ERE recently asked Ed Newman, founder and chief executive officer of The Newman Group, questions relating to his company’s recent acquisition by Korn/Ferry company Futurestep. Below are his candid thoughts on the changes ahead.
Pre-acquisition, what is it about Futurestep that appealed to The Newman Group?
EN: I had always thought we would grow the business organically until the timing was right to connect with a larger company with a bigger infrastructure. Combining with a larger entity would give us the ability to scale much faster and stay ahead of the competition.
Futurestep is Korn/Ferry’s outsourced recruitment subsidiary and a true pioneer in the RPO space. They have approximately 500 employees and global operations in North America, Europe, and Asia Pacific regions. Korn/Ferry International is a leading provider of talent management solutions around the world and a household name within the Fortune 500. This combination of global presence and strong reputation made a relationship with Futurestep a very appealing possibility for us.
Additionally, there was very little overlap in the services we offer, yet they are very complementary to Futurestep’s offerings. We will be able to provide clients a much more comprehensive set of solutions.
How long were you in talks with them?
EN: We first began talking back in early 2006. This was a decision that required careful consideration and one that had to be right for my entire team. I felt the timing wasn’t right then and I put discussions on hold. We picked up again last fall, which led us to partner in a client engagement. This engagement was a clear demonstration of the opportunities that a combination would provide to both organizations, and as a result we resumed discussions in 2007.
What excites you about Futurestep’s acquisition of The Newman Group?
EN: Futurestep is a global business which will give us an opportunity to expand our services outside North America without having to lay the infrastructure. Their presence in the market and client relationships will create great synergy and growth. Our services are in great demand by their existing customer base, which will create tremendous growth opportunities. Finally, Futurestep has an entrepreneurial culture and they are committed to allowing TNG to remain autonomous.
Were there other companies that had approached you in the past about an acquisition? If so, what were your reasons for declining in the past?
EN: Numerous organizations have approached me about acquiring The Newman Group since our inception eight years ago. For a variety of reasons the prospects were not attractive, but one of our biggest concerns was that we would lose the autonomy of running the business that we have built.
Will all of TNG’s employees be absorbed into Futurestep, or will any be let go?
EN: Without exception, all of TNG’s employees will be absorbed into Futurestep. This was a very important aspect of the deal for me.
I believe most of the company is based virtually — will they still have the option to telecommute?
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EN: Yes. We will continue to operate virtually, which is an important part of our culture. However a key advantage will be that we will now have office space available should we need it for client and prospect meetings.
How often does the team get together in person? Will this increase or decrease as part of Futurestep?
EN: We have all-hands meetings annually. We may have additional meetings, but I don’t foresee a major increase.
What are some new opportunities that TNG will seek out as part of the Futurestep family?
EN: Prior to acquiring The Newman Group, Futurestep did not have a consulting group separate from their diagnostic processes. So, the biggest opportunity will be to provide our existing services to Futurestep’s global client base.
What are some immediate changes that customers might notice? What about the long-term changes and plans?
EN: There will be no disruption in our service delivery or change in resources on client projects, but thanks to our relationship with Futurestep, now we will have additional service capabilities and a global infrastructure.
In the press release, Bob McNabb said, “The Newman Group provides a level of expertise that will help strengthen Futurestep’s position as an outsourced recruitment leader.” In your opinion, what do you think he means by that quote? In which areas were they lacking and/or what level of expertise will TNG bring to the company?
EN: Futurestep is focused on delivering middle-management recruiting solutions to Fortune 500 and Global 1000 companies. While they do offer consulting as part of their diagnostic processes, they haven’t had a stand-alone consulting services offering. We provide that consulting services capability with a focus on the talent management challenges that their current and potential future clients face. This is a great opportunity to address a pressing need for strategic talent management expertise in a way that complements their current recruiting solutions.