Glass_of_water_Optimist_Pessimist_Management_ConsultantI posted in December last year about the Business Relationship Manager as a Management Consultant, and want to pick up on that theme again with this post, but this time focusing on the implications of internal versus external consulting. As is often the case, the post was inspired by a recent interaction with a client. As context, I’ve been a management consultant for most of my career (30+ years) and have been involved in the Business Relationship Management(BRM) role (defining, implementing and training) for 22 years. A very good long-term client recently asked me what it really meant to be a management consultant, so in answering him I decided to ‘dig deep’ and go beyond the more obvious aspects of consulting. By way of full disclosure, my internal consulting experience (i.e., consulting as an internal member of the firm that employed me) is quite limited compared to my experience consulting for external clients. But I believe I can draw some insights that might be of value to BRMs and others in an internal consulting role.

Find the Real Problem!

Consulting engagements are often entered with a high degree of ambiguity–whether in internal or external consulting situations. The ‘presenting problem to be solved’ might not actually be the real problem, but you don’t know that until you’ve scouted the situation, formulated and tested some hypotheses, and captured the real issues and their implications. (For the absolute best treatment of issue analysis, refer to Barbara Minto’s Pyramid Principle.) Another classic reference source on consulting issues in general is Gerald Weinberg‘s The Secrets of Consulting.

Figuring out the real problem is absolutely key–while you can treat symptoms, which is often all you are presented with, you won’t solve the underlying problem. Even though you might have done what you were engaged to do, you won’t be invited back! You have to find the real problem to be solved, and this can be quite tricky. As Weinberg points out, the consultant-client relationship is inherently dysfunctional–the client has to admit to having a problem they don’t know how to solve or an opportunity they aren’t sure how to capture.

As an analogy, people sometimes complain that doctors don’t listen to them. While this is clearly a very real issue, in some respects, I empathize with the doctors. The things a patient might tell a doctor are often misleading–coming into the doctor’s office with preconceived ideas of what is wrong with them. The skilled doctor wants to perform her own diagnosis, and not be distracted by the patient’s rambling about what they think might be going on. So, the skilled consultant knows how to lend a sympathetic ear, but is not misled by what they are told–it’s just data points to be input into the hypothesis formulation-testing process.

Where Does the Consultant’s Time Go?

The common external consulting model categorizes time into at least three major buckets:

  1. Consulting (usually billable and counted towards ‘utilization’–the percentage of time the consultant is billable).
  2. Business Development (finding and selling consulting work, usually non-billable).
  3. Practice Development (developing methods, processes and competencies to support consulting and/or business development, again usually non-billable).

Keeping track of Consulting, Business Development and Practice Development is important to resource planning and performance management, whether for an internal or external consultant. While high utilization is generally good, when it approaches 100%, that might be a sign that the consultant has got ‘stuck’ and might not be putting his time into the most valuable activities. On the other hand, a consultant whose Business Development time is extremely high might be a sign that they are failing to connect with their potential client base. Low Practice Development time might be an indicator that the consultant is not investing in future capability, or is not supporting other consultants in the organization.

Who Funds the Problem-Finding Activity?

Back to the “Find the real problem” issue above, an important question becomes, is problem analysis part of the engagement, or is it part of business development? For external consulting, business development is typically not charged to the client, so this activity needs to be efficiently handled. This may or may not be the case for internal consulting, but regardless of how consulting time and business development time are charged, it is good discipline to record these activities separately and keep track of them.

Obsessively Manage Scope

Even if you have successfully rooted out the real problem, scope can both escalate and drift, perhaps more so with an internal consulting situation where commercial pressures such as cost and time might not be so apparent. While meandering scope might feel interesting, and even productive, scope drift can burn time and ultimately wear out your client’s patience. I’ve found the best strategy is to break things down into small chunks–either by time (e.g., 2-week increments) or by scope (e.g., issue analysis) and I think this advice is equally applicable to the internal consultant. Agile consulting, anyone?

Worry About Your Next Engagement

External consulting is famously a ‘feast or famine’ proposition. When you are knee deep in solving client issues, it’s hard to find the time, energy and motivation to scout for the next engagement. But this is what the external consultant has to do. Often, the roots of that next engagement might well lie within the current engagement, and most seasoned consultants quite deliberately look for new consulting opportunities within their current client–the so-called “annuity relationship.” But this can be a trap–sooner or later, the consultant will wear out their welcome, and if they have become dependent upon one client, they might enter the ‘famine’ phase. I’ve always believed it is better to be invited back (and to set the stage for such an invitation) rather than be aggressively ‘selling’ the next piece of work.

I think the idea of constantly searching for the next engagement is applicable to the internal consulting role, and that ignoring the Business Development activities associated with consulting could be unhealthy. A consultant learns a great deal through Business Development, and often is freer to ‘roam the halls’ and explore the landscape than when they are heads down in an engagement. So, even though the commercial pressures of external consulting might not apply, the discipline of at least some level of continuous business development is a good one to practice.

Promote Your Client’s Achievements

One aspect of finding your next engagement is building a portfolio of success stories and references to support them. The best way to do this is to collaborate with your client in promoting their achievements (and your contributions to those achievements) rather than promote yourself. As my boss at Ernst & Young used to put it, “Make sure you are in the ‘family photograph’ when they are celebrating their success–not in the center of the photo, but clearly an important member of the team.”

Worry About Practice Development

Similarly, Practice Development and the formal creation and continuous improvement of consulting methods and intellectual property is a crucial activity. While raw consulting talent is a key differentiator for any leading consulting firm, the best of the best invest heavily in Practice Development. This is what helps them consistently achieve excellent results and supports knowledge exchange among consultants, as well as improved engagement estimating heuristics.

Be Clear About Your Role

Are you actually the consultant in the engagement, or the ‘general contractor’? A Partner is a consulting firm operates in more of an Account Manager and General Contractor role–ensuring the right resources are brought to the table and that the clients problems are being effectively and efficiently addressed. Sometimes the Partner might operate as Account Manager and Consultant. As an internal or external consultant, being clear on the roles for a given context is important. Role confusion–be it in your mind, your client’s mind or the minds of the other team members–can come back to bite you during the engagement.

I’d lover to hear back from internal consultants with your own ‘tips and traps’ that others might learn from–please comment or email me.


Image courtesy of Thinking Laterally