In the heady days of cheap and plentiful finance and relaxed governance, before the US-driven collapse of financial markets set in, there were a considerable number of companies looking to float, raise capital and merge.
Where did they all go? As you would expect, when reality hit the fan many of these thought twice about such brave moves, and hid their plans in the back of a deep cupboard drawer labelled ‘Field of Dreams (pending)’.
The thought of floating, falling from grace and bearing the collective brunt of the investor agitatus species did not appeal. Remember that this is a species that, once deprived of its staple dividend feed, is characteristically known for its long term memory capacity, piercing stare and sharp tongue.
Failed capital raisings are less of a risk in the long term damage stakes, incurring only temporary embarassment when the money doesn’t appear in the amounts hoped for, but which may extend to demotion or removal from the Board depending on the level of shareholder angst.
Mergers are a little bit different. In the good times, having done the sums and the long hours in the boardroom and on the golf course, merger plans were hatched and the adrenalin flowed at the prospect of growth, enhanced positioning and market domination, where all competitors were freely offered a reversed Churchillian salute.
That was then. A new reality has now set in. So what happened to all those brave merger plans and brave captains of industry? Well, some plans were shelved but plenty remain in a holding pattern waiting for the financial barometer to shift from CHANGE to FAIR before they once again prepare for take off fuelled by renewed vigour, determination and a modicum of greed.
Many targets remain targets. Some are even more of a target now. Unwilling targets may now be less so, as their value plummets. With a lower price tag they may look even more attractive. Bargain basement opportunities may look too risky depending on the industry sector in which they reside.
All good stuff this, but what does it all mean? It means that once the barometer does shift and media barons raise their thumb in symbolic gesture sometime later in 2009, it will be safe to once more venture out into the sunlight beyond the dark shadows cast by the pillars of the Big Four and timely to buy back the Porsche and worship the Big Deal once more.
Branding consultants like myself will, with renewed enthusiasm, rattle cages and preach the gospel on good brand sense and the important contribution it makes to merger success. Will the deal makers listen? This is the question. In 2009 I think they will, because people learn from mistakes don’t they?
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
View some of Heywood’s work at www.heywood.com.au
Thursday, December 18, 2008
Sunday, November 9, 2008
M&A in a ‘holding pattern’? Now is the time to get your head around the branding implications.
As a result of the global downturn, a considerable number of planned M&As have been put into a ‘formation holding pattern’ pending market recovery. Some have since been permanently shelved, but many are still out there cowering below decks with the hatches battened down, waiting for calmer waters and the chance to fly the flag and sail forth.
While the timing to resurrect interest in M&A deals is at present very much a crystal ball gazing exercise, potential merger partners would do well to take the time to focus on the frequently ignored branding requirements of the merger. After all, your M&A is all about creating future value for the merged entity – value that is greater than that of the merging parties combined – value that is very dependent on your brand’s strength and ability to adapt to change. Yet it is taking decades of miserable M&A performance for the penny to drop and corporate motivation to be balanced with brand motivation.
The lack of success in M&A deals is staggering – McKinsey and Company state that 80% of mergers fail to earn back the cost of the deals. Where else in business would such low performance be tolerated? Arrogance and emotions are contributing factors to the failures, difficulties in agreeing on a name to take the new entity forward and concerns from employees on the viability and longevity of the ‘deal’. It is understandable that company owners can be highly protective of their prized possession which diverts them from making sensible and objective decisions.
The surviving name is a critically important consideration, particularly to satisfy investors, business partners, regulators, clients, employees and suppliers – a not insubstantial and critical audience! There are many other considerations that relate to the brand. How do you ensure that you don’t rock the client boat and lose their confidence? How do you communicate solid rationale for your decision not only for the name but for the way you intend to navigate the brand forward? What’s the new vision? How are you going to handle two sets of values, two sets of customers and two sets of employees? How are you keeping customers and employees informed while the process unfolds? What if the brand architecture needs to be modified or rationalised, particularly where there are complex group structures and subsidiary businesses, particularly where they reside in more than one country?
Our experience at Heywood Innovation is that employee disengagement can easily cause the merger to founder. Inadequate communication on merger rationale and progress, absent leadership, lack of focus and vision for a brave new future, and inconclusive discussion and agreement on new goals can all conspire to reduce the deal’s potential for success.
The CEO and management team must be highly visible as the champions of the new brand before, during and after the deal is cemented. The brand should be portrayed as a symbol of unity and an opportunity for employees, a reaffirmation of market strength for investors and an emotional re-charge for customers.
The fact that many M&As have been put on hold will only serve to dilute confidence. When markets recover, the decision to press ahead must be accomplished with great conviction and confidence. Now is your chance to give serious consideration to the branding implications before the storm subsides, money starts to flow and M&As once again become the flavour of the month.
