Kendall Consulting Group - Internal Consulting Group Success

Article Introduction

We have worked with many companies in the development and skills building of their internal consulting groups as well as been an external partner in some of their work. One question that has consistently been asked is "How should we measure our success?" As we found over time, the answer to that question is not as easy as it might appear. As you will find in the following article, the viewpoint you adopt can significantly change the view of success that you have for an internal consulting group. A summary table has been placed at the end of the article. You may also download a self test and submit it for evaluation by clicking here.

Three Relevant Situations

Situation 1. George McClaren and his business team were highly impressed by the recommendations that a team of internal consultants from the IT organization had made for their billion plus dollar European chemical company. After a one-month assessment of his organization, they had surprisingly recommended that they sell off a major part of the business. He and the other executives of the division were impressed by the insight and understanding the group had of their unit as well as the unexpected but well-justified conclusion. There was no doubt they were right, and the result had been right under the business’s nose for years prior.

Situation 2. Dan Yorn couldn’t believe his luck at having been chosen to join the newly formed internal consulting group at Dylan International – a billion dollar business involved in home and commercial electric products. This move would lead to career advancement, more challenging job assignments, an opportunity to be a change agent and to make a difference in DI, new colleagues across the international company, as well as travel away from his remote Midwest location.

Situation 3. Sarah Clarkson reviewed the numbers from her internal consulting group’s first year of operations. The group had courted and won jobs in three of five target divisions doing high profile reengineering work. Initial results were proving the validity of forming the group – significant contributions to the bottom line were resulting. The business executives were now vocal advocates of the group. Further, the group had attracted four new “stars” from within the company. Employee satisfaction ratings were off the scale – the highest in the company. Lastly, the entire group was working as close-knit team – a “business within the business.”

Each of the individuals above has a different view on what success is for an internal consulting organization. This article addresses these three viewpoints on success in more detail.

Viewpoint

There are many different vantage points from which to study the success of internal consulting groups. This article organizes these viewpoints into three perspectives – those of:

Client
Consultant
Consulting group manage

While other stakeholders may have views on the value that an internal consulting group adds to the organization or on the methods used, their views are in one way or another covered by one of these three perspectives.

Clients (or customers) are those individuals that are the beneficiaries of the consulting work. They are most likely to be the people responsible for the success of an organizational group, and most likely to be the people that hired or brought the consultants into the unit, helped charter their work, oversaw their progress, and now are benefiting from the results.

Consultants are the individuals in the internal consulting group. Often recruited from an information technology or other staff group within a corporation, they have the skills and personalities that allow them to be effective at delivering value to their customers. While they strive to deliver that value, some of their measures of success are different from the ones their clients use.

Lastly, most groups have an individual that heads the internal consulting group and is responsible for its development, deployment and overall contribution to the corporation. While interested in contribution and value add, as well as employee (consultant) well being, this person has a further set of criteria by which to measure success.

This article explores the criteria for internal consulting group success from these three viewpoints.

Value Add – The One Common Measure of Success

There is one common measure of success for an internal consultant – they must deliver value to the business. One could get analytical and calculate the cost of the consultant to the organization and then further calculate the benefits they have made happen over some time period, thereby creating some type of cost-benefit calculation. More often, however, we see organizations accepting the cost of an internal consultant as a sunk cost and focusing on the value or benefits delivered resulting from their consulting work within the company.

The value add benefits can usually be stated as one or more of the following benefits:

• Cost reduction or avoidance
• Capital expense reduction or avoidance
• Revenue generation
• Improved competitive position
• Reduced time to execute
• Creation of new or extended products or markets
• Improvements to the supply chain
• Improved employee quality of work life
• Improved quality of product or service offerings
• Improved shareholder value

In one-way or another the projects that consultants work on should address at least one of these objective areas.

In one firm we worked with we had a daily mantra of asking one another “Are you adding value?” We asked this to constantly remind each other that we needed to add value to our clients in both the short term and in the long term. We did not think that waiting to calculate value at the end of a project was an adequate measure of our contribution; what if the job ended prematurely for some reason? We wanted to add value daily and went out of our way to find ways to do this and to measure and communicate this in a way that would be credible to business executives.

