When To Use Interim Managers vs Consultants vs Internal Resources For Change Projects

Words by Andrew MacAskill, Executives Online

interim-hub-when-use-interim-managers-consultants-internal-resources-change-projects

Change is the new business as usual. As a global Interim Management and Search Firm we know that modern resource management in the context of projects is both tricky and a huge opportunity for leadership teams.

The vast majority of business leaders we deal with are either in growth or change mode and need help fast with their major strategic programs.

Changing social demographics, disruptive new technologies and globalisation all require fresh leadership and fresh perspectives. But where should you turn to obtain this additional input and resource for these vital initiatives and projects?

Lets have a look at the three main resourcing options that are available to you (and the potential pro’s and cons) when compiling a project team to transform a part of your business:

Management Consultants

According to the most recent data from Kennedy, the global consulting market is currently worth more than $230 billion. Here in the UK, Management Consultants advise almost every major organisation and our national knowledge in consulting is one of our fastest growing exports.

Management consultants are focused on improving organisational performance by analysing the existing problems and challenges and developing plans for improvement. There are major players like the global strategy houses and big four professional services organisations as well as a number of boutique organisations in this space available to provide specialist expertise.

Pros

  • Tend to have extensive benchmarking data and a view across your industry
  • Hire very bright, well educated, hardworking young professionals
  • Can bring IP, analytical power and case studies to the project table
  • The boutique firms in particular are often run by very entrepreneurial, commercially minded leaders. One of our clients, Ven Digital being a great example.
  • Has access to the wider resources of the consultancy firm

Cons

  • Big firms can be expensive if you want to deal with the Partners and Directors with day rates up to £5k
  • Many of the consultants (particularly in the big firms) albeit hardworking and bright don’t have a huge amount of external experience of working in industry or understand what it takes to put theory and academia into practice
  • Are often incentivised to elongate projects, enlarge teams and “hang around” for as long as possible
  • As consultants typically act in in an advisory or facilitory capacity, trying to attach accountability can be difficult

Interim Managers

Interim management is the temporary supply of an individual with management expertise into an organisation. These individuals are referred to as ‘interim managers’ and will typically be experienced business leaders who operates via their own individual limited companies.

Interim managers are typically experienced managers and directors who have spent time sat “in the clients seat” giving them a deep understanding of the requirements and best approaches for the role and project.

Pros

  • Offer cost effective solutions at often half the day rate of traditional consulting houses
  • They are ‘hands on’ so will not only strategise and advise but also implement and execute
  • Can transfer knowledge into internal teams
  • Can be hired within days on flexible contracts that offer the ability to scale up and down quickly on projects
  • You can select the person you want to work on the project from a shortlist provided by the Interim Management Firm
  • Have sensitivity to your company’s ethos but aren’t constrained by its politics, personalities or protocols
  • Report directly into you
  • They are goal focused

Cons

  • Like consultants when they leave they take their knowledge with them
  • If assembling a team of interim managers for a project you may need to run multiple recruitment processes
  • They need managing in a different way to employees in order to extract value

Internal Resources

When starting a new project within the organisation, businesses will often look internally to identify strong internal performers to run business critical change projects across your business. It’s rare that big change projects will use an entirely internal team, however it’s also vital that internal team members are involved in these types of initiatives to prevent the programme losing momentum after the specialist change experts leave.

Pros

  • Know your culture
  • Have existing stakeholder relationships and credibility
  • Know that they have to live with the changes they make post project implementation
  • Are able to understand the change project in the context of the wider organisation

Cons

  • You are moving people who are already doing good/important/successful work elsewhere thus creating a gap and potential loss of earnings!
  • Might not have the skill set or experience required to deliver
  • They are restrained by politics in what they can and can’t do or say
  • Being great at their day job does not automatically mean they will be strong in a change project

Each of the three options we’ve looked at have pro’s and con’s so business leaders need to think carefully about the type of change project they are about to begin, the budget and resources they have available, and consider whether to use a blend of all three options or to choose one approach over the others to be a key element of your project team.

Whichever approach you decide to take it’s worth bearing in mind research from Mckinsey about the three main reasons change programmes fail.

Common Failure Modes In Large-Scale Transformation Programmes

 

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Source and credit: Mckinsey Quarterly Transformation Executive Survey 2008

Their research showed that at different stages of a project cycle there are challenges to over come as projects launch, sustain and scale. Being aware of these problems within a change program and then resourcing effectively to mitigate against them is the key to success.

With the above in mind we have looked at five typical project scenarios below and tried to offer some insights and direction based on our experiences of when things go well:

1. New Market Penetration

When you don’t have in-house resource who have the knowledge or benchmarking data for new markets is where management consultants have a huge role to play in offering trend data and strategic insights.

2. Cost Reduction Initiatives

Very well suited to interim mangers who have an understanding of procurement process and are able to add value quickly at a reasonable day rate. You will also want internal resources involved at various points to ensure that the business is getting value (not just cost reduction) and that the benefits realisation is embedded post contract negotiation. Many interim mangers will also take some risk/reward with regards to their rate for these type of assignments may be open to a gain share arrangement linked to savings achieved.

3. M&A Work

There are generally two different scenarios here namely pre-acquisition work and post-acquisition work.

During the pre-acquisition and due diligence phase my recommendation would be to invest in the best and most relevant management consultants that you can afford – these firms undertake this type of work all of the time and are very good at helping take the guesswork out of the numbers and cut through the inevitable “window dressing”. The stakes are too high to experiment with an untested solution in this instance.

Post-acquisition Integration is well suited to Internal project teams made up of individuals from both the acquired and the acquirer. Interim Managers also work well acting as the facilitator and conduit between the two businesses during the integration as they are objective and without historical or future agenda.

4. New System Roll Outs

Whether we are talking ERP, CRM, P2P, eLearning platforms or any other new system rollout you need to build a project team that is a blend of all three of the above resourcing options to really succeed where so many fail. The management consultants play a vital role as the systems integrator in bringing previous experiences and a roadmap to the table.

Internal project teams have to be involved to ensure that the project has business context and to act as superusers and system champions way after the consultants have gone. Interim Managers bring war stories and vital experiences to the table and play a key conduit role in managing the PMO, stakeholders and systems integrator.

5. Gaining Directional Consensus

When as MD/CEO you are getting blocked by you own leaders because of a resistance to change, looking to external consultants that can be hired to add more weight to an already compelling business case can help to get the proposition over the line. The very top management consulting firms are ideal for this scenario as they have the weight of brand to cut through the political noise and barriers, and consultants can be used by leaders to put logic and fact into a debate that internally has become emotional.

What Next?

What are your thoughts and experiences of running projects using consultants, interim managers and internal teams? As always we are interested to hear your views.

Via our partnership with T.E.N. Group we are also currently working on placing teams of Interim Mangers to drive projects for clients looking for staff augmentation. Find out more about that by contacting me, andrew.macaskill@executivesonline.co.uk

Looking To Strengthen Your Internal Team?

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