THE ORGANIZATION OF INTERNAL MANAGEMENT CONSULTANCY:

DIMENSIONS, DYNAMICS AND DILEMMAS1

NICK WYLIE
Bristol Business School
University of the West of England
Bristol, BS16 1QY, UK
ANDREW STURDY
Department of Management, The University of Bristol
CHRISTOPHER WRIGHT
Discipline of Work & Organizational Studies, The University of Sydney
INTRODUCTION
Much of the research on internal consultancy has focused on the role of the individual
consultant (Neal & Lloyd, 1998; Scott, 2000; Weiss, 2003; Wright, 2009) or has explored
internal consultancy generically in comparison with external consultancy (Johri, Cooper, &
Prokopenko, 1998). Lacey (1995) for example, contrasts the challenges faced by internal and
external consultants across the different phases of the consultancy intervention (see also
Deelmann, Huchler, Jansen, & Petmecky, 2006; Steele, 1982). Other writers emphasize internal
and external consultancy as competing forms analogous to a make or buy decision. Such
comparisons often stress the advantages of internal consultancy in terms of cost and knowledge
transfer, while external consultants bring external knowledge, objectivity, as well as greater
symbolic capital (Armbrster, 2006: 115).
However, the concern with viewing internal consultancy through the lens of external
consultancy means that little is known about the manner in which it is organized and how this
impacts upon its role. This paper seeks to address this neglect by exploring the dimensions,
dynamics and dilemmas associated with internal consultancy units in a range of organizations in
the UK. The aim is to develop a better understanding of the operation of internal consultancy in
the broader context of organizational change and management innovation. We examine the
structure of these groups, the methods they employ, and how they change over time.
RESEARCH METHODS
The data for this paper derive from a research project into the role and impact of internal
consultants in the process of organizational change and innovation. In particular, the project
addressed the following questions:
What are the reasons for the adoption of internal consultancy and how is it incorporated
into organizational structures?
What form does internal consultancy take and what are its key responsibilities?
What impact does internal consultancy have on organizations and what are the main
challenges it faces?
These questions were explored via semi-structured interviews with internal consultants,
their clients and senior managers from a range of organizations, in financial services,

telecommunications, manufacturing, government departments, and health care organizations in

the UK. Interview data was supplemented with documentary sources and some shadowing of
consultants in their interaction with different clients. In total, 76 individuals (including both
internal consultants and their clients) were interviewed from 22 organizations. Interviews were
semi-structured, lasted between 45 and 90 minutes and were digitally recorded and later fully
transcribed. We asked respondents about their careers and employment background, the nature
and methods of their current work, the group or department they worked within, their
relationships with internal clients and the broader organization, as well as their external networks
with professional groups and external consultants. Data analysis involved a close interrogation of
the interview transcripts and a broad coding of responses in line with the three core research
questions identified above. Further analysis then attempted to identify the dominant themes and
issues of shared and distinctive experience within each of these areas.
COMMON DIMENSIONS OF INTERNAL CONSULTANCY
We identified three dimensions common to all internal consultancy units (ICUs) examined
within this research.
Internal Outsiders
Despite varying structural locations, ICUs all shared an outsider role. For many
individual consultants, the dual status as both (organizational) insider and (departmental) outsider
was fundamental to how they operated and marked a clear point of distinction from other
managerial roles (see also Wright, 2009). This often involved a recognition that success in their
role was often dependent upon achieving and sustaining some form of independence from
clients. For example, as an internal consultant at Transco noted, Sometimes I feel I understand
this business too well If you stay too long you go native. Hence, being separate to, or outside
of, entrenched views and opinions was a status that recurred across all of the ICUs examined in
this research.
Sources of Credibility
Credibility, or having a reputation across the organization as a source of valuable advice or
support, was key to ICUs sustaining their role. However, the credibility of the ICU could not be
assumed and did not solely emerge from their structural location. Instead, it was something that
had to be actively managed by ICUs. For example, quite a number of the ICUs studied had close
links with their Chief Executives which acted as a source of credibility in terms of authority and
enabling it to work across divisions and departments. In HealthCo2, the CEOs sponsorship was
seen to be central to the success of the ICU, although there was a recognition that it could also
prove problematic in terms of the willingness of clients to engage with them. In LocalGov1, the
ICU experienced a similar situation and the manager recognized that their links to the CEO meant
that some people are suspicious of us and that it also closes some doors because were close to
him.
The skills and experience of individual internal consultants were also a key source of
credibility for ICUs. This could be achieved through appointing individuals with organizational
knowledge (and often pre-existing organizational credibility), and/or those with explicit
consultancy experience, project management or generalist managerial qualifications. Closely

