Recruiter Huntswood has developed a very sizeable practice focusing on the sector over the last 18 months. Says recruitment consultant Jon Tait: “The market is both client and candidate driven. We have three consultants managing 15 or 16 clients in retail, fmcg, financial services, oil and gas, and the e-commerce side (although the latter is diminishing slightly). And we have placed around 45 people in the last 18 months.”
Porteur Keene, a recruitment consultant with Camron James, has been involved in quite a lot of work for the likes of Morgan Stanley this year, and thinks internal consultancy within corporates is set to be a growing market.
Large change initiatives and merger and acquisition work are driving this market. Says Tait: “Firms in financial services and, increasingly, retail are looking at the way they are doing business and the way they act culturally. Many of them are looking to recruit people to set up internal consultancy capabilities to look at strategy and change projects.”
Reuters has recently set up an HR consultancy team to assist with change in the business. Peter Buckingham, director of HR consulting, says: “Key areas are business transformation, the move into the e-commerce world, and the establishment of joint ventures and acquisitions, where they take place.” The work is a mixture of organisational development type consultancy through to practical hands-on support at the front line, he adds.
On the strategy side, Tait cites the example of a group within a leading global oil company, which focuses on strategic projects for business units on a global basis. Such companies recruit programme and project managers, change directors, corporate development managers and strategy managers as well as internal consultants, he says.
IT and telecoms player Marconi is in the market for internal consultants. Consultant Nigel Smith is currently recruiting staff. “Because Marconi is so large both structurally and in terms of employees, it warrants a consultancy group which can effectively head up a drive towards efficiency, from improving small things like paperflow management all the way up to the large processes which help the business run day to day,” he says.
Marconi is undertaking a change management programme, largely as a result of its focus on telecoms, based on the Six Sigma methodology, which analyses opportunities to cut costs, increases efficiencies and improve processes and working environments. “There is a lot of restructuring to do to get us to the forefront and make us competitive against the frontrunners, and improving efficiency internally is very important.”
Smith is looking for a range of people to fit into Marconi’s existing culture, ideally with Six Sigma experience. But, he says, top level grades of Six Sigma experience – “Black Belts” – are difficult to find and Marconi is being flexible in its search. “We are considering people with business change consultancy experience (ideally with MBAs) and if they make the grade we will train them internally in the methodology,” he says.
Keene sees M&A work as a major catalyst for the development of internal consultancies. “For example, when a Chase Manhattan merges with a JP Morgan, the importance of an internal team for cohesion purposes is reinforced. No matter how good the consultancy coming in, it won’t culturally have a grip on both sides. These internal staff are almost like civil servants – politicians come and go but they are the continuum that keeps everything on the straight and narrow.”
In addition, he says, clients like a data information company he is dealing with, want a champion of change within the business when using an external firm to carry out an implementation. “It needs a mirrored consultancy, an internal team who understand what is going on. These people are like the catalyst or the oil in the gearbox, almost like programme managers who make sure that the project is running smoothly throughout the organisation. Lots of companies are looking for mirrored consultancy now.”
Another driver for the corporates is the cost of consultancy. Says Tait: “Three of my clients have started internal consultancies which compete against externals for in-house work. Many of the internal staff actually come from those consultancies so the quality of the people doing the work is the same but can be a quarter of the price.”
In practice, however, the kinds of projects done by the internal group are very often those that an external firm would not consider. Until recently, Jonathan Page was head of knowledge management for NatWest Consultancy, which was disbanded as a defence against takeover by the Royal Bank of Scotland last year. He says: “NatWest competed against external firms for work but, the kind of thing you use internal consultancies for are quite frequently different, partly because of scale.”
External firms have the resources for bigger projects, while internal groups do the work the externals won’t touch. “These are short, low-touch strategic pieces of work which add stacks of value but, for an external firm, would not justify the development time necessary to win the work.”
From a candidate’s point of view there is much to weigh up before moving to an internal consultancy. On the downside, says David Hughes, md of recruiter Executive Connections, internal consultancy is viewed by many as being second tier to the mainstream because of a lack of client variety.
“Skillsets tend to be less broad than outside as a result and a variety of political agendas tend to intrude. Objectivity may be slightly undermined.” He adds: “A lot of consultancies tend to be leading edge in change and performance improvement. Broadly speaking it is a difficult market to keep pace with and as a practitioner it is difficult to develop the same depth of specialist knowledge in an internal capacity.”
In addition, says Chris Sale of recruiter Prism, internal consultants are often not taken as seriously as externals by others in the company.”There is a sort of snobbishness that if you are paying for a service it is assumed to be better.” And here the brand name of an external comes into play. Says Page: “The key benefit of an external is the name they bring: that is far more difficult to ignore. There is an element of ‘no-one every got fired for following McKinsey strategy’. Most internal consultancies haven’t been around long enough to build that sort of quality and size of brand.” For the internal consultancy, he adds, the challenge is how to demonstrate to colleagues that it is adding sufficient value.
On the plus side, says Sale, “internal consultants can feel that they are actually adding value to a particular company, feeling part of it and seeing the results of their work. Often lifestyle is improved, in terms of hours and travel; there isn’t the same need to spend long periods away from home, although with a large multinational there can still be a lot of travel. And in a large group there can be a fair amount of variety.” For many leaving consultancy for the first time, he adds, it represents a good stepping stone to other line positions within the organisation. “Internal consultancy roles are often highly visible,” he says.
