Dusseldorf For many years, the strategy consultancy Kearney was primarily concerned with itself. Now, with a series of takeovers, the company is again trying to narrow the gap to the competition. The company has now bought the traditional German product design company Teams.
“By taking on Teams Design, we are positioning ourselves more broadly and attacking the consulting factories directly,” says Marc Lakner in an interview with the Handelsblatt. The industry optimizer has been running the Kearney businesses in Germany, Austria and Switzerland since the beginning of the year,
By “consulting factories” Lakner means the much larger strategy consultancies McKinsey, Boston Consulting Group (BCG) and Bain. You do a lot more business. With a turnover of around 1.7 billion dollars and around 5,300 employees, including 400 partners, Kearney represents one eighth of McKinsey.
However, the strong growth of the three leading strategy consultancies has recently stalled. The world’s number one, McKinsey, only managed a single-digit increase in sales in 2022 and laid off its own employees for the first time in its history in the current year.
Kearney shares a history and unique competition with the market leader. Founder Tom Kearney was once a managing partner of McKinsey before starting his own business in 1939. Even then, the American was pursuing a somewhat different consulting approach: he not only developed new strategies for clients, but also put more effort into implementation. Kearney feels committed to this tradition to this day.
The acquisition of Teams continues the company’s early strategy of aggressive growth. In the past four years, the partnership has already acquired Cervello, a US data and analytics provider, Prokura, a procurement and supply chain consultancy from Scandinavia, and Optano, a provider of AI-driven operations optimization solutions from Germany.
Kearney boss Alex Liu has now managed a small coup with teams. The industrial design company was founded in Germany in 1956 and now has studios in Chicago, Shanghai, Hamburg and Stuttgart.
Customers include well-known consumer and equipment brands, as well as medical technology companies. Ideas and innovations from the strategic design experts can be found in products such as Bosch power tools, Kärcher cleaning machines, Hitachi air conditioners and X-ray machines from Siemens Healthineers.
The approximately 80 team employees will now help Kearney to position itself even more comprehensively in the market and thus expand the classic consulting business to include implementation.
Marc Lakner drives expansion in Germany
The driving force behind the new expansion in Germany is Marc Lakner. The 47-year-old is an expert in transformations in global supply chains and production. He followed Martin Eisenhut in January and has since managed the 45 partners and around 500 employees.
The industrial engineer, who has a doctorate, started his career at Kearney and has already worked as a consultant in Brazil, Mexico, Singapore, the USA and China. His customers include automotive suppliers like Bosch, high-tech companies like ASMPT and consumer goods groups like Henkel.
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Over the past few weeks, he has been driving the complete takeover of teams with an international team at Kearney from the Berlin office. An investment bank or M&A advisor was not involved. The Teams Design brand name should remain in place.
“We are very confident that this acquisition will pay off for us,” says Lakner. The demand for consulting services is higher than ever, and a comprehensive approach is increasingly required. “We don’t leave our customers alone with our ideas in their strategic transformation, we help implement them.” This can now also be done with our own experienced design experts.
Kearney is back with acquisitions
For Klaus Baumgartner, managing partner of Teams Design in Stuttgart, the connection to Kearney is a “logical step in order to continue to grow together”. Both companies have been working together for six years and now want to do it more intensively. All shareholders and managing directors who have been active to date have remained on board as managing directors.
Industry expert Dietmar Fink is not surprised that Kearney is now reporting back with takeovers after a few years: “Kearney is in the same position as Roland Berger. The consultants do very decent business, but overall the companies are too small to be able to compete internationally with the big three,” says the managing director of the Scientific Society for Management Consulting. Companies with less than two to three billion euros in sales are condemned to strong growth.
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However, the urge for greater size and influence has not always been met with success. After the consultancy had grown very rapidly in the 1990s, Kearney joined the Texas IT service provider EDS. This went well until the company bosses wanted to classify the self-confident consultants as ordinary managers.
In 2005, the separation took place through a management buy-out. The management team around the approximately 200 partners of AT Kearney, as the consultancy was called up to the year 2000, bought back their company completely. But that’s not all the unrest: In 2010, Kearney flirted with the consulting firm Booz. However, there was no merger.
The consultant market is consolidating
While large mergers and takeovers in the consulting industry are rather rare and even more rarely crowned with success, the market is consolidating noticeably. The large consulting firms in particular buy smaller and medium-sized competitors in order to position themselves qualitatively in future topics such as artificial intelligence (AI) or sustainability.
McKinsey bought the AI specialist Quantum Black in 2015 and BCG the sustainability consultancy Quantis in 2022. The German number one, Roland Berger, joined the Candidus team in 2022 and thus entered the popular interim management business.
The IT consulting giant Accenture has been the most aggressive in recent years. The listed group bought more than a dozen companies in order to broaden its IT expertise. The fact that the integration of the many companies will not succeed without further ado is shown by the layoffs now planned, with the order situation continuing to be very good.
Lakner’s predecessor Eisenhut had managed the Kearney business in this country for six years. The 60-year-old has been the new boss of the packaging specialist Transpak from Wetzlar in Hesse since the beginning of the month. He is now doing what he previously only accompanied in the old Kearney tradition: leading a company operationally through the transformation.
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