The customers of internal consulting groups certainly look for added value as a result of the effort being expended. Good consultants are not satisfied unless they are delivering value on a consistent and frequent basis. An alert consulting group manager is constantly on the lookout for opportunities for her or his group to make a meaningful contribution to the company – to put their resources to their highest and best use. Consulting group managers and consultants are measured at least annually on their contribution to the organization.

Client Viewpoint

Customers inevitably have a number of other measures of success besides value add when they consider working with an internal consulting group. When we have interviewed customers regarding how they view success of consulting work they will often mention criteria that are difficult to quantify. They will tell us, “The consultants fit well with our organization” or “They were good communicators – they kept me informed of what was going on.”

We know that “fit” is one of the key criteria in selecting an external consulting group; we have found it also a key criterion in selecting an internal consultant. This is the sense that consultants share similar values and principles as the manager and staff of the client group. Often it is easier for an internal consulting group to measure their consultants’ alignment than it is to measure an external group’s alignment. The internal consulting group’s manager can evaluate “fit” by reviewing the feedback she or he has received from the business on the consultants’ style, knowledge and past performance. Taking the time to gather the feedback and to use it in deploying consultants on projects will increase the success of the consultants and their fit with business teams.

All consultants should be excellent communicators. This is one of the hallmarks of the profession, be it for internal or external consulting resources. Effective communications will help reduce risk and help manage expectations – both also hallmarks of engagement success. Further, they address small issues before they grow into more significant ones. Consultants should look for different ways to communicate the same message, and not rest until they are sure the message has been understood as intended. Success in consulting jobs depends on effective communications, often across the organization’s functions, departments and country boundaries.

Customers will often mention that the consultants that worked in their organization had the right skills or experience, a good tool kit, flexible methodologies that worked in their setting, and that they were mindful of the time and cost to the organization of the project work. These are also key elements for measuring the success of a consulting group.

Having the right skills and experience can sometimes be more difficult for an internal consultant compared to an external one. Internal consultants often come at a good price, but sometimes part of the price to be paid is that their skills or experience base is limited to the organization and how things are usually done in the organization. Best practices in general business should be brought to the consulting job, whether by internal or external consultants. To deliver the right skills to a particular client engagement we routinely see internal consulting organizations coupling with external groups to draw on their resources, experience, tools and methodologies. The client may not even be aware of the external involvement. In addition, the internal consultant makes it a priority to seek out sources of best practices by reading, attending seminars and developing a network of contacts across industry. They are well connected.

A consultant’s tool kit and the methodologies they use quickly become visible and evident to a customer as the work begins – or even as a work proposal is made before a job starts. The frameworks, approaches, templates, and other techniques that consultants use to get the job done need to be adapted to the client organization and not indiscriminately used. Techniques should not have too much “consulting jargon” that will annoy the client manager and staff. Time needs to be taken to explain these tools to the clients and to allow them time to digest the approach to be taken. Thus, there are success measures from a customer viewpoint around the tools and methods that consultants use: Are they explained well? Used appropriately? Adequate to the task? Available in sufficient numbers to provide project agility?

Other measures of success customers will mention in connection with the work of an internal consulting group include management of risk. Did the consultants leave the client feeling the work, its time frames or the results were in jeopardy? Was the job done smoothly and according to plan, or were the consultants late and scrambling all the time to keep things on track?

A further measure of success is the objectivity of the consultants. Do they impartially view the situation and the alternatives or are they influenced by their history, role and position in the company? Objectivity is needed in consulting work, regardless of who is doing the work. Even internal consultants need to leave the current paradigms of their company behind and search for new ways of doing business. Their objectivity will allow them to consider and recommend better practices that are used outside the organization.

Lastly, does the customer think they made the changes happen and that the consultants were only incidental contributors to the success? Did it look as though the client was in charge all the way through the engagement? While the consultants’ egos may want different answers to these questions, a successful engagement should leave the client and the organization believing the client managers were in charge and the drivers of the project – even though the consultant was the ‘invisible hand’.