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
View some of Heywood’s work at www.heywood.com.au
While the timing to resurrect interest in M&A deals is at present very much a crystal ball gazing exercise, potential merger partners would do well to take the time to focus on the frequently ignored branding requirements of the merger. After all, your M&A is all about creating future value for the merged entity – value that is greater than that of the merging parties combined – value that is very dependent on your brand’s strength and ability to adapt to change. Yet it is taking decades of miserable M&A performance for the penny to drop and corporate motivation to be balanced with brand motivation.
The lack of success in M&A deals is staggering – McKinsey and Company state that 80% of mergers fail to earn back the cost of the deals. Where else in business would such low performance be tolerated? Arrogance and emotions are contributing factors to the failures, difficulties in agreeing on a name to take the new entity forward and concerns from employees on the viability and longevity of the ‘deal’. It is understandable that company owners can be highly protective of their prized possession which diverts them from making sensible and objective decisions.
The surviving name is a critically important consideration, particularly to satisfy investors, business partners, regulators, clients, employees and suppliers – a not insubstantial and critical audience! There are many other considerations that relate to the brand. How do you ensure that you don’t rock the client boat and lose their confidence? How do you communicate solid rationale for your decision not only for the name but for the way you intend to navigate the brand forward? What’s the new vision? How are you going to handle two sets of values, two sets of customers and two sets of employees? How are you keeping customers and employees informed while the process unfolds? What if the brand architecture needs to be modified or rationalised, particularly where there are complex group structures and subsidiary businesses, particularly where they reside in more than one country?
Our experience at Heywood Innovation is that employee disengagement can easily cause the merger to founder. Inadequate communication on merger rationale and progress, absent leadership, lack of focus and vision for a brave new future, and inconclusive discussion and agreement on new goals can all conspire to reduce the deal’s potential for success.
The CEO and management team must be highly visible as the champions of the new brand before, during and after the deal is cemented. The brand should be portrayed as a symbol of unity and an opportunity for employees, a reaffirmation of market strength for investors and an emotional re-charge for customers.
The fact that many M&As have been put on hold will only serve to dilute confidence. When markets recover, the decision to press ahead must be accomplished with great conviction and confidence. Now is your chance to give serious consideration to the branding implications before the storm subsides, money starts to flow and M&As once again become the flavour of the month.
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
View some of Heywood’s work at www.heywood.com.au
Tuesday, September 30, 2008
Post M&A Branding – Part 3 of 3 posts
Deciding which brand to absorb in the M&A
To get the M&A deal across the line requires significant investment. Attention then turns to rationalisation and new cost efficiencies. What rarely happens in these post-M&A stages is pro-active investment in a branding and communication strategy.
To harness the new brand’s full potential you need to engage an integrated branding and communication methodology which justifies and promotes the new brand.
To optimise the chances of success and to minimise risk, the brand methodology must encompass the key components of:
Discovery
Future vision
Name generation
Definition
Expression
Communications
Delivery
Engagement
Monitoring
There are four strategic sets of communications to consider:
1. External and product brand communications
2. Shareholder communications
3. Employment branding and employee communications
4. Internal brand engagement and change management communications
Must do branding activities pre-and post-M&A
1. Appoint competent brand professionals pre-M&A. Build an ongoing relationship with them and be receptive to their recommendations.
2. Consider branding, internal communications and marketing as essential to the success of the M&A process.
3. Allocate a realistic budget specific to the branding activities.
4. Commission ‘Brand Discovery’ research and gain input from:
CEO
Board members
Managers
Key employee groups
Shareholders
Customers
Suppliers
5. Communicate with key audiences before, during and after the M&A.
6. Ensure retained service/product brands are consistent with the parent brand.
7. Determine how to select the most appropriate brand with which to move forward – Survivor, Combo, Evolver or Co-existing and who will be involved in the selection/decision process.
8. Develop a comprehensive employer branding program.
9. Research, define and communicate your unique brand proposition – understand it and believe in it.
10. Communicate to employees, investors and customers the strategic reasons behind the re-brand and what it comprises – this will foster acceptance and buy-in.
11. Establish a branding committee to oversee the development and implementation of the brand as well as brand champions to ensure it achieves its objectives.
12. Agree on an implementation schedule. Measure message and brand penetration and awareness at pre-appointed milestones – give it time.
Conclusion
Employ proven methodologies to determine the most appropriate brand model and allow branding professionals to play their part in helping to determine, communicate and embed the new brand. They will help determine – where it was, where it now is, where it needs to be and how best to get it there.
Remember in the post-M&A landscape that people are core – employee sentiment, investor confidence and customer engagement and loyalty are key factors controlling the success of the M&A. Effective branding and communications will influence and satisfy these audiences and gain their confidence and buy-in.
Managing the brand architecture of merging entities is a complex task. The need for effective brand management increases with the complexity of the M&A and number of brands and sub-brands being brought together.
Engage with a branding and communications process managed by branding professionals.Consider the branding program as an extension of the M&A investment and allocate appropriate resources at an early stage in the process.
If your organisation is at the point of considering a merger or acquisition in Australia, Singapore or the United Kingdom and you need guidance, feel free to contact me tony@heywood.com.au
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
View some of Heywood’s work at www.heywood.com.au
To get the M&A deal across the line requires significant investment. Attention then turns to rationalisation and new cost efficiencies. What rarely happens in these post-M&A stages is pro-active investment in a branding and communication strategy.
