Mergers & acquisitions require more than a brand refresh.
As someone responsible for dozens of successful mergers & acquisitions (M&A) on behalf of our clients, Finch Brands has uncovered a wealth of real-world truths and actionable insights that could help you navigate the high-stakes M&A branding process and manage the transformational changes M&A bring about.
We hope these real-world truths can help guide you on your journey:
Truth #1. M&A branding is business transformation.
There’s no mistaking that change is everywhere and for many, M&A is at the center of the change. Studies show that M&A activity continues to boom, especially in the areas of healthcare, telecommunications, financial services, and banking. M&A is the veritable snowball rolling downhill continually gaining speed and mass.
There is a downside to all this. Research shows that up to 80% of all M&A scenarios fail. Proving that M&A can also be a high-wire act requiring high-stakes decisions that C-suites continue to struggle with. It’s now estimated that nearly $200 billion have been destroyed by failed mergers and acquisitions. Some believe that at the heart of this is inadequately executed M&A branding processes. The stakes are too high to overlook the role a brand can play in the success of an M&A scenario.
Truth #2. Beware the blind spots.
Brand can be a catalyst in the M&A process, but many leaders simply do not have the perspective that comes with a rotation in marketing or brand development roles in one’s career. Many leaders come with backgrounds in operations and finance. Therefore, many critical aspects of the role of brand can be overlooked. Blind spots occur and risks emerge.
That’s why it’s important to have someone experienced in brand and the best practices of branding processes to help guide you in your decisions.
Truth #3. The popular choice may be the most detrimental choice.
Studies now show that the most popular decisions leadership has made have destroyed the most value through failed deals. This reminds us of the line of lemmings following each other over the cliff. A big reason for this is that leaders are trained to be decisive. Be deliberate. Act. Move on. This approach might work in many business situations but could spell disaster in a M&A branding scenario.
When the wrong brand choices are made (or important considerations are completely ignored), one risks large-scale equity destruction or failure to create new brand value. Get the branding right from the start and commercial aspects of M&A have a much higher likelihood of success. Further, every M&A has its own situational considerations and should be addressed with that in mind.
Truth #4. You are the signals you send.
Brand building is important for any company but especially so in the case of M&A—in a transaction, the newly-formed organization and its brands are in transition by definition. The company is not only setting expectations—it might be setting out to, in fact, change them. Thus, the team is tasked with assessing established brands, considering everything that comes with them (heritage, emotion, vision, brand promise, and more), and charting a path forward. And these decisions are often made against a backdrop of time pressure, many moving parts, and team/market uncertainty.
When executed effectively, M&A brand development sends important signals to all stakeholders about the vision of the proposed entity. It not only sets the stage for what’s next but also for what’s to come and what it all means. For employees, customers, stakeholders, and future acquisitions. Disseminating carefully crafted and well-placed signals are critical to getting everyone to rally around a shared, purposeful goal.
We believe that the best brands are built from the inside out. Engaged employees create happy customers.
Truth #5. Leaders lead by listening.
A successful M&A journey begins with empathy at its center. Such a transition cannot be a top-down approach.
Experience shows us that a comprehensive yet efficient active listening process informs key decisions and sets the stage for cultural buy-in. As with most M&A decisions, the branding process involves navigating the many data sets, opinions, emotions and needs of employees (existing and new), customers and other stakeholders.
And while it’s impossible to create a go-forward brand plan that aligns to everyone’s expectations, learning from and getting buy-in from all groups is crucial to the success of the branding process. The process by which branding decisions are made is often just as important as the content of those decisions—a wider, more inclusive process helps ensure people get behind the forward-focused brand direction.
Truth #6. The choice is yours…so is the responsibility.
It is critical that every brand choice made along the way is made with the utmost confidence and, ultimately, accountability. There is a time to listen and a time to lead—this process is not about abdicating leadership’s responsibility but rather collecting insights and identifying opportunities and risks so that decision-makers have an informed, well-grounded perspective.
Creating a comprehensive yet efficient stakeholder insights process can ensure decision-makers are well-informed when it comes to perceptions, risks, and opportunities of various branding directions.
Truth #7. You only get one chance at a Day 1 experience.
As the old trope says, “you only get one chance to make a lasting impression.” The same holds true for Day 1. You get one shot at it so make it count.
Day 1 is the actual launch of the “new” brand to the world. This doesn’t need to track exactly with the timing of the legal or regulatory closing of a deal. In fact, companies who do this can add unnecessary pressure and risk disrupting the best practice of M&A branding. As long as the communications plan is well-executed, it is usually OK for brand Day 1 to be a date of the company’s choosing, often made to coincide with a key trade show, new quarter, or other milestone event. You want to set yourself up to be successful so leverage the process in your favor.
Typical Day 1 activities can include a new website going live, an earned media press push, wide distribution of new brand content, virtual or live events, and some form of account of sales contact to each customer. The goal is to maximize the spotlight moment that comes with something new and noteworthy, which is what M&A creates.
Day 1 itself should be momentous and inclusive but it need not be a complete “flip the switch” moment. The marketplace understands that the full process of updating elements such as collateral, business cards, presentation design, signage and other artifacts is often a phased-in approach.
Consistency ultimately matters a great deal, yet it’s okay if it takes a little while to achieve. A structured brand rollout plan can cover pre-Day 1, Day 1 itself, and Day 1-100.
Finch Brands has great experience in helping clients navigate their M&A journey by realizing the impact of a well-articulated brand. We want to help you navigate your journey with the help of the truths discussed here. Fact is, there are many other real-world truths we can build on and explore together.