Garry Cook at City was the person who sold the idea of buying Man City to Abu Dhabi. And he was then put in charge by the Arab owners in 2008 after they'd completed the takeover. And he made a lot of mistakes, but realised that he needed help and turned to a former colleague/friend who was working at Nike at the time to help him put the structural foundations in place at the club in 2009. And that person was Brian Marwood, who had never worked in a similar role before, a role which some call the DoF or Sporting director etc.
So it was Cook and Marwood who Abu Dhabi had put in charge of the running of the club and Marwood oversaw their title win in 2012, before the two chaps from Barcelona even arrived at the club. The CEO, Soriano was fired by Barcelona and joined the club after he had overseen the demise of Catalan Airlines who he was brought in to save.
The commentator turned DoF, Txiki, joined a Man City with a fully functioning football department and structural processes that were already in place, which were put in place by Marwood who had taken a step back from a more demanding role.
And contrary to what alot of you believe about a DoF, he doesn't identify transfer targets but rather the identification process is left to the scouting department, which is normally led by a head of recruitment. And City's head of recruitment is Gary Worthington who is ex United, and he was brought to the club by Brian Marwood in 2010. A DoF is basically a football administrator and should create and then empower networks/departments on the football side of the club. The likes of Marwood, Txiki or even Rangnick didn't identify players to sign but rather put people in charge who did in a scouting capacity. For example at Hoffenheim, Christian Mockel was the one who identified the talent to sign and not the football administrator, which was Rangnick.
The best in class on the football side of the club have to be your lead and head scouts. And if you have those in place, and a football administrator overseeing it all, then it's a very simple process. And hence why clubs hire DoFs from within but hire the best in class scouts externally.