The Brand Way to M&A: Part One — Get a Game Plan
Think of a time you witnessed two forces forming something new. Maybe a couple of your go-to restaurateurs cooked up a fresh fusion joint. Or a sports franchise relocated to your city. Or a pair of your favorite artists spun up an album that was … unexpected. Were you excited? Leery? Hopeful? Confused? All of the above? Understandably so. And now here you are, on the heels of a merger and acquisition, helping the people you lead and customers you serve navigate the same emotions. For this new journey, you have a powerful compass: brand.
Brand? Yes. Mergers and acquisitions are pivotal moments because they’re more than just the melding of companies’ systems and structures, they’re the blending of beliefs, values, and people — culture! Which makes them a powerful opportunity to create an identity that transcends the sum of its parts. That identity becomes a North Star, rallying employees for a new adventure, announcing to customers the birth of something better. More than just a new logo or slogan, a strategic brand is a signal to your industry and the world: We’re making bold moves that matter, we’re blazing new trails and challenging convention. Brand leads the way.
In this three-part series, we’ll share the steps to successfully leverage branding after a merger or acquisition. In Part One, we’ll show how strategic brand architecture aligns identities, values, and market positioning. In Part Two, we’ll examine how a new brand narrative — compelling purpose and mission statements, brave visions, and more — unite internal stakeholders and fuel momentum toward shared goals. And in Part Three, we’ll celebrate the unveiling of a fresh, cohesive brand and how to launch it with gusto into the world. So, let’s begin with the critical first steps brands must take post-M&A to chart bright futures: evaluation, architecture, and traction.
Evaluation: the work that can’t wait
Tom Petty is a genius. The Heartbreakers’ frontman clearly reminds us all that, indeed, the waiting is the hardest part. And while Petty is singing about love, we can hear his wisdom as guiding our line of work: the longer you wait to make critical brand decisions post-M&A, the harder it gets for everyone involved. Especially your customers.
Consider this: While 78% of respondents in a recent Deloitte study said their company is “prepared to launch integration activities” following a deal, that leaves almost a quarter who aren’t. That stat implies that, too often, critical conversations haven’t taken place. And when merging entities leave things unsaid — like failing to expeditiously evaluate and suss out the integration of multiple brands, for instance — chaos ensues. “Companies end up with a confusing mix of brands and product lines that make little sense internally, and even less so to their customers,” writes Brandingo’s Matt Bowen, who further notes such problems can endure “even years after the M&A.” So, what to do? Gather your leadership for two tasks.
First, define your business goals and offerings. A solid framework to guide this effort is Kartik Bhavsar’s four C’s: Customers, Capabilities, Culture, and Communication. We appreciate this approach because — like branding itself — it’s inclusive of internal and external audiences, considers products and how people experience them, and encourages clear and candid thinking about what to say and how to say it. In other words, it focuses on what matters most, and Bhavsar reminds us that our customers are top priority. In the wake of a merger, the ability to emphasize who your ideal customer is, what they value, and how your capabilities answer the call is paramount.
Second, bring in third-party experts for an evaluation of your brands. As Steve Wunker notes in Business Strategy Insider, outsiders “provide an unbiased opinion on how new the idea really seems.” This is critical for B2B tech brands, whose offerings are often exceptionally complex with nuances that are lost on people outside their industry. “For those who don’t understand the technical magnificence of what you’ve accomplished, does the idea really seem innovative?” Wunker writes. Another benefit: third-party experts are also less attached to tradition and legacy. Because mergers and acquisitions are emotional rollercoasters, it’s tempting to cling to the familiar — change is hard! But an unbiased perspective can help you let go of what’s holding you back and build on what will carry you forward.
The way ahead begins with strategic research and evaluation. As outside experts, we help clients by offering a clear picture of their current brands’ perceptions, a key consideration in a newly formed company’s identity. We paint this picture by educating ourselves on your offerings, industry, and audiences, and evaluating where you stand in respect to competitors. If you’ve clearly defined your post-M&A business goals, our strategy work will help shed light on potential risks involved with change, the best management strategy for your new portfolio of brands, and more. And that leads us to brand architecture — a vital consideration for your company’s future.
Architecture: the right house holds the future
We won’t bury the lead: brands with clear architecture perform better. Why? Because they create a more consistent experience. And presenting a consistent brand can increase revenue by 23%. But what is brand architecture, and what are the most important considerations post-M&A?
Brand architecture defines the different levels within your brand portfolio and provides a hierarchy showing the relationships between different products and services in your offerings. Here’s the key, though: that hierarchy must solve for customer audiences first, and it has to be foundational for the brand’s future. Oh, one more thing: it’s not necessarily built around the most popular brand in a company’s portfolio.
Instead of popularity, consider practicality and potential. Have you got a big marketing team that’s appealing to audiences with similar needs and values? Then an all-encompassing brand identity — what we call a Branded House — makes sense. Google and Focus Lab clients Luminate and Zuora are such brands.
But maybe you’ve got an aggressive M&A strategy with more prospects on the horizon, and you need a lot of flexibility. (Or maybe you need to create some space between the parent brand and other products.) A House of Brands hierarchy — think Block, or our client Reify Health — will fit the bill.
We’ve worked with our clients to develop both hierarchies — deciding between the two is the first fork in the road for many of our clients. Still, there are other hybrid approaches we’ve helped develop. The experience is challenging, but very rewarding. Establishing architecture can provide newfound vision on future offerings and product trajectory. Relatedly, it can help clarify and evolve brand’s positioning — the best-fit architecture becomes clearer the better we’re able to articulate our differentiators, identify new ones, and know why they matter to our best-fit customers. Put simply, it’s a moment that begins to illuminate the most compelling, impactful version of a company, and a springboard for finding the ideal way to tell its story.
Traction: it’s Time to Take the Next Step
Let’s recap: You’ve gathered your team internally and done some soul searching. You’ve invited outside experts to come in and keep you honest. You’ve partnered with an agency to get your house (read: architecture) in order. Now what?
Resist the urge to start blurting out a new brand story and propping up a new About page. Don’t start futzing with logos and brand colors. Instead, make a plan. Select a (realistic!) target date to roll out your new brand and work backwards. And work with a team of outside experts who can help create quality, consistent brand assets, verbal and visual, for a cohesive identity.
At Focus Lab, the identity work begins in full with an exploration and enhancement of brand messaging, from core values to brand story, with the pointed goal of creating a seamless narrative that celebrates your arrival on the world’s stage — this is where we’ll travel together, in Part Two of our series.