To harness the new brand’s full potential you need to engage an integrated branding and communication methodology which justifies and promotes the new brand.
To optimise the chances of success and to minimise risk, the brand methodology must encompass the key components of:
Discovery
Future vision
Name generation
Definition
Expression
Communications
Delivery
Engagement
Monitoring
There are four strategic sets of communications to consider:
1. External and product brand communications
2. Shareholder communications
3. Employment branding and employee communications
4. Internal brand engagement and change management communications
Must do branding activities pre-and post-M&A
1. Appoint competent brand professionals pre-M&A. Build an ongoing relationship with them and be receptive to their recommendations.
2. Consider branding, internal communications and marketing as essential to the success of the M&A process.
3. Allocate a realistic budget specific to the branding activities.
4. Commission ‘Brand Discovery’ research and gain input from:
CEO
Board members
Managers
Key employee groups
Shareholders
Customers
Suppliers
5. Communicate with key audiences before, during and after the M&A.
6. Ensure retained service/product brands are consistent with the parent brand.
7. Determine how to select the most appropriate brand with which to move forward – Survivor, Combo, Evolver or Co-existing and who will be involved in the selection/decision process.
8. Develop a comprehensive employer branding program.
9. Research, define and communicate your unique brand proposition – understand it and believe in it.
10. Communicate to employees, investors and customers the strategic reasons behind the re-brand and what it comprises – this will foster acceptance and buy-in.
11. Establish a branding committee to oversee the development and implementation of the brand as well as brand champions to ensure it achieves its objectives.
12. Agree on an implementation schedule. Measure message and brand penetration and awareness at pre-appointed milestones – give it time.
Conclusion
Employ proven methodologies to determine the most appropriate brand model and allow branding professionals to play their part in helping to determine, communicate and embed the new brand. They will help determine – where it was, where it now is, where it needs to be and how best to get it there.
Remember in the post-M&A landscape that people are core – employee sentiment, investor confidence and customer engagement and loyalty are key factors controlling the success of the M&A. Effective branding and communications will influence and satisfy these audiences and gain their confidence and buy-in.
Managing the brand architecture of merging entities is a complex task. The need for effective brand management increases with the complexity of the M&A and number of brands and sub-brands being brought together.
Engage with a branding and communications process managed by branding professionals.Consider the branding program as an extension of the M&A investment and allocate appropriate resources at an early stage in the process.
If your organisation is at the point of considering a merger or acquisition in Australia, Singapore or the United Kingdom and you need guidance, feel free to contact me tony@heywood.com.au
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
View some of Heywood’s work at www.heywood.com.au
Sunday, September 7, 2008
Merger or Acquisition... that is the question
The more astute companies, or those that are miraculously untouched by the global economic turmoil that we are presently experiencing, will have their minds set on growth. For many companies this is a necessity to ensure that competitors do not get the upper hand and that shareholder confidence is maintained.
The more aggressive and impatient management teams of this world tend to favour the acquisition of complementary businesses over the often slow path to growth.
What looks good on paper in accountants’ terms however, may well not look too rosy when it comes to choosing to keep one brand or the other, or create an entirely new one. This difficult choice, feared by many leaders, is inevitably left until the last moment, instead of being considered an essential component of the main battle plan.
The great danger is that devaluing the importance of the brand before, during and after the process may result in weakening two brands instead of fortifying one. Stakeholders can easily be alienated if future vision and strategy are not present. Of concern is the prospect that the two sets of customers may not embrace the perceived benefits of the combined entity and view it and its leaders with suspicion.
In order to leverage maximum benefits from the ‘deal’ for the benefit of both organisations, I recommend that as a first step several simple and relevant questions are asked by brand managers prior to the ‘deal’ to solicit responses from key players and help bring clarity and perspective to the situation.
Brands can merge in a number of ways. Which is the right one for you?
There are three main options to consider.
1/. The creation of a single ‘monolithic’ brand. This can be your present one, that of the other organisation or a completely new one that represents the combined strengths of both parties. Example: BMW.
2/. A brand that combines the names of the merged entities. Example: GlaxoSmithKline.
3/. A ‘house of brands’ where the house brands exist in their own right with no noticeable connection to the parent brand Example: Tata and its Jaguar and Land-Rover brands
In order to choose the most appropriate solution for your particular situation, you are well advised to seek the guidance of an external branding expert such as Heywood Innovation. A strong business case must be prepared with bulletproof rationale to minimise the risk of a potentially catastrophic wrong decision.
Will the merged brand be able to position itself favourably?
The aspired positioning of the new entity may well be different to that of the two merging entities. To make this shift it is necessary to determine exactly where the brands sit in the hearts and minds of both stakeholder sets – customers, employees, future job candidates, suppliers, analysts and the general public. The competence, frequency and methods by which both entities communicate with their respective stakeholders must be analysed. The gaps between the two must be measured and also the gaps between the perception of the brands internally and externally. The findings will form the basis of a strategy to differentiate the new entity and position it favourably with key audiences.