In Situation 1 presented at the start of this article, George McClaren was the customer. As the head of the Heavy Chemicals Group he was an advocate for using consultants but had not used the newly formed internal consulting team before. He was delighted with the work they did for him and his management team. Here were some of his key points when he talked about the success of the engagement:

• Within a month the group had identified a way to bring £200 million to the bottom line of the organization through the sale of a money-losing part of the business.
• The move changed the money-loser to a moneymaker since in the sale the unit would retain the role as supplier of key chemicals to the spun-off business segment. (The purchaser was able to merge the segment with part of their operations and turn it into a profitable venture, thereby making the transaction a “win-win”.)
• The consultants ensured that everyone was brought into the thinking and decision-making regarding the organizational change. Everyone could see their own contribution in the actions that took place and believed they had been instrumental in structuring the deal.
• All we [the management team] had to do was follow the consultants’ step-by-step recommendations and we were a success. They knew exactly what they were doing and what we should be doing as well. It was almost a turnkey operation.

Internal Consultant Viewpoint

At the top of a list of measures of success for any consultant will be that they added value in some meaningful way to their business partners (see above). Consultants usually would like to be recognized for their contribution and know that they have developed a personal reference they can call upon from this work. Many hope for a promotion, salary increase or bonus for truly outstanding work; a reason many became internal consultants is for the opportunity to show that they could indeed deliver work of such a caliber.

Consultants need to be proactive and to take the lead in identifying opportunities for change in the organization. Work won’t just come to their group. The consultants need to understand the business sufficiently well so that they can make constructive recommendations for improvement in the business units. They need to know how to analyze business processes and find opportunities for improvement. Then they need to know how to propose their recommendations and sell them to the client managers. Most internal consultants tell us that this role gives them great satisfaction as they have seen weaknesses in the organization for years but were never empowered to suggest improvements until they became consultants. This satisfaction is a key measure of success for them.

Another key measure of the success of an internal consultant is how active the client wants the consultant to be in the affairs of her or his organization. Internal consultants want to be invited to attend key meetings and feel they can approach managers in the group openly whenever they need their input or assistance. One internal consultant said, “I know I’m a success because I’m at the table when my clients do their strategic planning sessions.”

Consultants also want the work they do to be interesting and challenging. If they are engaged for busy work or work that no one else in a business unit wants to do (e.g., dirty work), then they will quickly become disenchanted with the effort and seek to end their involvement. Sometimes we say they are operating in “grind mode” and are seeking success by getting into their “high performance pattern.” Many internal consultants have told us that their job now enables them to work closer to the leading edge of technology or state of the art management techniques than as practiced in the rest of the organization. Others have told us that the travel required as part of the consulting job was a desirable feature of the work and a measure of the success of their job.

As consultants work a new engagement they expect that they will develop new skills, expand their tool kit and extend the methodologies they use. Further, many cite improved job security and work-life balance as other measures of success they expect from the work. Others tell us they have more visibility to the rest of the company from their consulting position. Still others cite the ability to be their own boss most of the time compared with a standard line or staff job. Almost all have told us they felt that the internal consulting position put them on an improved and fast career track.

Dan Yorn, the internal consultant in Situation 2 at the start of this article, measured his success almost daily by the measures mentioned in this section. On one of his consulting engagements he figured out a way to avoid building a new $150 million warehouse by clever use of information and communications technology. Inventory turns in the present warehouse increased dramatically as well. Due to this huge savings, the company promoted Dan and gave him a significant bonus. Dan knew he would never have been able to make this contribution without being an internal consultant. Further, his reputation spread and he was a highly requested member in many change projects across the company – just the kind of work he wanted to be involved in. Dan actually turned down several offers to return to line jobs in favor of staying in his role as an internal consultant.

Consulting Group Manager

Sarah Clarkson, the manager of the internal consulting group mentioned in Situation 3 at the start of this article, typifies the types of leaders we’ve seen of internal consulting groups in terms of the measures of success she works with her group to achieve.

Adding value to the company through her group’s consulting engagements is of paramount importance to her. She feels that internal reviews of work done by her staff need to exceed or far exceed client expectations. She also has to balance the requests for her group’s resources with their ability to make the most meaningful contribution to the company. At one point, she turned down work because it did not leverage her group’s talent. She also had to be on the lookout for the type of work the consultants in her group wanted to do; she wanted work that would create personal growth opportunities for her staff as well as work that would deliver significant value to the corporation. Consulting firms need “lead machines”; internal groups are no exception. You need to become known for the kind of work you want to do and can do well. You need a track record, a reputation for knowledge, technique and results, and a good network throughout the organization and beyond.

