Brand strategy after a merger
EY reported that global technology mergers and acquisitions activity soared to an all-time high last year. Despite failure rates of 70-90% according to HBR and a run of mega-deal U-turns of the Kraft-Unileverkind, analysts have told us to expect M&A volumes to remain high in 2017. When done in a considered, thoughtful and nuanced way, post-merger brand strategy gives focus and sets a clear path for future growth.
In this, the first in a series on leaders’ questions, we’ll ask how a company can leverage brand strategy for post-merger success. When done in a considered, thoughtful and nuanced way, it gives focus and sets a clear path for future growth. It provides the perfect opportunity to re-evaluate, re-align and renew.
Through our experience with clients over the last four decades, we’ve found there isn’t one solution. We believe in rigour and logic, but we don’t have a framework that leads to a definitive answer. Claude Lévi-Strauss, widely regarded as the father of modern anthropology, said in the first volume of his iconic Mythologiques:
“The scientist is not a person who gives the right answers, he’s one who asks the right questions.”
In the case of M&A brand strategy, the following ten questions are a useful start point:
1. Why are we here?
Financials and diligence surrounding hard factors aside, the best mergers happen when there’s a deeper meeting of minds. Common themes across brand, culture and leadership approach are rich springboards for strategic discussion. Much as differences should be respected, shared values point to a common philosophy. Defining this in the first instance grounds harder-edged debate around future propositions and offers helpful parameters for innovation.
2. How big is our future?
Mergers fall down on short-term thinking and resulting pragmatism. To avoid this, start with a view of long-term success. Be radical and ask, ‘how big is our future?’ Being aligned around the direction of travel and working back from distant points in time is vital. By factoring in moments for measurement and analysis, you’ll ensure transitional objectives add up to annual outcomes – and beyond.
3. Where’s the world going?
Alongside internal ambition and operational reality, external perspective is essential. In planning conversations, global trends should be front-and-centre. Exercises associated with the user experience design discipline can surface previously unanticipated challenge. For example, can you create future-facing profiles or user journeys? Cultivate curiosity and prepare to revisit your conclusions regularly, drawing on Keats’ theory of ‘negative capability’.
4. What’s our story?
The world’s an ever increasingly complex, complicated and noisy place. Your brand strategy and company narrative should slice through with a distinctive point of view that captures who you are, what you believe, how you create value and why it’s important. Your story’s a rallying cry for your new workforce, a clear position for external audiences and a point of competitive difference. Renowned Bulgarian writer Maria Popova has these words of advice:
“A great storyteller is the kindly captain who sails her ship with tremendous wisdom and boundless courage; who points its nose in the direction of horizons and worlds chosen with unflinching idealism and integrity.”
5. Who’s driving it?
By collaborating and involving a cross-section of people in planning, you’ll get a richer result. A multi-disciplinary taskforce with representation from all former entities helps. The post-merger story needs to be crystal clear in the minds of the ultimate brand advocates – employees – so the importance of internal engagement and communication strategy can’t be underestimated. It should substantiate claims, set the agenda and generate excitement around the possibilities the future presents.
6. Who are the audience?
Brand strategy should create trust with shareholders and stakeholders, and build connection with customers. It’s wise to understand what these constituencies need, to craft a compelling story for each and to make sure what you say matches what you deliver. Making this part of the process, and involving the newly-merged leadership team, means everyone’s clear on the mission.
7. How should we organise ourselves?
Brand or product architecture isn’t a flat organizational chart, or an abstract exercise in tidying up. It’s a powerful basis upon which to build understanding around your suite of propositions, and connection with your ambition. It informs visual expression and naming systems, and results in perfect coherence.
There are three basic models: In a monolithic structure or branded house, all products take one name, like Nike. In an endorsed model, all sub-brand names are linked to the name of the masterbrand in some way, like Apple and its i-everythings. In a house of brands like P&G, the corporate brand name operates as a holding company and each product or service is independently named. Having a good knowledge of the theory can facilitate effective decision-making.
8. How should we present ourselves?
Mergers raise questions not just around what you stand for and do, but how you present yourself and communicate. Do your name, visual expression and communication toolkit best represent your needs? Sometimes a tweak is needed; other times it’s a more radical overhaul. With big changes in play, a merger can offer an opportunity to present your new entity to the world in a fresh way.
9. What can we lose?
Mergers usually take place in pursuit of market consolidation and future growth. There will undoubtedly be short-term trade offs as the business realigns around its future, and a brand strategy should make them easy to identify. (This is different from making them easy per se, but that’s no bad thing if you believe Nietzsche’s case for the value of difficulty.) Brand strategy should articulate what the business is becoming, why it’s doing so, how it will happen and the role its audiences will play. This groundwork determines the tone of the transition.
10. What can we learn from others?
It’s obviously worth reading around to see how other companies have steered post-merger brand strategy. Grubhub, a partner of ours, has had recent success. The first generation of a fast and growing group of online food ordering businesses, it merged with Seamless in late 2013. Today they serve diners and corporate businesses from more than 55,000 restaurants in over 1,100 U.S. cities and London.
The team, led by Barbara Martin Coppola (CMO), developed an ambition that was translated into a clear brand strategy, a supporting brand architecture and a communications program made fit for all its audiences. The results have been quick and effective.
“Collaborating with Wolff Olins to develop a thoughtful approach to our brand strategy and architecture has been transformative – for consumers, business users and shareholders. Combined with additional company-wide initiatives, our new brand vision helped us grow orders by 21% and revenue by 36% in 2016, based on year-on-year results.” - Barbara Martin Coppola, CMO
Illustrations by Jack Bedford