Hay Group Offers Korn Ferry Its Brand In Marriage


Korn Ferry, executive search firm and aspirer to the leadership and talent consulting throne,  announced it has entered into a definitive agreement to acquire Hay Group, a blue blood human capital consultancy that has remained aloof to upstart courtiers for decades. Now this is good theater. I always expected the marriage banns to read Hay Group weds Aon Hewitt or Mercer or Deloitte or IBM. But this is yet another surprise in a summer of surprises (thank you, Towers Watson) and I’m having fun just thinking about it.

On reading the press release, I see some pretty smart moves.

  • Korn Ferry is paying $425 million for Hay Group This is a very fair deal. According to KCRA estimates,, this is almost dollar for dollar an assessment of value based on revenues.
  • Korn Ferry gains Hay Group’s “solid portfolio of intellectual property” This may, I suspect, have been the deal trigger. Korn Ferry has gained a source of subscription-based recurring revenue in Hay Group’s standardized job evaluation methodology. On the consulting side, Hay Group’s talent and leadership methodologies have evolved from decades of empirical research on human behavior and its causal effect on organizational performance. The latter will be a real differentiator for Korn Ferry.
  • The combined advisory business will be branded as Hay Group Smart move. Hay Group has a very strong brand in the human capital consulting space and has built a solid business using complex methodologies that make it difficult for clients to switch. Changing letterheads would only create confusion in this core market.

The press release didn’t mention other advantages, such as the expanded geographic presence Hay Group brings. The firm currently has a bigger presence in Europe, the Middle East and Asia than Korn Ferry, and most of its clients are large domestic and national-level public sector agencies rather than multinationals based in Europe or US. This is especially important in the current market, where demand for leadership development consulting is exceptionally strong in these regions and growing exponentially. Good move, Korn Ferry.

The biggest challenge I see is cultural alignment. Hay Group’s culture is more about numeracy than strategy and has always had difficulty sustaining change. And while its private company status has limited the firm’s ability to invest in new business development over the years, transferring to a culture of accountability and quarterly Wall Street reckonings will add a level of anxiety that eclipses enthusiasm for deep pockets. Productivity could become an issue in the short term.

I’m sure that Korn Ferry CEO Gary Burnison will do his utmost to smooth the way for Hay Group’s transition. After all, he has been on a mission to expand Korn Ferry beyond its core business for some time, executing no less than seven acquisitions in seven years to achieve this goal. If anyone knows about post-merger integration, it is Mr. Burnison.

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