| | By Mick James
A Mr Holsbeek from
Belgium recently wrote
to me to ask whether I
had considered the
development of internal
consultancy by big firms
instead of using
external consultants.
The question gave me
pause for thought. I
used to run into
internal consultants all
the time, but haven’t
met any for a long time
or heard much about the
topic. I do recall that
very few of the internal
consultants I met seemed
to be that happy with
their lot. There was
always a lot of
frustration with the
internal politics
associated with the
role. It often seemed
hard for them to
establish their
credibility as “proper”
consultants, or even to
get managers to consider
them for roles for which
they were well-equipped
rather than using their
favourite external
consultants.
A quick trawl round
the Net revealed that
there are still quite a
few courses out there
for internal
consultants. These were
often based on the
premise that you could
thereby save a fortune
on external consultancy.
It’s a winning but | |
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| | superficial argument, in
my view: We’re spending
x million to pay
consultants’ wages plus
a hefty margin, why not
just hire our own?
My main objection to
this would be the same
as my objection to those
sensationalist articles
that complain about
total government
expenditure on
consulting. It’s simply
wrong to aggregate
consultancy spending in
this manner, when
projects can differ so
wildly in size, scope
and style. It’s also
crazy to aggregate
consultancy spend if you
can’t get a similar
handle on the resulting
benefits, and makes for
skewed decision making.
For one thing, it
makes consultancy look
like a continuous cost
rather than the series
of discrete
interventions it usually
is, each of which may
have required radically
different skillsets from
a large number of
individuals. Could a
smaller number of
multipurpose consultants
ever match that?
Consultancy is surely
all about hiring high
quality and specialist
skills you can't afford
to keep in-house – the
generalist business
consultant is long dead. | |
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| | On the other hand, if
clients really are
paying both year-round
and year-in, year-out
for the same skillset,
then they should indeed
be hiring. But that’s
just sloppiness.
Even there, I would
still argue that this
ignores the importance
of drawing on
consultants' broad
experience of working
with many other
companies and
industries. Internal
consultants will
struggle to maintain
this level of exposure
to best practice and
innovation, although
they will be able to
balance this with deep
and intimate knowledge
of their employers’
business. Using
external consultancy
truly enables you to
stand on the shoulders
of giants and leapfrog
the opposition (and to
fearlessly mix your
business metaphors).
Someone once said
that what men really pay
for when they pay for
sex is for the woman to
go away afterwards.
That applies in spades
to consultants. Much as
I approve of and support
consultancy I can think
of fewer things more
frightening than having
a group of consultants
hanging around all the | |
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| | time looking for things
to do. An internal
consultancy will need to
justify its existence by
generating a constant
flow of project work,
which could be either
wasteful or positively
dangerous.
That said, there is,
in my view, enormous
value in having
consulting skills within
an organisation, whether
that means bringing in
ex-consultants or
training the workforce
with appropriate bits of
the consultancy
skillset. The roles of
the consultant and the
line manager have to a
great extent converged
these days. Managers
are much more
project-oriented, now
that change and
discontinuity are part
of the fabric of
organisational life.
There is a greater need
to get results by
influence, motivation
and negotiation than by
“command and control”
methods, and complex
business problems often
require the ability to
set up and manage
short-term,
cross-disciplinary
teams.
There’s also a lot
more data being
generated in
organisations, whether
through the output of IT | |
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| | systems or the
ever-increasing amount
of regulatory and
compliance work now
being done. Analysing
and making intelligent
use of this data
internally again makes
use of significant parts
of the consultancy
skill-set.
Outsourcing has also
redefined the role of
internal departments
such as finance or HR.
With the transactional
grunt-work being done
elsewhere, the in-house
role becomes much more
strategic, requiring the
ability to consult with
the board to elucidate
strategy, and to manage
the resulting change
both inside and outside
the organisation.
So my conclusion to
my correspondent was
internal consulting,
yes, internal
consultants, no. I am
sure that this
conclusion will raise
the hackles of internal
consultants everywhere
who read this piece and
I look forward to
hearing from you with
your own views,
experiences and
insights!
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