linked with the skills of individual consultants, was the ability to be seen to add value to the
organization. As an internal consultant in GovServ1 noted, if we dont add value, we should no
longer exist.
Project-Based Working
The final dimension common to all ICUs was the emphasis placed upon working on
discrete projects, or finite and identifiable units of activity. Although many ICUs retained
ongoing relationships with different divisions and departments, and could also play an extended
role in terms of implementation, they consistently stressed the importance of setting out their
specific remit in terms of outcomes and time or resource allocation. By completing these projects
and identifying specific outcomes, the ICU was able to more clearly point towards its
contribution and so develop its organizational credibility and value.
DISTINGUISHING DIMENSIONS OF INTERNAL CONSULTANCY
The common dimensions of internal consultancy set out above might be considered as
familiar to many forms of management consultancy both internal and external. Moving beyond
these the research also identified a wide variety in the organization of internal consultancy,
suggesting that fixing it in a definition is plagued with difficulties. We now explore some of the
ways in which ICUs varied, firstly in terms of three broad structural positions.
Structural Location
Centralized and independent ICUs. These groups had two main features. They were
centralized in the sense that in a classic organizational chart they sat above the main
operational functions (in a similar manner to a traditional staff or corporate services functions)
(Johri et al., 1998); and they were independent in that they were distinct from service functions
such as HR or IT. For a small number of ICUs, this meant being very clearly associated with the
organizations senior management team. For example, in LocalGov1 the internal consultancy was
part of the Chief Executives support unit which gave it a broad remit to initiate changes from a
centralized location; something that the manager of the unit described as supporting whatever
the Chief Executive wants. To some, such a role should not be seen as consultancy in that the
ICU and those that they work with on projects have little choice but to carry out the work, but
this is often the case with external consultancy as well.
Centralized within a service function. A second group of ICUs were also located centrally
but were incorporated into existing service functions. This association with a specific managerial
function inevitably impacted upon the scope of responsibilities of these units and their status
internally. For example, in FinCo2 the internal consultancy was set up as a HR Centre of
Excellence that provided services to divisional HR managers. This was explicitly a form of HR
internal consultancy which was capable of working with all divisions in the organization,
although it did so only in relation to core HR issues (e.g. employee engagement, remuneration,
resourcing etc).
Decentralized within an operational division. The remaining ICUs were more decentralized
in terms of their structural location, meaning that they were contained within a specific division
and so had minimal association with both senior/executive level management as well as other
central service functions. Typically the divisions which contained ICUs were customer facing or

involved in the delivery of a product and/or service to external customers. This meant that ICUs
became responsible for projects within these divisions and so had little or no scope for extending
their consultancy role elsewhere in the organization. This was not necessarily an indication of
minimal influence and responsibility as some of these ICUs were closely associated with the
divisional senior management team. For example, in CommsCo the ICU was responsible for a
large scale transformation program within a specific business division and the Managing Director
of the ICU reported directly to this divisions CEO.
Work Methods
Functional knowledge base. ICUs also varied on the basis of their links to specific
traditions of functional knowledge such as organizational development, operations management,
or strategic advice. For example, in GovAgency1 the ICU emerged from a group closely
associated with time and motion studies and a concern with headcount reductions. The
manager of the ICU suggested that this gave them a clear image problem in the organization
where they were seen as, hatchet men, going in, Can we cut headcount, can we reduce cost, can
we get rid of this part of the business? Which was an acrimonious relationship from day one.
Varying methodologies. These alternative traditions for internal consultancy also meant that
ICUs could be distinguished on the basis of the types of methodology they adopted. A number of
ICUs were associated with the application of a specific methodology such as Business Process
Re-engineering, and some of them used branded project or change management products, such as
Six Sigma, that were explicitly brought into the organization. Having a dominant methodology
was seen as important by a number of ICUs because it ensured that they were the owners of
particular ways of working in their organizations which, in turn helped them to establish a sense
of identity. For other ICUs there was a much greater level of variety and flexibility in terms of
their methodologies. In part this was derived from the skills of individual consultants, but it could
also reflect the breadth of issues that the ICU was able, or sought, to address.
Implementing change. ICUs took different approaches to the implementation of change. For
example, when the ICU was focused more on a limited range of efficiency based methodologies
they tended to pass responsibility for implementation over to the clients. In contrast, other ICUs
that developed more explicit forms of project or program management methodologies took a
much greater role in implementation.
Knowledge transfer. ICUs also varied in the extent to which they were actively involved in
disseminating methodologies. In some cases, there was a clear remit for the ICU to do this and to
support continuous improvement across the organization. In ArtsCo, the ICU ran training
programs in OD and change management skills for HR practitioners, and in GovAgency3 the
ICU acted to support the development of project management skills. In other organizations, ICUs
were less concerned with disseminating methods to clients, in part because they did not
themselves work to a rigid set of techniques, but also because they were keen to retain control
over the area in which they were viewed as specialists.
DYNAMICS OF INTERNAL CONSULTANCY
Many of the shared and differentiating features of internal consultancy were subject to
significant change within ICUs which can be seen therefore, as having particular organizational
narratives. These shed light on the nature of internal consultancy as well as its dynamics. For
example, a number of ICUs experienced shifts from an explicitly centralized structural location to