What will customers think of the merged entity?
The last thing you want to happen as a result of the merger is to lose the confidence and loyalty of customers from both entities. It makes sense that comprehesive profiling of both sets of customers is undertaken to gain a comprehensive understanding of the reasons why they became customers and why they remain so.
The methodologies that cultivate, nurture and retain customers must be compared and adjusted to suit the new entity. This will involve qualitative research and one-on-one interviews with cross sections of both customer groups. The results of this exercise will determine the optimum solution to calm customer fears, satisfy their need for information, clarify the benefits and reinforce their confidence.
How can the heritage of both parties be leveraged?
The merger activities will add a new chapter to the history of the two merging entities. It is essential that the positive aspects of this heritage are considered, and retained where necessary, to ensure their importance to customer loyalty is not lost or diminished. Heritage can positively influence customer buying decisions. Respect past histories while planning for a brave new future.
How will employees respond to the merger?
Mergers tend to be viewed initially by employees in a more negative light than a positive one. The prospect of working with new and different people, potential duplication of positions leading to retrenchments, new performance goals, new managers, new location... all come to mind before thoughts of new opportunities, potential for advancement, more job satisfaction, more pay etc.
To overcome this demands early involvement in discussions with employees before, during and after the merger process. The need for active communication with them will be at an all time high – the competency of which will contribute considerably to the success of the merger. Benefits to them, to the organisation and to shareholders must be high on the agenda.
The ultimate goal is to have employees act as brand ambassadors, to see the value in the merger and the prospect of a brighter future.
Will a new ‘look and feel’ rock the customer boat?
Customers can be very fickle creatures. They get comfortable with organisations and products they choose and on which they come to rely. Any indication of change is likely to prompt them to re-appraise the time-honoured relationship they have with you. The most obvious triggers are the news of a merger, or a change of name or logo. The visual aspects of a brand are what people tend to recall most succinctly – name, logo, symbols, images and colors. The McDonalds golden arch, the Nike ‘swoosh’ and Apple’s apple are prime examples. Changes to an organisation’s logo can cause once loyal customers to ridicule the organisation, particularly when the media get their hands on a ‘good story’ and ridicule the expense and designer rationale. The BHP Billiton ‘blobs’, the Commonwealth Bank Sao cracker and Vegemite and, in the UK, BT’s ‘prancing pervert’ are indelibly etched in the respective companies’ minds.
It is a foolhardy organisation that fails to respect the relationship customers have with these visual components of the brand. It suggests that the more evolutionary the change, the more chance you have of maintaining customer loyalty. Remember that any changes must be backed up by bulletproof rationale.
Organisations need to undertsand that it takes a qualified and experienced branding expert to navigate a safe passage for the brand(s) through the merger process and to gain support from its internal and external stakeholders.
If your organisation is at the point of considering a merger or acquisition in Australia, Singapore or the United Kingdom and you need guidance, feel free to contact me tony@heywood.com.au
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
View some of Heywood’s work at www.heywood.com.au
The more aggressive and impatient management teams of this world tend to favour the acquisition of complementary businesses over the often slow path to growth.
What looks good on paper in accountants’ terms however, may well not look too rosy when it comes to choosing to keep one brand or the other, or create an entirely new one. This difficult choice, feared by many leaders, is inevitably left until the last moment, instead of being considered an essential component of the main battle plan.
The great danger is that devaluing the importance of the brand before, during and after the process may result in weakening two brands instead of fortifying one. Stakeholders can easily be alienated if future vision and strategy are not present. Of concern is the prospect that the two sets of customers may not embrace the perceived benefits of the combined entity and view it and its leaders with suspicion.
In order to leverage maximum benefits from the ‘deal’ for the benefit of both organisations, I recommend that as a first step several simple and relevant questions are asked by brand managers prior to the ‘deal’ to solicit responses from key players and help bring clarity and perspective to the situation.
Brands can merge in a number of ways. Which is the right one for you?
There are three main options to consider.
1/. The creation of a single ‘monolithic’ brand. This can be your present one, that of the other organisation or a completely new one that represents the combined strengths of both parties. Example: BMW.
2/. A brand that combines the names of the merged entities. Example: GlaxoSmithKline.
3/. A ‘house of brands’ where the house brands exist in their own right with no noticeable connection to the parent brand Example: Tata and its Jaguar and Land-Rover brands
In order to choose the most appropriate solution for your particular situation, you are well advised to seek the guidance of an external branding expert such as Heywood Innovation. A strong business case must be prepared with bulletproof rationale to minimise the risk of a potentially catastrophic wrong decision.
Will the merged brand be able to position itself favourably?
