In any merger, CEOs and leadership teams are confronted with countless decisions and challenges. The checklist overflows with operational issues pertaining to cost rationalization and integration of finance, tax, HR and IT functions.
But brand is the most powerful — but often the most overlooked — tool for solving many of the common problems in a merger. Rather than viewing branding in a merger as little more than a name-and-logo exercise, the brand should serve as a compass to synchronize the new company’s internal culture and represent the its values to the outside world.
If culture — as some academics suggest — is at the root of why mergers tend to disappoint, and the process of defining and articulating the brand is synonymous with the process of integrating cultures, then branding should be among first steps in uniting two entities. This holds true regardless of the type of merger or whether the merger involves a name change or new visual identity. Embracing brand as a lens for guiding decision-making will help:
- Reduce employee and customer uncertainty and turnover.
- Enhance internal cooperation and facilitate team building.
- Signal a fresh strategy to the outside world.
- Build new energy and alignment in the leadership team.
- Forge common behaviors that support the new organization.
- Purge tired “legacy perceptions.”
- Tell a more compelling story to investors and the press.
The investment in brand required to achieve these goals is often modest in comparison to other deal-related expenditures, and portions of it can potentially be capitalized like other merger-related costs. It can also be a highly leveraged way of increasing ROI from other deal activities, linking brand and culture to measurable business results and mitigating integration risk.
1. Create a Shared Purpose
One of the biggest challenges in a merger is melding two distinct cultures. But brand can be a great unifier — bringing separate teams and beliefs together under a common proposition. A shared brand purpose, built from key cultural legacies of each firm, can galvanize teams.
Great brand purposes don’t just align cultures and values; they tell a compelling story about why the company does what it does and the value it brings to customers and stakeholders. What is the new company about and how will it be different? How will it win? Where does the value creation in the merger lie and how must the organization be aligned to deliver that?
If these key questions are answered early and in a simple way, with a powerful brand narrative built through a collaborative team process, the result can be a brand strategy that succinctly conveys the purpose, differentiation and personality of a new entity in a way that brings both alignment and clarification.
2. Signal New Business Vision With the Name
The name and identity of a combined organization send a strong signal that positions the company for the future. The risk is that name and identity get caught up in power and politics, and near-term emotions driven by pride and ownership issues.
The company name, just like any other asset, merits a rigorous, fact-based assessment that carefully considers the business vision for the merger and what best encapsulates the combined company’s strategy. Objective research is critical to rationalizing a merged company’s overall brand portfolio and determining the optimal hierarchy or architecture that is going to define the relationship between the company brand and all of the products or sub-brands.
Bringing methodological rigor to such questions will not only help determine brand changes. An analytical approach can also temper defensiveness and egos among executives.
3. Use Design as a Symbol of Change
Determining the logo for the new entity often doesn’t seem like a big deal, but symbols are powerful. A new logo can play a deceptively important role in uniting cultures and signaling the purpose of the new entity.
Viewed as a strategic means to accomplish change, brand identity can creatively combine elements of both companies in a way that signals a fresh endeavor while still honoring the authentic legacy and history of the past. Think of a visual refresh as a unique chance to add new emotion and energy to an identity, helping to convey the new company’s dynamic aspirations.
4. Prioritize the Employee Team
Employees typically face significant uncertainty as they move from their legacy company into a merged company. Integrating different teams, cultural norms and performance systems can be disruptive, making retention a challenge. So how best to rally employees around brand personality traits so they can help build momentum and deliver on the promise of a merger?
Merger integration is a time when teams are paying attention, ready for involvement and eager for communication and direction. Embrace this opportunity with multifaceted brand-engagement programs that are exciting, participative and inclusive. Bring them into the process early. Ideally, all parts of both organizations should be represented in this process. Employees want to find a sense of belonging in the new organization and be part of something that’s bigger than themselves — a brand that embodies the DNA, culture and capabilities of the new organization.
5. Integrate the Customer Experience
What the new company truly represents will be defined by actions, not words. The brand can serve as a guidepost for identifying the experiential hallmarks of the new company — the event sponsorships and community outreach efforts that matter most, the service standards, how customers are treated. The best practices of each legacy company need to be systematically identified, preserved and applied to the integrated experience. A merger or acquisition also affords the opportunity to “wow” customers in unexpected ways, by bringing the brand purpose to life through new signature experiences that create unique differentiation.
6. Embrace Brand as a Strategic Compass
When brand issues are addressed too late in the integration process, brand decisions tend to focus on what is easiest to execute quickly as opposed to what will create meaningful and lasting value.
Early in the merger process, both brands need to be assessed, and the purpose and scope of any rebranding effort must be clearly defined. Focus on leveraging the new brand as a strategic tool to foster emotional engagement, unite disparate cultures and create a shared platform for making decisions. Begin to develop an employee engagement strategy and determine how success in rebranding will be measured.
As the deal progresses, create and refine an identity system that will bring the brand to life both visually and verbally. Plan a “brand conversion strategy” so that focuses on touchpoints that will have the greatest impact.
After you’ve rolled out the merged entity, it’s important to have a plan that allows you to streamline decision-making and guides cohesive brand expression. You need to think ahead, and establish metrics to track brand vitality. Look to share success stories, and keep employees engaged.
Download the White Paper
Lippincott has been a leader in corporate brand building for over 70 years. They are among the most respected pioneers in the discipline of corporate identity creation, helping bring many leading brands together in mergers — Exxon and Mobil, Delta and Northwest Airlines, Stanley and Black & Decker, among many others. Through this experience, they have learned critical lessons about the role brand can play in making mergers successful, and how to approach merger branding in a way that creates the most lasting value for the newly-formed company. You can download their white paper, “Unlocking M&A Success: The Hidden Value of Brand,” by clicking here.