Consulting group resource utilization is often considered a key measure of success – even at an individual level. Consulting firms call this “billability” – the ratio of hours billed (or potentially chargeable) to a client divided by the number of available hours. There are times when you might want low billability, particularly if you are launching a consulting group marketing campaign or doing some staff development activities. Overall, however, a unit’s billability is a reflection of how well the consultants are viewed and received by the organization; this can often be interpreted as a measure of how valuable they are to the company and whether there is sufficient return on the company’s investment in the internal consulting group.

Most consulting groups describe themselves in terms of products and/or services they offer. Over time, an internal consulting group’s success can be gauged by an expanding set of services they offer to their company. The ability to do this reflects the development or attraction of new skills or experienced staff to the consulting team and further reflects a vibrant group. Such growth also means that the tool kit and methodologies available for servicing clients grows over time, making both the group and the company more nimble and agile. So some measures of success can be determined from the depth and breadth of the services, tool kit and methodologies the consulting group has at its disposal.

Consulting groups need to think about their own renewal over time. They should be expanding their skills, experience base, capabilities, and services a little each day – in the outside world this is called ‘firm development’. Growth can be accomplished organically through internal staff development and mentoring, through recruiting of talent, or through other innovative ways. We have been paired with internal consultants on many occasions to help develop their skills in a number of areas as we did our regular (external) consulting work. A measure of success in this area is the ability of the consulting group to attract top talent from within the organization (or outside). The group should never be allowed to become a parking place for problem staff.

As the manager of a consulting group you also include teamwork as a success criterion. Group members must be able to rapidly form and perform on client teams at a moment’s notice, without friction, in a seamless manner, and adopting the roles within the team needed to deliver value to the client - without allowing their egos to cause conflict. Sometimes these teams will be a mix of internal consultants, client business staff, outside consulting resources and both senior and junior personnel. Consultants should hold other team members in high regard and openly participate and share information with them in support of project goals. Each should be professional and collaborative yet try to make it fun for the team to work together.

Sarah Clarkson’s goal of building a “business within a business” was a challenging one. She was to build an internal consulting group; ensure it had a good reputation; obtain work the group could do that would make a large contribution to the organization, and that would make their clients happy. She had to recruit a consulting team, build a group culture unique to the consulting group and ensure the high quality delivery of everything the group did. Lastly, she had to set up some processes that would help the group grow over time.

Overtime, she accomplished all of these goals. Further, her small group started to do special assignments for both supplier and distributor companies outside the corporation. These were always done at a profit or in a way that provided great benefit to her company.

Putting It All Together

So what measures should you use to assess an internal consulting group? In true consulting fashion, the answer is “It depends!” Adding value is the one common thread that links all the viewpoints together, however, depending on whether you are a client, internal consultant or the manager of the consulting group, you will have other unique factors that you consider when you think of the success of the internal consultants.

Each internal consulting group should develop its own measures of success and enroll its stakeholders - the client managers and the consultants - in using these measures to evaluate their progress and success of consulting within the organization. A key factor of success is that you all agree to a common set of measures and use these exclusively to measure success on a regular and pre-set time frame.

Once these measures or objectives are agreed, the next step will be to define critical success factors (CSFs) – the areas that will have to go right in order for those success measures to be achieved. More details on CSFs may be found in other articles on this web site.

Lastly, you can evaluate your own performance by taking a short "self test". You can download the questionnaire as a Word document by clicking here. We invite you to e-mail your completed questionnaire back to us for evaluation and feedback. Please provide contact information so we may return our evaluation to you.

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SUMMARY CHART

Kendall Consulting Group has helped many organizations set up internal consulting groups and has participated in joint projects with some of these groups. If you would like to know more about measuring success or about how you could partner with KCG in some way, please contact us by e-mail or by telephone at 941-366-1774 or 978-886-3562.

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Innovations Articles

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• Effective Uses of I.T. Staff as Internal Consultants
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Archive Articles (below)

• Designing Executive Information Systems
• Executive Information Systems: An Overview of Development
• Implications of Transition From an Industrial Era to One of Information
• Critical Success Factors Techniques can Apply to Team Management, Too
• Decision Scenarios Ensure Information System Meets Business Needs
• Critical Success Factors : Helping IS Managers Pinpoint Information Needs
• Combining Quality and Reengineering for Operational Superiority
• Steering IS Committees Straight
• Internal Consultants and a Consultative Approach
• EIS Plays Critical Role in Reengineering
• Rapid Software Selection

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