M&A Branding Playbook – Part 2

In this episode, we continue with Part 2 of the M&A Branding Playbook. This section is packed with tips and tricks for how to navigate the branding process by listening well and documenting key decisions. If you’re enjoying the Playbook and our podcast, please subscribe and give us a follow on Twitter – @finchbrands or @billgullan

Transcription:

Bill Gullan:

Greetings one and all. This is Real-World Branding. I’m Bill Gullan, President of Finch Brands, a premier boutique brand consultancy. And hey, the audiobook continues. This is fun. I’ve never had a chance to do this and to read stuff that we’ve written. So thank you for joining us. This is the M&A branding playbook as noted in audio form. And today we’re going to go through sections two and three. Section two is start with listening and section three is to make and document key choices. So enjoy.

Bill Gullan:

Section two, start with listening. 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, both 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 process helps ensure people get behind the forward-thinking brand direction. There is a time to listen and a time to lead. This process is not about advocating leadership’s responsibility, but rather collecting insights and identifying opportunities and risks so that decision-makers have an informed well-grounded perspective.

Bill Gullan:

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. Employees. The best brands are built from the inside out. Team members from both current and acquired companies should be welcomed into the process regardless of the structure of the deal, and also be considered a key target audience for process outputs. There are two reasons for this, insight and emotion.

Bill Gullan:

In terms of insight, customer-facing team members see the brand through the clearest lens and can help leadership understand reputational factors germane to decision-making. Often companies involved in an M&A process were previously competitors. This brings a valuable practical perspective to brand equity and the strengths and weaknesses of brands and the deal. Emotion plays a significant role in a change of this magnitude. Engaging employees in this process makes them feel valued and promotes a sense of leadership transparency and integration process that doesn’t harvest teammate insight and manage emotion, risks cultural disunity, lower employee engagement, and loss of top talent. Employees on all sides seek to understand how leadership sees the future of the organization.

Bill Gullan:

Team members, both current and from acquired companies might have concerns about where they fit within the go-forward company and how an evolving culture will shape their day-to-day reality. For this reason, the HR function is a critical partner in the M&A branding effort. Customers, customers of both the acquired and acquiring businesses are obviously key constituents with short and long-term questions that require ready answers and confident communication. Within the learning process, customers and prospects help inform key branding decisions. A skillful voice of the customer insights program can help leadership do the following things. One, understand the relative strength and meaning of existing and acquired brands. Two, help assess opportunity and risk of possible brand changes. Three, document areas of strength and or weakness in the customer journey. Four, expand the company’s point of view on the dynamics shaping the category and customer. Five, uncover customer needs that are not being well met today.

Bill Gullan:

Six, document competitor strengths and reputation. And seven, road test messaging and other post-M&A directions. With the above data in hand, leadership can begin to approach key brand questions around messaging, brand architecture, nomenclature, design approach, and beyond. As noted, this process need not be slow nor expensive.

Bill Gullan:

Other stakeholders. The incredibly high failure rate of mergers and acquisitions often leaves other stakeholders feeling on edge. The go-forward company can provide peace of mind by clearly conveying the benefit and vision for the future of the company. Gathering insights and aligning expectations to them can bring investors, partners, the media, suppliers, and other relevant stakeholders on board with greater efficiency.

Bill Gullan:

Section three, make and document key choices. While a great deal of work goes into the foundation, the overall process is shaped by several key visible decisions that influence the integration process, including some of the following, brand strategy, the brand strategy documents the core ideas on which the emergent company is based. It sets forth the M&A rationale from a branding perspective and defines the go-forward story and its key elements. It establishes for the market and team the basis on which the post-integration entity will compete and win. While the brand strategy is not necessarily public-facing, it acts as a sort of constitution for the company and influences all that comes after.

Bill Gullan:

Informed by various stakeholder insights processes, the brand strategy will include the following positioning for what will the emergent entity stand, target on whom will the emergent entity focus in the sales and marketing realm? Architecture, how will brand relationships be structured and conveyed? And personality, what will the emergent entities notable stylistic qualities be? Part of the larger brand strategy, brand architecture is the structure of how a brand is organized. While M&A activity creates a whole range of brand architecture needs as product lines merge, for example, the highest level of architecture, the corporate name, and logo is one of the most important.

Bill Gullan:

There are four prevailing M&A corporate identity brand architecture strategies as follows one, no change. The acquiring company leaves the brand of the acquired company alone, creating a house of brands approach that maintains distinctive sub-brands after the deal is complete. It’s generally best used in mature categories. When the brands in question are already clearly differentiated and or positioned to different customer segments. Two, fusion. Both partners in a merger or an acquisition integrate brand identity assets into an involved corporate identity, this approach is geared more towards managing risk than activating potential, preventing large-scale team and customer alienation. It heralds newness but references key deal components in ways that convey a connection to heritage. One-off used fusion example is an endorsed brand architecture in which the acquired company is powered by or a division of the master brand.

Bill Gullan:

Three, stronger horse. One brand often of the company that initiated the acquisition or the larger, more dominant brand is elevated. It’s simple and clear, but there are risks related to brand equity and customer relationship destruction. This approach requires significant communication to both the team in the marketplace. And four, new brand. Development of an entirely new identity. It’s usually most appropriate in categories undergoing a high degree of transformation. This approach can be costly, time-consuming, and risky as it relates to protecting brand equity and customer relationships. But it has the greatest ability to create something that is perceptually new and innovative.

Bill Gullan:

Each approach has its own pros and cons. The right answer is based on company, category, customer, culture, and other distinctive situational characteristics. While these options define the desired steady-state, it is also very likely that going from here to there requires a migration strategy that documents transitional steps and key milestones along that journey. For example, a company may use an endorsed brand architecture to connect M&A brands for a period of time. The intent of a migration strategy is to protect brand equity during a transition.

Bill Gullan:

Brand design. While there are a range of downstream design questions, the focus here is on-brand design at the visual identity level. How will the logo system and overall style of the brand shift post-M&A? If a new name is adopted, that will clearly prompt design needs yet progressive brand design can signal newness and freshness post-M&A even if existing names remain in place. There are a variety of reasons to use the M&A moment as the right time for a design refresh, such as it conveys to the market a sense of progress and energy to go along with M&A activity, it conveys to acquired company employees that their integration makes a difference, and it takes advantage of a newsworthy window to introduce something new and get noticed. The role of brand design is to express the ideology and spirit of the emergent entity. There are a range of ways to do that. Sometimes even the name and logo can remain, but a company can use surrounding styles or particularly high-value assets, such as website, packaging, trade show booth, et cetera, to think differently and chart a future course.

Bill Gullan:

Let’s leave off there for today. Hope you’re enjoying our focus on M&A brand choices. We find these projects to be distinctive from a situational perspective. They’re all different yet fascinating. Each of them in different ways. There are three ways as always to support us here at Real-World Branding. The first is to click subscribe in the podcast app of your choice that will make sure you do not miss a single episode. I know our schedule has been inconsistent and by clicking subscribe we’ll make sure that whenever there’s new content, it’ll float down magically to your device. The second way is to give us a review, or a rating, or a comment within also the podcast app or store of your choice. Five stars if we’ve earned it, but either way, our skin is thick and we’d love to hear from listeners on how we’re doing.

Bill Gullan:

And we also find that rating and reviewing gives others the chance, a better chance to find us if this is the type of thing that they’re looking for. And then lastly, let’s keep the dialogue going on Twitter @billgullan at Finch Brands, comments, questions, ideas for future guests, future topics. We really do appreciate that dialogue. And it’s part of what makes doing this show worthwhile. So we’ll sign off for the cradle of Liberty.