The Brand Way to M&A: Part Two — Galvanize the Culture

7 min read

Mergers and Acquisitions Part 2

ave you ever been part of something that suddenly changed? Maybe your school was absorbed by another. Or your sports team turned over its coaching staff. Or your company was acquired by a competitor. Each of these scenarios is different, but there’s a common thread for the people involved: the shake-up of a community. And all of the accompanying emotional and cultural implications.

Hear us when we say this: a shake-up isn’t an inherently bad thing. It can be a stressful thing. And a little disorienting, even. But it can also be exciting. Fresh. Full of opportunity. This is how a shake-up transforms into an awakening. And after a merger or acquisition, brand — particularly employer brand — shines the light that welcomes new dawns.

Here, in Part Two of our three-part series on branding and M&A in the B2B tech industry, we examine brand’s ability to rally workplace communities and culture in times of great change. Part One of our series covered the necessary evaluation and brand architecture considerations companies must explore in the immediate aftermath of a merger or acquisition. Part Three will look at best practices for brand rollout. Now, though, we turn our attention to your people: the heart of your organization, the narratives that unite them, and the way we show the world what we’re truly all about.

Success: it’s money … and a lot more

We’re with you. The financials are important. The bottom line is the bottom line — but there’s a good chance a merger or acquisition will bottom out if leaders struggle to galvanize company culture. In a recent study by Deloitte, 30% of merger and acquisition integrations failed because of culture issues. That’s worth repeating: almost a third of M&A integrations fail because we don’t have our finger on the pulse of our people.

Before we address how to see, hear, and represent our people, let’s define what we mean by culture. And let’s start by looking beyond terms like “employee engagement,” as the experts at McKinsey suggest; indeed, culture is the realization of company mission and vision, core values, and the practices and mindsets that get work done.

Consider Disney's 2006 acquisition of Pixar. Yes, the groundwork for a successful merger was already there — the companies had been working together for years and knew each other's skill sets — but Disney was particularly careful when it came to Pixar's culture. Why? Because it was an engine for creativity. The mindset was magic, and it was working.

Now, almost two decades later, people will tell you culture is even more important. In a survey of C-suite executives, Accenture found that 75% of leaders said the talent and culture components of M&A had increased in importance since the start of the COVID-19 pandemic. Let’s think about that for a moment: in the past few years, as remote work has become more common and workplace stressors — whether a pandemic or a pivot in the economy — have been pronounced, the connections people have with each other and with their organizations are truly vital.

And this brings us to another critical truth about culture: it is not a commodity. It is not something that can be quickly spun up and “sold” to employees — if it is, it won’t stick. Instead, culture is a co-creation and an invitation. Before we can get to buy-in, we have to foster engagement. And to do that, we need the right energy.

Employer brand: it’s how we galvanize culture

The right energy? Let’s talk about the wrong kind, first — some of these missteps:

• Failing to spin up a change management team
• Neglecting to create a long-term culture integration strategy
• Not involving employees (or at least key representatives) in conversations about the future
• Forcing change where it’s not needed

Let’s dig into that last bullet point a bit more: Disney’s acquisition of Pixar provides a good example. In a scenario like this — two entities with strong brand recognition and a track record of high performance — maybe it doesn’t make sense for the acquiring party to barge into the offices of its new acquisition and move the water color, change up the music, and rewrite their purpose, mission, and vision statements. But … not every merger is like this. In fact, most mergers will require give and take. (Think about the different brand architecture arrangements we noted in Part One and the effects those have on employees and a companies’ employer brands.)

So, what’s the right energy, then? At Focus Lab, we believe in the power of employer brand to bring people together and ease tension. That calming, unifying outcome begins with a mindset, one we think looks like this:

• Commitment: a concerted and visible effort by leadership that is honest about change, optimistic about the future, and sensitive to employees’ feelings.
• Collaboration: an inclusive approach that invites a swath of employees to not only weigh in, but work together to build something that represents them.
• Compromise: the acknowledgement that there are two sides in every M&A, and both sides will have to give a little to gain a lot more.
• Courage: the conviction to let things go.

In practice, we see that mindset translating into real outcomes:

• New or revised core messaging statements (purpose, mission, vision)
• Fresh core values
• Audience messaging frameworks that not only cater to customers, but to current and future employees
• Brand stories that chart an exciting new direction for the company

At Focus Lab, we’re such believers in the power of employer brand because we have a front row seat to it — take our partnership with Luminate. Our friends driving the future of music and entertainment data were incredibly sensitive and committed to creating a brand that everyone could rally around, and they took key steps to make it happen. In addition to creating new core statements — and not just to reflect their evolving positioning, but to amplify the pride of their work — they participated in a core values workshop. That workshop invited voices from all over the company: C-suite leadership, human resources, product and technology, etc. And those very stakeholders worked with the project team to craft new values that emphasized Luminate’s character and personality. What’s more, Luminate developed a specific audience messaging framework for their employer brand to communicate internally and to prospective hires.

Luminate’s approach — and others who are so intentional to consider their employer brand post-M&A — is savvy. Especially considering the perception gap that often exists between leadership and employers: both parties increasingly avow the importance of representative culture and belonging, but employees perceive leaders to care less about it than they actually do. One way to combat and correct this is through action. Visible. Inclusive. Action.

Our people: they’re our best ambassadors

There’s no one-size-fits-all approach to employer branding post-M&A. Depending on the parties involved, the type of organizational architecture that results, and so many other factors, it’s truly a case-by-case endeavor. But there is one constant: the resiliency of people. Of communities.

We see this out in the world, we see this in the world of work: people can and will rise to the occasion. Especially when there are more reasons to believe better days are ahead. When post-M&A employer branding is done right, it’s more than just a few new statements in the handbook and fresh swag. It’s the company and its leadership telling each employee how they will benefit from this event. Maybe it’s the chance to learn new skills and wield game-changing technology. Or the opportunity to collaborate with new colleagues to create new products. Maybe it’s the prospect of growth — after all, a growing company means greater returns for employees.

It’s all of these things and many more. When employer branding drills down into the impacts at the individual level and communicates them effectively, employees have more reasons to believe. And when employees believe, customers will too.

The Brand Way to M&A: Part Three — Go to Market Better than Before

Photos by Chris Linnett, Martin Martz and Possessed Photography on Unsplash

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