The aspired positioning of the new entity may well be different to that of the two merging entities. To make this shift it is necessary to determine exactly where the brands sit in the hearts and minds of both stakeholder sets – customers, employees, future job candidates, suppliers, analysts and the general public. The competence, frequency and methods by which both entities communicate with their respective stakeholders must be analysed. The gaps between the two must be measured and also the gaps between the perception of the brands internally and externally. The findings will form the basis of a strategy to differentiate the new entity and position it favourably with key audiences.
What will customers think of the merged entity?
The last thing you want to happen as a result of the merger is to lose the confidence and loyalty of customers from both entities. It makes sense that comprehesive profiling of both sets of customers is undertaken to gain a comprehensive understanding of the reasons why they became customers and why they remain so.
The methodologies that cultivate, nurture and retain customers must be compared and adjusted to suit the new entity. This will involve qualitative research and one-on-one interviews with cross sections of both customer groups. The results of this exercise will determine the optimum solution to calm customer fears, satisfy their need for information, clarify the benefits and reinforce their confidence.
How can the heritage of both parties be leveraged?
The merger activities will add a new chapter to the history of the two merging entities. It is essential that the positive aspects of this heritage are considered, and retained where necessary, to ensure their importance to customer loyalty is not lost or diminished. Heritage can positively influence customer buying decisions. Respect past histories while planning for a brave new future.
How will employees respond to the merger?
Mergers tend to be viewed initially by employees in a more negative light than a positive one. The prospect of working with new and different people, potential duplication of positions leading to retrenchments, new performance goals, new managers, new location... all come to mind before thoughts of new opportunities, potential for advancement, more job satisfaction, more pay etc.
To overcome this demands early involvement in discussions with employees before, during and after the merger process. The need for active communication with them will be at an all time high – the competency of which will contribute considerably to the success of the merger. Benefits to them, to the organisation and to shareholders must be high on the agenda.
The ultimate goal is to have employees act as brand ambassadors, to see the value in the merger and the prospect of a brighter future.
Will a new ‘look and feel’ rock the customer boat?
Customers can be very fickle creatures. They get comfortable with organisations and products they choose and on which they come to rely. Any indication of change is likely to prompt them to re-appraise the time-honoured relationship they have with you. The most obvious triggers are the news of a merger, or a change of name or logo. The visual aspects of a brand are what people tend to recall most succinctly – name, logo, symbols, images and colors. The McDonalds golden arch, the Nike ‘swoosh’ and Apple’s apple are prime examples. Changes to an organisation’s logo can cause once loyal customers to ridicule the organisation, particularly when the media get their hands on a ‘good story’ and ridicule the expense and designer rationale. The BHP Billiton ‘blobs’, the Commonwealth Bank Sao cracker and Vegemite and, in the UK, BT’s ‘prancing pervert’ are indelibly etched in the respective companies’ minds.
It is a foolhardy organisation that fails to respect the relationship customers have with these visual components of the brand. It suggests that the more evolutionary the change, the more chance you have of maintaining customer loyalty. Remember that any changes must be backed up by bulletproof rationale.
Organisations need to undertsand that it takes a qualified and experienced branding expert to navigate a safe passage for the brand(s) through the merger process and to gain support from its internal and external stakeholders.
If your organisation is at the point of considering a merger or acquisition in Australia, Singapore or the United Kingdom and you need guidance, feel free to contact me tony@heywood.com.au
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.
View some of Heywood’s work at www.heywood.com.au
Thursday, August 28, 2008
Post M&A Branding – Part 2 of 3 posts
Deciding which brand to absorb in the M&A
The true value inherent in the pre-M&A brands is often not researched and therefore not recognised. Fundamental branding decisions post-M&A are often driven by political or economic motivations rather than objective or strategic ones.
Post M&A branding is often limited in concept to simply re-naming the new entity – hugely important but in terms of a branding journey it represents only the beginning. Crossing this off the ‘to do list’ is not the end of the post-M&A branding activity. The name is a label, the logo a badge and the brand is the total experience created for your key audiences:
1. Employees 2. Customers 3. Shareholders 4. Suppliers
When it comes to choosing a brand model, the options are limited to the following:
1. The Survivor – the stronger and/or more relevant of the two brands is adopted.
2. The Evolver – the two brands become one new brand – part or all of the combined Brand Equity is absorbed to create a new evolved brand.
3. The Combo – the new brand retains the most valuable assets of the merging brands and presents a new brand model based on combining the two names.
4. Co-Existing – both brands co-exist – in acquisition mode, two or more brands are maintained and seen to operate independently of each other.
To select the most appropriate option it is necessary to understand the components that make up the individual brands (pre-M&A) and understand what the post-M&A brand composition is likely to be.
It is likely that the new brand will comprise the most positive attributes of the two merged entities. We need to decide what to retain, what’s duplicated, what’s good, what’s bad and what’s ugly.
Deciding which brand attributes are retained will form the basis of the new brand.
To achieve this we take a journey of brand discovery for each of the merging brands – values, benefits characteristics, differentiators, promise, attributes, drivers and loyalties are all explored with each of your key audiences.
Undertake analysis of brand perception from the two merging entities’ key audiences. When combined with input from M&A visionaries, architects and contributors, a new blueprint evolves for the new brand which details its unique structure and qualities.
