Following the decision by HM Treasury to set up a consulting hub, effectively an internal consultancy for government, this article explores the issues that need to be considered for a successful internal Consultancy to survive and thrive.
HM Government has done this before, whether at the Office for National Statistics (ONS), which was wound up or through a control of costs via the Consultancy Control (which has been changed and loosened). There are also organisations already in the Cabinet Office which are looking to provide some or all of these services.
Key issues to consider
Below we outline several points, we feel must be carefully considered before the setting up and (successfully) running, of an internal consultancy. Additionally ,we cover some potential solutions to key issues.
1. What is the key aim for running this function? Why is Treasury doing this, is it for Cost Savings, Public Sector Efficiency or Change? It is important to be clear here as this will influence the final model used.
2. Is there already a model that is being run, or that is in the process, which can be developed into an internal consultancy? Examples that should be considered before starting a fresh could include IPA &/or GCO (Including the Complex Transaction Team).
3. What skills are really required to run this organisation? A sensible approach would be to create a Skills Matrix to consider what is really required and then how this could be resourced.
4. What is the optimum mix of internal and external staff? Accepting point 3, above the Skills Matrix will assist in getting the right mix of skills and where they come from. The ideal scenario, in line with Lord Agnew and Alex Chisholm’s aims, will be for Civil Servants to make up most of the team. However, this is never as straight forward as it seems and there is likely to be reliance on external support. This needs to be identified at the beginning with a ratio agreed (and stuck to) where possible - points 9 &10, are critical here.
5. What is the optimum amount of time for consultants to stay in this organisation? To ensure that burnout & elitism does not take over, and there is a breadth of fresh ideas, consultants should rotate out around every 2 years. This will also assist with greater knowledge transfer.
6. What is the right size and scalability? The Government will need to find the balance between starting out too small, thus not being able to build a positive reputation quickly enough and service needs of programmes, which may lead to it ‘fizzing out’. Similarly, by trying to grow too quickly without the right people and processes it could lead to non-delivery. If this happens, it would likely lead to Management Consultancies being brought in to turn things around , and ultimately defeating the object. In short, they don’t want run before they can walk.
7. On delivery, it is critical that there are agreed budgets and timelines. Better to come in on time and under budget, than not hit targets.
8. How will this organisation gain ‘buy in’? Many organisations, particularly in certain areas of Central Government do not like paying for services.
9. Are the Large consultancy firms capable of providing the external guidance required? It is important that knowledge transfer is ongoing, not just at conclusion - this should commence from the second week onwards. Too often Consultancies, aren’t held accountable for Knowledge Transfer throughout the lifetime of their contracts. This often means Government extend these contracts as they have no way of sustaining delivery once the Consultancies ‘roll off’ projects – this will be one of the key factors in upskilling the Civil Service.
10. Mentoring is critical, all members of the internal consultancy should be expected to mentor a least one other team member. Again, this will lead to greater knowledge transfer.
11. CPD, there should be a recognised route forward for the internal consultancy. CPD along the lines of at least membership of key bodies such as the Institute of Consulting and/or the Association of Project Managers, should be built into the ongoing structure, not just an in-house Big 6 consultancy course.
12. Incentivisation (Externally), how do you incentive Suppliers (Private Sector Consulting Firms) to work most effectively with the consultants from the internal consulting hub? After all they have a vested interested in subsuming greater amounts of work (revenue), what provisions can be made that incentivise suppliers to avoid ‘landing and expanding’ and that encourages knowledge transfer and upskilling?
Incentivisation (Internally), consideration will also need to be given to the Civil Servant Consultants who will be delivering in this hub. Ultimately, traditional management consultants work all hours to deliver for the customer not just to do a good job, but also to win more business - often those leading teams have financial incentives. How can The Treasury incentivise the Civil Servants to deliver at the same pace with similar outcomes?
13. Attraction and Retention is also key, for the permanent Civil Servants in this hub, the Government will need to consider how they make themselves more attractive over Big 4 or other Management Consultancies for example. Once these Civil Servants have been in the hub for a period of time it will become a hunting ground for Management Consultancies (who can offer much higher salaries), so what can the government do to retain these individuals in the longer-term?
As can be seen from this article and the points above, the decision to create and successfully run a consulting hub/internal consultancy should not be taken without clear analysis first.
The joint authors of this article are Iain Greenwood and Harry Rawson. Iain previously held a Business Management role overseeing an internal consultancy for circa 4 years. He has been an independent consultant/interim for circa 23 years and is a Fellow of the Institute of Consulting.
Harry is a Consultant for Investigo Public Sector Consulting, deploying Business Change and Transformation and Procurement/Commercial teams, and individual experts across Government.
For further details and how Investigo Public Sector Consulting might be able to assist, please contact Harry Rawson and Stuart Saxon (email@example.com and firstname.lastname@example.org)