a more decentralized one, something that in TransCo resulted in the effective disbanding of the
unit. A common solution to this challenge was for ICUs to diversify into areas beyond what were
considered their core responsibilities. For example, in FinCo1 the ICU retained a static position
within a specific division but, over a number of years, became more closely allied to change and
program management for both internal and external clients.
Such changes were responses to an underlying fragility of internal consultancy. Even
established ICUs faced ongoing challenges in sustaining their unique organizational identity and
very existence. This was often reflected upon with a number of individuals recognizing that the
ICU could be regarded as a luxury for organizations and so susceptible to cost-cutting. This sense
of fragility or temporality for many ICUs underpinned both their desire to establish ever greater
levels of credibility and their dynamic character. Hence like external consultants, internal
consultants also expressed vulnerability and uncertainty (Sturdy, 1997). It also meant that
individual consultants were aware of the potential problems of remaining too closely associated
with individuals or specific ways of working in case these no longer held sway over the
organization. As a consequence, the dynamic nature of internal consultancy was driven as much
from within ICUs as they searched for new ways to engage with the organization, as it was
imposed upon them by broader structural changes.
INTERNAL CONSULTANCY DILEMMAS CONCLUSIONS
We suggest that across the different dimensions and dynamics of internal consultancy there
are a number of recurring dilemmas in the organization of internal consultancy. First, ICUs face
certain issues in relation to their dominant work practices. For example, how far does an ICU
wish to be associated with a particular type of project/method, and to what extent do they possess
the skills and resources to expand beyond these? This poses questions about the need for ICUs to
balance high levels of work activity with high value or high profile projects. Reliance on core
methodologies may ensure repeat business, and so high activity levels, however, it may also lead
to ICUs being unable to diversify into other more substantive areas. Moreover, association with
specific methodologies and work practices poses dilemmas around the impact and uniqueness of
ICUs.
A second set of dilemmas relate to the nature of client relationships. First it is clear that the
structural location of ICUs can play a significant role in how internal consultancy is perceived
and the nature of their relationships with other parts of the organization. There are advantages for
ICUs from having a centralized role in that it enables work in a range of areas, and developing
close relationships with specific functions could also help to sustain or embed the role of internal
consultancy. By contrast, the decentralization of internal consultancy, meant sustaining a clear
distinction between client and consultant could be more problematic as consultancy approaches
become diluted into more traditional managerial functions.
Finally, the issues of reputation or credibility emerged as a key consideration for ICUs, but
also one within which there are a number of alternative approaches. For example, the dynamic
nature of internal consultancy suggests that this credibility is something that cannot be assumed.
Instead, it has to be built and sustained over a period of time often in the face of changing
organizational priorities and the shifting experiences and desires of the ICU itself. As a result the
ICU has to identify how it can best create plausible accounts of the contribution it makes to the
organization, and how these can be used to maintain credibility. An additional concern here is
how far credibility should be reliant on links to senior managers, and how far ICUs need to seek
support at the top of the organizational hierarchy. Whilst this may help to ensure that the ICU is

perceived as relevant and able to exert influence, some ICUs experienced problems in becoming
too closely associated with individuals and so faced suspicion and resentment elsewhere in the
organization.
Taken together these different dilemmas cannot be condensed down to suggest an ideal
type of internal consultancy. Instead, they show that whilst the perceived value of developing
internal change agency (based on a notion of consultancy) remains attractive to many different
types of organization, this does not necessarily translate into a coherent and enduring form.
1. This paper is based upon research funded by the Economic and Social Research Council, ESRC, in the
UK, whose support is gratefully acknowledged (RES 000 22 1980).

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