:  And those near-death experiences, those events really led them into their field of study.  In both cases it really focused on human behavior and decision-making and the connection between mind and body.  So hopefully that’s enough to get you hooked.  So two books:  “Predictably Irrational” and ”Presence.”

NICK WALKER:  I’m hooked.

BILL YATES:  Okay.

NICK WALKER:  Thanks, Bill.  Hey, we want to remind our listeners that, just for listening to this podcast, you’ve earned free PDUs, Professional Development Units, toward your recertifications.  Here’s how to claim them:  Just go to Velociteach.com and select Manage This Podcast from the top of the page.  Click the button that says Claim PDUs, and it will take you through the steps.

Well, that’s it for us here on Manage This.  We hope you’ll tune back in on June 20th for our next podcast.  Joshua Szarek will be speaking about culture and leadership in the workplace.  We’ve been talking a lot about culture here.  We’re going to continue some of those thoughts as we head into the next couple of weeks.  In the meantime, you can visit us at Velociteach.com/managethis to subscribe to this podcast, to see a transcript of the show, or to contact us.  And tweet us at @manage_this if you have any questions about our podcasts or about project management certifications.  We’d love to hear from you.

That’s all for this episode.  Thanks for joining us.  Until next time, keep calm and Manage This.

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