The blueprint is then communicated back to the key audiences according to a carefully formulated brand communications campaign.
Finding the best branding options for your M&A
Accepted guidelines exist to steer a way through the complexities of the M&A process. Determining the most appropriate brand direction for the new entity is however, a complex affair devoid of guidelines yet requiring a skillset specific to the M&A branding objectives.
This is where advice from a competent branding professional is highly recommended.
The emotional impact of change on people can destroy the post-M&A process and acceptance of the new brand. It is likely that two camps will form within the merged entity – those for and those against the M&A. There may be fence-sitters but to the larger degree emotions will be polarised and loyalties tested.
M&A groups
For
Brand consultants
Accountants
Lawyers
Stock markets
Senior Execs
Banks (if funding)
Consultants
M&A managers
Auditors
Against
Employees
IT and systems people
Human Resources
Some directors
Managers
Banks (if losing a customer)
Perversely when all the corporate muscle flexing and late night boardroom bartering is over – when the entity should be stronger than ever it is potentially in a weak and vulnerable position.
The M&A is merely an opportunity, a starting point. From here it is poised to take advantage of the combined resources and opportunities. Conversely it may fail as the new engine fails to kick start, talented staff get nervous and uncertain about their future and head for the door, recruiting and re-training budgets escalate, competitors seize the opportunity to attack your customers while you are pre-occupied with the reactive challenges created by the M&A, shareholders react to the adverse sentiment generated by media comment suggesting an inappropriate and expensive branding exercise and resultant exposure of the board’s decisions whereby market value spirals increasingly out of control.
Look out for Part 3 of our three part series.
Click here to subscribe to our M&A Branding blog.
The true value inherent in the pre-M&A brands is often not researched and therefore not recognised. Fundamental branding decisions post-M&A are often driven by political or economic motivations rather than objective or strategic ones.
Post M&A branding is often limited in concept to simply re-naming the new entity – hugely important but in terms of a branding journey it represents only the beginning. Crossing this off the ‘to do list’ is not the end of the post-M&A branding activity. The name is a label, the logo a badge and the brand is the total experience created for your key audiences:
1. Employees 2. Customers 3. Shareholders 4. Suppliers
When it comes to choosing a brand model, the options are limited to the following:
1. The Survivor – the stronger and/or more relevant of the two brands is adopted.
2. The Evolver – the two brands become one new brand – part or all of the combined Brand Equity is absorbed to create a new evolved brand.
3. The Combo – the new brand retains the most valuable assets of the merging brands and presents a new brand model based on combining the two names.
4. Co-Existing – both brands co-exist – in acquisition mode, two or more brands are maintained and seen to operate independently of each other.
To select the most appropriate option it is necessary to understand the components that make up the individual brands (pre-M&A) and understand what the post-M&A brand composition is likely to be.
It is likely that the new brand will comprise the most positive attributes of the two merged entities. We need to decide what to retain, what’s duplicated, what’s good, what’s bad and what’s ugly.
Deciding which brand attributes are retained will form the basis of the new brand.
To achieve this we take a journey of brand discovery for each of the merging brands – values, benefits characteristics, differentiators, promise, attributes, drivers and loyalties are all explored with each of your key audiences.
Undertake analysis of brand perception from the two merging entities’ key audiences. When combined with input from M&A visionaries, architects and contributors, a new blueprint evolves for the new brand which details its unique structure and qualities.
The blueprint is then communicated back to the key audiences according to a carefully formulated brand communications campaign.
Finding the best branding options for your M&A
Accepted guidelines exist to steer a way through the complexities of the M&A process. Determining the most appropriate brand direction for the new entity is however, a complex affair devoid of guidelines yet requiring a skillset specific to the M&A branding objectives.
This is where advice from a competent branding professional is highly recommended.
The emotional impact of change on people can destroy the post-M&A process and acceptance of the new brand. It is likely that two camps will form within the merged entity – those for and those against the M&A. There may be fence-sitters but to the larger degree emotions will be polarised and loyalties tested.
M&A groups
For
Brand consultants
Accountants
Lawyers
Stock markets
Senior Execs
Banks (if funding)
Consultants
M&A managers
Auditors
Against
Employees
IT and systems people
Human Resources
Some directors
Managers
Banks (if losing a customer)
Perversely when all the corporate muscle flexing and late night boardroom bartering is over – when the entity should be stronger than ever it is potentially in a weak and vulnerable position.
The M&A is merely an opportunity, a starting point. From here it is poised to take advantage of the combined resources and opportunities. Conversely it may fail as the new engine fails to kick start, talented staff get nervous and uncertain about their future and head for the door, recruiting and re-training budgets escalate, competitors seize the opportunity to attack your customers while you are pre-occupied with the reactive challenges created by the M&A, shareholders react to the adverse sentiment generated by media comment suggesting an inappropriate and expensive branding exercise and resultant exposure of the board’s decisions whereby market value spirals increasingly out of control.
Look out for Part 3 of our three part series.