Page, who is now with a FTSE 30 financial services company, working in an internal incubator on new business ideas, originally moved to NatWest from Price Waterhouse. “I had started as a graduate with PW and would drop into a company, stay three months and move on. The internal consultants I worked with had a more realistic view of the world than I had as a life consultant in a big firm. I wanted to get more exposure to the real world.” He saw the move as an obvious one. “It would use and build on the skills I had, I could continue to do the kind of things I enjoyed, and I would be in the organisation after a project had finished, still in contact and seeing the results of my work.”
He stayed four and a half years, beginning as a generalist but more recently working on innovation and the changes wrought by e-commerce. “Organisations need to innovate – that is now part of the key battlefields of competition.But old fashioned organisations find it very difficult to do because they are quite slow and locked into certain ways of thinking. Internal consultants represent a culture in those organisations well placed to play key roles in making change happen. They have a way of working built around questioning, seeing the world from a different perspective and making things happen quickly.”
While the pay tends to be less in an internal consultancy because corporates have to be sensitive to internal pay structures, he adds, the lifestyle is better, and the big corporate benefits can be extremely valuable. “I was surprised how valuable some of the perks turned out to be at NatWest,” he says. “And one of the big bugbears at externals is travel – but there was no question of being sent to Rotterdam, for example, for six months with NatWest because NatWest Rotterdam didn’t exist.”
Page agrees that exposure to only one company’s thinking and sets of problems is a disadvantage but points out that a big organisation can provide considerable variety. “External consultancies tend to organise staff along industry lines anyway, so they rarely see other industries,” he adds.
Marconi works across a wide range of technologies and prides itself on the training it can provide at any level, says Smith. And, while it cannot match the salaries paid by the big firms such as PwC, it pays market rates or above for suitable candidates, subject to a ceiling. So far, the numbers of people coming through to the assessment stage has been quite good but attrition is higher than expected, he says. “But we would rather wait slightly longer and get the quality we want,” he adds.
Tait is finding it very easy to fill the quite considerable demand he sees from corporates for internal consultants. “We are seeing a lot of consultants looking to move to industry clients because the lifestyle is more appealing and because they want ownership of their work.” He sees a trend in industry clients for consultants to be involved in a project, from strategic recommendations through to implementation, and then move into the management of that initiative.
An internal role does not inhibit career development in consultancy per se either, he says. “We see people who go into industry and move back into consultancy. It doesn’t harm them at all. In fact, it can do them good – proving their skills in a commercial environment is a strong thing.”
Says Keene: “Historically, a lot of internal consultants were quite weak, they never had to sell themselves or network. But that has changed. Now they are networkers and marketeers with bags of experience, who are taken very credibly.”In fact, he says, while internal consultancies drain people from the big firms, they have also become a target for them.
Page’s internal experience has proved an asset. “It has been very powerful – I am not just a big consultancy guy who has gone from graduate entry through the sausage machine. Working in the commercial world means that you are less organisationally na’ve than someone like that.”
He had no problem in getting his new job when NatWest Consultancy was disbanded and says the same is true for his erstwhile colleagues. “Even lifelong bankers in their mid-50s walked straight into other jobs,” he says, attributing this to the value of internal consultancy experience.
Out of around 70 consultants, five or six took early retirement but the rest went to dotcoms, internal and external consultancies or line positions in NatWest or elsewhere.
And the future is bright for Page. He is enjoying his role but for the longer-term is toying with a number of options. “I have a long apprenticeship in consulting skills and might set up my own company with friends in the innovation field. Otherwise there are project based roles for the big corporates, and some of the new consultancies look interesting. But,” he adds, “I would not consider a role with the Big Five.”
Nationwide aims to keep up with the competition
Simon Kingston, who first featured in these pages two years ago as a managing consultant with Nationwide Business Consultancy, now heads the unit at the tender age of 34. Kingston’s 39 staff work across four main areas: strategy direction, business analysis, quality management and change management.
Says Kingston: “We do the work ourselves or work in tandem with an external firm. This enable skills transfer and reduces costs overall.” He also tries to ensure that staff stay abreast of developments in consultancy in other ways: “We allocate time to research and development around any topic, allocating people to update practice areas on tools or strategy.
If we were working with new tools we would work with externals. And we have briefing sessions from key firms.” The company also puts a lot of onus on conferences and the right kind of training and development, he says. “Networking is very important for us and conferences provide an opportunity for this. We are also part of the Internal Consultancy Forum.”
Kingston himself has conceived a development culture initiative to help NBC’s consultants “raise their game”. The two year vision, which focuses on improving performance through individual growth, presents staff with a number of challenges: to operate at a level that fits the department’s future activities; to all be seen as excellent consultants; to draw favourable comparisons with external consultants; to fairly reward and recognise skills and contributions; to do things better – focusing on continuous improvement; and to build broader horizons and wider perspectives.
The vision is being delivered through workshops, training, coaching and mentoring, and its success will be measured through the department’s Balanced Business Scorecard, focusing in particular on client and staff satisfaction.
As far as his personal prospects go, Kingston is sanguine about his position. Nationwide puts a lot of focus on career development, he says. His predecessor moved within the company to become head of e-commerce but an external move is also an option, he says.