Internal vs. External?

Here’s a question from Mary Jo Asmus, my blogging friend from Intentional Leadership:

“Can you describe the balance between when it makes sense to do leadership development programs “in house”, using internal facilitators vs. going outside and hiring consultants?”

Thanks for the idea, Mary Jo, and congratulations on your free book. Having been in positions that require “make or buy” decisions for leadership and training programs for a few companies, I think I can offer some guidelines.

5 Advantages of using internal resources for a leadership development program:

1. They are less expensive.
There’s no out-of-pocket expense needed to use your own people. Yes, there’s payroll and benefit costs associated with having full time trainers on staff. However, if fully utilized, the yearly cost of an internal trainer is generally less than if you used contractors and consultants for the same work. Subject matter experts are even less expensive. Experienced managers can be used to train newer managers, and functional experts (i.e., finance, marketing, HR) can be used to teach their areas of expertise.

2. They know the business and culture.
An internal trainer knows the culture, unwritten rules, and company-specific nuances that are a part of any organization. There’s no “breaking-in” period required, or long (and sometimes costly) “tell me all about your business” process required to get started.

3. Empathy and credibility.
In some companies, especially successful ones, internal trainers carry more credibility because they have “walked in our shoes”. It sort of ties back to #2, knowing the business, but it’s also a feeling of “they are one of us, they get it”. A new sales manager may be more likely to sit up and pay attention to an experienced sales manager that has made or exceeded quota for the past 10 years in a row.

4. Continuity and integration.
An internal trainer can be involved in other aspects of leadership development and HR, so they are in a position to make sure all of the pieces, messages, and processes are consistent and aligned.

5. Added development for your internal resources.
Teaching is a great way to learn and develop. Using a manager to train on the topic of coaching forces that manager to brush on up the topic. It also puts a little pressure on them to be a role model in that area, so they are seen as “walking the talk”.

5 Advantages of using external resources for a leadership development program:

1. Internal expertise may be missing.
External resources are sometimes needed when the required expertise is missing or in short supply within a company.

2. Innovation.
An external resource can bring a fresh perspective and new ideas into a company.

3. Ability and willingness to take risks.
Some external trainers and consultants are more willing and able to challenge people and processes without fear of political consequences. In other words, they can sometimes “get away” with something that an internal trainer wouldn’t dare try. Participants are often more comfortable opening up to an outsider.

4. Better use of internal resources.
There is a cost to using internal subject matter experts and senior leaders – their time. Taking one of your best sales managers out of the filed to train means less time spent coaching sales reps and meeting with customers.

5. External resources are easier to “fire”.
Let’s face it, if you’re a trainer manager, and you somehow end up with a mediocre trainer, you’re going to be spending a lot of time on coaching and performance management. It’s much easier to replace an external resource.
BTW, some of the best leadership development programs I’ve designed or attended have used both internal and external resources, leveraging all ten benefits of both.