The most common way companies perceive branding during a merger would be as a prescribed checklist of tasks that should be done after all the important operations have been taken care of. In the mind of decision-makers, M&A branding would be a nice-to-have afterthought.
The line of thought might go something like this: it would be appropriate to give the newly-formed company some chic and charm, so let’s design a new logo, shape up our tone of voice, and maybe refresh that visual identity to give it some punch and style. So branding becomes a problem to be solved: a to-do list, which usually ends up delegated on some desk within the marketing department down the hall, and everybody trusts in its best execution (while feeling accomplished that now, there is one less thing to worry about).
And then there is a second way that firms view branding – and this includes the standpoint of companies like IBM, GE and 3M during their acquiring stages. They see a brand as an integral part of the M&A strategy. Here, the decision makers plan their branding carefully and strategically and in the early stages of the process. They treat branding as if it had a real potential to tilt the success curve of the whole deal.
And as a matter of fact, it can. As Harvard Business Review pointed out, 70%–90% of mergers end up being failures. This is for their incapacity to create value for stakeholders, employees and customers. Another thing the review didn’t forget to mention was that the culprit of the operation oftentimes happened to be inadequate branding.
A well-crafted brand strategy can bring people and firms together and point them towards a new, shared direction. Greatly overlapping with company culture, the effect of a well-executed branding spills over from the marketing department to other organizational sectors and acts as a sticky paste between them, gluing together the vision of all parties involved.
Good M&A branding:
- enhances and introduces behaviors that support the newly-formed organization
- gets strategically rid of thought patterns and legacies that no longer serve their purpose
- is akin to a good spring house cleaning: it appeases the anxious mind and creates space for the right patterns to be formed in the upcoming months
- works from the inside out and almost as a consequence, it signals a compelling story to the outside world including the investors, clients and the press
M&A Branding – Action plan
There are three actionable steps that you can take in order to ensure a merger success through brand:
1. Give a unified direction
Bringing people together is often what is needed the most in the vulnerable times of M&A: Not only does quality branding help ease employee uncertainty around the upcoming workplace changes, it also enhances collaboration between teams and the newly joint companies. The tendency to get into the defender mode and protect each one’s own culture can be replaced with a shared excitement for what comes next.
Answer the upcoming questions early and clearly:
- Why are you merging these companies and what is the new company about?
- How will it be better than the sum of its parts?
- Where is the additional value that arises from the merger?
- What needs to be done in order for this value to be delivered?
As you can see, good branding is firmly tied to the roots of an M&A strategy. That’s why starting early and being crystal clear with your intent will set you off to a good start – and you can start uniting two distinct cultures and finding common ground.
2. Base your creative choices on facts
Carefully examine the business vision and align the new company name accordingly. Factors such as strategic signaling, existing brand equities and investment needed should be incorporated into your decision-making process.
Most common M&A naming strategies include:
- Taking the name of the acquiring firm (as Delta did after the Northwest merger)
- Going for the additive strategy and choosing the “best of both worlds” (ExxonMobil)
- Choosing a new beginning ( Bell Atlantic and NYNEX merging into Verizon)
- Taking the name of the acquired firm (as in the case of GeoPost acquiring DPDgroup)
Also, when it comes to the visual part of branding and logo design, keep your eye on the strategy. Symbols can act as powerful agents on our perception, so when seeking to unite disparate groups and communicate one common vision, double-check on being appropriate before moving on.
The trick is to merge facets of the two companies: you want to honor their legacy, while getting rid of patterns that no longer serve their purpose – all while adding something new that will convey the emerging firm’s future aspirations.
3. Let people join in
Chances are that your employees already want to be part of what’s going on, especially the upcoming changes, and your role is to allow them exactly that. Engage them through various brand programs that elicit participation. Keep them excited.
Focus on two things:
- How will the new brand identity sculpt the everyday business of your employees?
- How will you move from merely communicating the new values, mission and vision statements to achieving measurable behavior changes in your people that will have an influence on the business?
As for your customers, doing it is more than saying it. In other words, create experiences for your customers that align with the new brand, and let them bring it to life. For inspiration, have a look at what Delta did after merging with Northwest: mainly, the company created a state-of-the-art gate experience for the passengers and made sure that the planes were always arriving on time. This alone generated a strong enough effect on customers.
M&A Branding – Timeline
To sum up the three steps, here are some practical notes on what to focus on in each stage of a merger:
- In the pre-deal stage, come up with an engagement strategy for your people and decide on how you will measure success in M&A branding. Focus on uniting your employees.
- In the post-deal stage, establish the final brand purpose together with its differentiation strategy. Make the brand come alive visually and verbally. Bring on the new logo and name. In terms of costs, go for the big effect – low effort – low investment equation.
- Once the deal is closed, know that you have only started walking the brand-building route. Create a plan on how you will manage the brand, make decisions and measure the brand’s performance (such as tracking its vitality).
Brand as M&A north star
Brand is one of the most potent and the most overlooked strategic assets a company can have. When integrated early on into the M&A process, it can go way beyond a good naming and a logo. The superpower of branding lies in its potential to unite people and cultures and point them towards one common and compelling direction, thus keeping the high vulnerability of a transforming company at bay.
