Operational issues demand a lot of attention in a merger, but the ultimate game changer can actually be the brand. Used not just for marketing but as a touchstone for setting the integration agenda, it can be the key to uniting stakeholders and accelerating success.
In a merger, CEOs and leadership teams are confronted with countless decisions and challenges. The checklist overflows with operational issues pertaining to cost rationalization and integration of finance, tax, HR and IT functions.
Often too far down on that list is the issue of brand. After many other things are done, conventional wisdom goes: Make sure you pick a name, decide on a logo and put the appropriate effort into marketing and messaging the new value proposition.
Often delegated to the realm of marketing and communications, these brand to-dos may not be considered among the most critical early integration decisions. Viewed narrowly as a problem to be solved, or merely as an expression of identity, brand is an afterthought — something to focus on when it’s time to put a shine on the combined entity.
But a select group of companies has shown that this is a tremendous mistake. The brand-savvy leaders of General Electic Co. (NYSE: GE), IBM (NYSE: IBM) and 3M Co. (NYSE: MMM), to name a few, put brand in the center of their integration decision-making, using it as a bigger force to successfully bring firms together and create meaningful and enduring impact for the new entity. They regard brand as an emotional force, the glue that binds teams together. Used as a touchstone for setting the integration agenda, brand can separate winning deals from disappointing mash-ups.
If culture, as some academics suggest, is at the root of why mergers tend to disappoint, and the process of defining and articulating brand is synonymous with the process of integrating cultures, then brand should be the first step in uniting two entities and communicating the expectations of leadership.
So what exactly can be done to harness its full potential? In our experience, successful mergers offer several important lessons on how to approach branding a newly merged company for maximum impact.
#1 Create a shared purpose
One of the biggest challenges in a merger is melding two distinct cultures. But brand is a great unifier – bringing separate teams and beliefs together under a common proposition. A shared brand purpose, built from key cultural legacies of each firm, can galvanize teams.
Great brand purposes don’t just align cultures and values; they tell a compelling story about why the company does what it does and the value it brings to customers and stakeholders. Publicly articulated as a promise in the context of a merger, and backed by real proof points, the brand purpose embodies the DNA of the combined enterprise. It sends a powerful signal about what it intends to be, highlighting the shared capabilities and aspirations of two groups coming together as one.
#2 Signal new business vision with the name
The name and identity of a combined organization send a strong signal that positions the company for the future. And just like any other asset, the name merits a rigorous, fact-based assessment that carefully considers the business vision for the merger and what best encapsulates the combined company’s strategy.
Strategic signaling, existing brand equities and required investment levels all need to be factored into the analysis. The resulting naming options can range from (a) a dominant brand strategy when there is clearly a stronger horse with a superior set of equities (Delta after the Northwest merger), to (b) an additive strategy signaling scale and the best of both companies (ExxonMobil), to (c) a transformational strategy indicating a new beginning (Verizon emerging from the Bell Atlantic and Nynex union). Sometimes it can even make sense for an entity to take the name of the acquired firm (as in the case of French logistics company DPDgroup).
#3 Use design as a symbol of change
Determining the logo for the new entity often doesn’t seem like a big deal. But symbols are powerful, and a new logo can play a deceptively important role in uniting cultures and signaling purpose. Viewed as a strategic means to accomplish change, brand inspires many opportunities to creatively combine elements of both companies in a way that signals a fresh endeavor while still honoring the authentic legacy and history of the past.
Think of a visual refresh as a unique chance to add new emotion and energy to an identity, helping to convey the new company’s dynamic aspirations. Even when a logo change is not justified, the brand expression toolkit is rich and varied, with the potential to evoke connections between companies and convey the new brand purpose across many different touchpoints.
#4 Prioritize the employee team
Employees typically face significant uncertainty as they move from their legacy company into a merged company. Integrating different teams, cultural norms and performance systems can be disruptive, making retention a challenge. So how best to rally employees around brand personality traits so they can help build momentum and deliver on the promise of a merger?
Ideally, all parts of an organization should be enrolled and represented in the process of developing, defining and implementing a mission, vision and brand purpose. Employees want to find a sense of belonging in the new organization and be part of something that’s bigger than themselves — something that embodies the DNA, culture and capabilities of the new firm. That “something” is brand.
#5 Integrate the customer experience
Although messaging is important, what the new company truly represents will be defined by actions, not words. The best practices of each legacy company should be systematically identified, preserved and applied to the integrated experience.
Mergers and acquisitions afford the opportunity to “wow” customers in unexpected ways, by bringing the brand purpose to life through new signature experiences that create unique differentiation. During Delta’s merger with Northwest, the company not only focused on on-schedule arrivals and integration of their systems and fleets, but on innovating the gate experience and on finding ways for customer service ambassadors to enhance service. The brand provided the guiding principles to go beyond operational goals and create unique value.
#6 Embrace brand as a strategic compass
When brand issues are addressed too late in the integration process, brand decisions tend to focus on what is easiest to execute quickly as opposed to what will create lasting value. It’s critical to have a plan and systems in place to manage the brand as you would any strategic asset. This requires developing standards to streamline decision-making and guide cohesive brand expression, deploying metrics and tools to track brand vitality, and creating programs to share success stories and keep employees abreast of progress toward achieving the merger’s goals.
Brand is the most powerful, but sometimes the most overlooked, tool for solving many of the common problems in a merger. Leaders who see its full potential — well beyond name and logo — gain a significant leg up on the challenges of uniting companies and cultures. Viewed in the broadest strategic sense, rather than as a name and logo exercise, brand becomes the North Star. It is the focal point for closing culture gaps and setting the integration agenda, for team building and securing up-front buy-in from management and employees, for communicating the story and attributes that will drive the success of any merger.
Allen Gove is a senior Partner in the Strategy Group at Lippincott, where he specializes in brand strategy development including positioning, naming, brand architecture and activation. Richard Wilke is a senior partner and director of global business development at Lippincott.