Click here to subscribe to our M&A Branding blog.
Monday, July 7, 2008
Yes, we’re terribly sorry! And we won’t do it again. Honest!
A recent international news story tells how China’s Securities Regulatory Commission will now request public apologies from financial advisers of listed companies if returns on mergers and acquisitions fall below 80% of their forecasts. But wait it gets worse! If profit from the deals falls below 50% of their estimates, these poor advisers might get warned or even ordered to report to the authorities regularly. Pretty tough eh? So what happens if the returns fall below 25%?
Tuesday, May 27, 2008
Post M&A Branding – Part 1 of 3 posts
That’s right a post on post-merger branding!
Hello there.This is the first of three successive posts that I am publishing in this blog. They explore re-branding issues that tend to occur when competitors merge or are subject to a takeover.
Re-branding when competitors merge
“Melding two established cultures and sets of working practices into one is notoriously difficult. It is no less difficult doing this with two brands”.
There are many articles in the media commiserating over the pitfalls associated with M&A deals and the potential for disaster. M&As are high risk business situations, which make it all the more necessary to engage professional help to guide to manage the integration process and creation of new branding.
When two entities come together the motivations behind the M&A will undoubtedly have a profound effect on the actions of directors and managers.
These actions will in turn have a direct effect on employee, customer and investor engagement with the new entity or brand.
Why would competitors merge? Two entities or brands on the same path might merge:
• to form a bigger entity
• to achieve economies of scale
• to achieve or move towards market dominance
• to remove a problem competitor
• to acquire new skill set(s) or knowledge base
• to extend or complement a product or service range
• to take advantage of geographic dispersal > supply chain > distribution outlet
• to diversify product(s) and/or enter new markets
• to acquire advanced technology or access critical IP
• to ‘own’ a part of the supply chain or distribution
The new brand has to retain or represent no less value than that of the merging brands. The new brand must leverage the assimilated Brand Equity and values and actively support the new entity moving forward.
To achieve this you will need to identify the merging entities’ previous core brand values and determine where they align, where they clash and which to embrace. Brand values are surrounded by emotional attachments. The way you manage these attachments, sensitivities and post-M&A brand objectives will dictate the reaction to, and engagement with, the new brand.
Any post-M&A brand strategy must comprehensively elevate the new brand and engage these four key audiences with it:
1. Employees 2. Customers 3. Shareholders 4. Suppliers
If the M&A is to influence these audiences and gain buy-in, then dedicated pre- and post-M&A brand communications are necessary.
Customers
Key to a successful M&A between competitors is the new entity’s ability to retain or enhance the inherent value of the merging brands throughout this period of change and evolution. Retaining key customer relationships and brand loyalties is fundamental to its financial success.
– Take care to understand the make up of both the merging brands. Look carefully at what can be retained in terms of Brand Equity, market presence, reputation and brand values. Be sure to communicate to your audiences these and any new brand components.
– Launch the new brand. Make it memorable and engaging. Focus on the new brand values. Deliver very quickly and consistently on the new brand promises. Ensure customer-facing employees are engaged with the new brand as soon as possible.
– Engage with both sets of stakeholders pre-M&A to understand the compelling aspects
of both brands and the limits of their loyalty.
Investors
Communication and PR are essential tools to build confidence in the new entity before,
during and after the M&A.
– Is the release of a significant business initiative or innovative product imminent which will consolidate the new entity’s market position irrespective of any branding changes?
– Communicate all the key benefits, advantages, vision and objectives of the M&A to the market.
– Ensure the market is informed of progress and achievements.
Employees
The impact of a M&A is profoundly felt by the employees and suppliers of the merging entities. Certainly it is common for engagement with the M&A to be at its weakest through its employees. Many M&As fail due to negative perceptions from employees who see the way forward purely as a strategy to achieve economies of scale and rationalisation.
Such a strategy is indeed often an integral part of pre-M&A thinking – to look within the new entity for duplication of skillsets, overlap of product ranges and the re-negotiation and rationalisation of supply and distribution chains.
How the M&A is perceived
Unless treated carefully, any aggressive cost cutting and rationalisation can negatively impact on the new brand, particularly if this activity is at odds with the brand’s core values. Timely, open and informative communications must be provided to employees to address any potential negativity, unrest or disillusionment with the M&A.
What is the point of bringing two entities together if the human resources assets walk out the door?
Gen X, Gen Y, and Baby Boomers and the changing employment landscape compound the challenge of brand acceptance – within every organisation there is likely to be a mix. Each group has an entirely different view on change and with their own employment proposition. You need to acknowledge this within employee-specific communications.
Counter uncertainty and fear with strong and compelling employer brand messaging. Inform them of the new brand’s intentions, what it hopes to achieve and the role they play in its success... and more specifically how it will enrich their employment experience. Inspired, motivated and loyal employeesare integral to successful companies.
Retain the key talent, skill and knowledge within the combining entities.
Retain the positive aspects of both cultures – integrate them successfully.
