Are Internal Risk Professionals Treated Differently Than External Consultants?

The short answer is an emphatic yes!!!

But I know you have come to expect more from me, so let me expand on this a little…

Going back to my days as an internal ERM practitioner in one of Florida’s largest property insurance companies, I can attest personally that internal risk professionals are treated differently than external consultants.

There were several times in my tenure that an external consultant would be brought in to tell management the same things I was saying. Executives would have a more open mind to the outsider than someone from within.

This naturally leads one to ask – why?

In my experience, although an internal risk professional brings a certain level of expertise about the company and industry to the table, coworkers and executives see this individual as someone familiar. A comfort level exists that can be slightly detrimental when there’s a difficult topic or problem that needs addressing. Leadership, or anyone for that matter, doesn’t want to hear it from someone familiar.

As the old saying goes – “familiarity breeds contempt.”

But once I became a consultant, I’ve recognized and come to appreciate other reasons why internal professionals are treated differently than outsiders, including:

  • An external consultant is not mired in day-to-day office politics. Their singular focus (…or at least it should be) is on the client achieving their desired result.
  • The consultant does not have to worry about a performance evaluation or what executives and others think of them.
  • Consultants can bring similar experience(s) from other companies to bear. In-house professionals will typically not have exposure to the number of situations a consultant will.
  • Consultants are hired for their deep expertise on a certain topic or they have more or different experience. Internal risk professionals typically only have surface level knowledge across the entire organization…having deeper level knowledge of every issue would be insane and counterproductive, which is why they rely (or should be relying) on business units to fill in the gaps.

The following quotes from the book Consulting on the Inside: A Practical Guide for Internal Consultants illustrates these differences well…

…externals are more influential. People look to externals for objective points of view, especially when managers need a second opinion from the internal’s recommendation. They see internals as insiders with special interests who won’t be as objective.”

Externals have the advantage of objectivity and being an outside voice. They are the hired guns who say what the internals cannot say.

This situation isn’t unique to ERM, but that doesn’t make it any less frustrating for the risk professional who works tirelessly for their organization.

The key thing to remember is to not take it personally…

One of my priorities as an ERM consultant is to mentor and encourage in-house risk professionals and pass along tools they can use to navigate similar situations in the future.

As an internal risk professional, it’s important to remember that you will not have expertise or tools to handle every situation, and that is okay.

Back in my days as an internal risk professional, my boss wanted us to do a deep dive risk assessment on data privacy. I jumped in head-first to soon learn the topic was too complex and well outside my capabilities and ended up recommending that we hire a consultant with specialty skills and knowledge to complete the assessment.

So next time you have a difficult or sensitive topic you don’t know how to best handle or a conversation that didn’t go well, don’t take it personally.

Instead, focus on helping your organization achieve its desired end result regardless of whether it’s handled internally or externally.

As I’ve discussed before, risk professionals are simply internal consultants there to ensure the company is making risk-informed decisions in pursuit of strategic objectives. Doing this effectively means not just having certain skill sets but developing certain personas as well.

However, in spite of your best efforts, there will be times when an outside consultant will be the best route to take, which is okay. Before choosing a particular option though, be sure you understand what to look for in an external consultant and how to ensure the engagement delivers exceptional value.

Does it seem management treats external consultants differently at your organization?

I’m interested in learning more about your experiences as an internal risk professional. Feel free to leave a comment below or join the conversation on LinkedIn.

If your company has a challenge where an outsider’s perspective is needed though, reach out to me to discuss the specific situation and how my services may be of help.

Featured image courtesy of Gustavo Fring via Pexels.com

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1 Comment. Leave new

  • Also senior management, directors and board have legal obligations and personal liability concerns. Diligence can be shown by or may require getting external advice (even if only to confirm internal advice).

    A good read, thanks.

    Reply

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