Originally published in the June 2003 Issue of Link & Learn.

Organisations are increasingly using internal consultants but many are failing to gain maximum value from the investment, claims a new research report, which examines the growing trend towards internal consultancy.

Published by Roffey Park, the executive education and research organisation, "The Role of the Internal Consultant" highlights the use of internal consultancy teams, the factors that influence their effectiveness, and the tensions and challenges that arise. Developed from interviews and workshops involving 90 internal consultants, the report also provides best practice guidelines on how to select, develop, and utilise the right people for the role.

According to the research, 32% of organisations now use internal consultants. They are common in all sectors but are most often found in financial services and the public sector.

However, the authors, Barbara Kenton and Diane Moody, question the credibility of many internal consultants. They claim that 62% of internal consultants are middle or junior managers and that central service units, such as HR and IT, are simply re-branding themselves as internal consultancy teams without changing their personnel, skill level, or mode of working.

"Internal consultancy teams can add value because they are inside agents who understand the organisation," they said; "but many of these teams are doomed to fail because the employees chosen for the role are too junior and they lack the necessary skills and credibility. Too often, the move to internal consultancy is motivated by a drive to cut costs or because centralised service functions want to establish a more strategic purpose."

The research finds that many internal consultants are unclear about their role. Although many aspire to work in collaboration with their clients, they are more frequently used as an 'extra pair of hands' by busy managers who are struggling to cope. Whilst this might be a legitimate role, it has an impact on the time the consultant will have available for other projects.

Despite formal contracting through Service Level Agreements, research highlights that problems in the internal consultant-client relationship often stem from miscommunication, emotional reactions, politicking, and power-play.

"Some internal consultants are too quick to make assumptions about what the client needs and how that need should be met," said the authors. "In many organisations, internal consultants have a poor image and that's why they are often overlooked, in favour of external consultants, when it comes to the more interesting strategic projects."

The research highlights that the key skills for internal consultants include business and technical competence, self-awareness, and the ability to analyse, influence, facilitate and build relationships. They also need skills relating to contracting, handling conflict, and closure.

"Many internal consultants have difficulty disengaging from projects because they struggle to say 'no' to further requests for involvement," said the authors.

The research notes that in order to gain value from internal consultants, organisations should have recognised, strategic reasons for their use and tangible senior-level support. It is also important that the consultants themselves have the appropriate skills and that they understand their objectives.

Other factors that influence the role that an internal consultant is allowed to play include the client group's 'readiness' to work in a different way and the prevailing culture.

Senior managers should try to create 'client readiness' for consultancy, select individuals according to the specific skills required, create roles that are substantial enough (in hierarchy/visibility) to support the demands made, and provide ongoing development for consultants at both individual and team/group levels.

"Because internal consultants typically work solo with their clients, there is little opportunity for co-consulting and knowledge transfer," said the authors. "Organisations should endeavour to create opportunities for these through supervision discussions, Learning Sets, and group development events."

Explicit capability development programmes for internal consultants should be established, based on a skills/competence framework. These should be supported by mentoring (to decode the political systems), team-based 'shadow consulting,' and collaborative working with external consultants.

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