Post M&A brand engagement
Brand is increasingly seen as a key business asset. Defining and developing a compelling re-brand provides the opportunity to present and position the emergent brand values and the future vision.
Click the above diagram to enlarge.
Look out for Part 2 of our three part series.
Click here to subscribe to M&A Branding blog.
FREE M&A branding presentation paper
On 28 May 2008 Neil Cookson, Creative Director at Heywood Innovation, gave a presentation at the IIR Mergers & Acquisitions Strategy 2008 Conference in Sydney. The presentation paper ‘Re-branding post M&A’ outlines the key issues, considerations and procedures in post-merger branding.
A FREE copy can be downloaded here.
Hello there.This is the first of three successive posts that I am publishing in this blog. They explore re-branding issues that tend to occur when competitors merge or are subject to a takeover.
Re-branding when competitors merge
“Melding two established cultures and sets of working practices into one is notoriously difficult. It is no less difficult doing this with two brands”.
There are many articles in the media commiserating over the pitfalls associated with M&A deals and the potential for disaster. M&As are high risk business situations, which make it all the more necessary to engage professional help to guide to manage the integration process and creation of new branding.
When two entities come together the motivations behind the M&A will undoubtedly have a profound effect on the actions of directors and managers.
These actions will in turn have a direct effect on employee, customer and investor engagement with the new entity or brand.
Why would competitors merge? Two entities or brands on the same path might merge:
• to form a bigger entity
• to achieve economies of scale
• to achieve or move towards market dominance
• to remove a problem competitor
• to acquire new skill set(s) or knowledge base
• to extend or complement a product or service range
• to take advantage of geographic dispersal > supply chain > distribution outlet
• to diversify product(s) and/or enter new markets
• to acquire advanced technology or access critical IP
• to ‘own’ a part of the supply chain or distribution
The new brand has to retain or represent no less value than that of the merging brands. The new brand must leverage the assimilated Brand Equity and values and actively support the new entity moving forward.
To achieve this you will need to identify the merging entities’ previous core brand values and determine where they align, where they clash and which to embrace. Brand values are surrounded by emotional attachments. The way you manage these attachments, sensitivities and post-M&A brand objectives will dictate the reaction to, and engagement with, the new brand.
Any post-M&A brand strategy must comprehensively elevate the new brand and engage these four key audiences with it:
1. Employees 2. Customers 3. Shareholders 4. Suppliers
If the M&A is to influence these audiences and gain buy-in, then dedicated pre- and post-M&A brand communications are necessary.
Customers
Key to a successful M&A between competitors is the new entity’s ability to retain or enhance the inherent value of the merging brands throughout this period of change and evolution. Retaining key customer relationships and brand loyalties is fundamental to its financial success.
– Take care to understand the make up of both the merging brands. Look carefully at what can be retained in terms of Brand Equity, market presence, reputation and brand values. Be sure to communicate to your audiences these and any new brand components.
– Launch the new brand. Make it memorable and engaging. Focus on the new brand values. Deliver very quickly and consistently on the new brand promises. Ensure customer-facing employees are engaged with the new brand as soon as possible.
– Engage with both sets of stakeholders pre-M&A to understand the compelling aspects
of both brands and the limits of their loyalty.
Investors
Communication and PR are essential tools to build confidence in the new entity before,
during and after the M&A.
– Is the release of a significant business initiative or innovative product imminent which will consolidate the new entity’s market position irrespective of any branding changes?
– Communicate all the key benefits, advantages, vision and objectives of the M&A to the market.
– Ensure the market is informed of progress and achievements.
Employees
The impact of a M&A is profoundly felt by the employees and suppliers of the merging entities. Certainly it is common for engagement with the M&A to be at its weakest through its employees. Many M&As fail due to negative perceptions from employees who see the way forward purely as a strategy to achieve economies of scale and rationalisation.
Such a strategy is indeed often an integral part of pre-M&A thinking – to look within the new entity for duplication of skillsets, overlap of product ranges and the re-negotiation and rationalisation of supply and distribution chains.
How the M&A is perceived
Unless treated carefully, any aggressive cost cutting and rationalisation can negatively impact on the new brand, particularly if this activity is at odds with the brand’s core values. Timely, open and informative communications must be provided to employees to address any potential negativity, unrest or disillusionment with the M&A.
What is the point of bringing two entities together if the human resources assets walk out the door?
Gen X, Gen Y, and Baby Boomers and the changing employment landscape compound the challenge of brand acceptance – within every organisation there is likely to be a mix. Each group has an entirely different view on change and with their own employment proposition. You need to acknowledge this within employee-specific communications.
Counter uncertainty and fear with strong and compelling employer brand messaging. Inform them of the new brand’s intentions, what it hopes to achieve and the role they play in its success... and more specifically how it will enrich their employment experience. Inspired, motivated and loyal employeesare integral to successful companies.
Retain the key talent, skill and knowledge within the combining entities.
Retain the positive aspects of both cultures – integrate them successfully.
Post M&A brand engagement
Brand is increasingly seen as a key business asset. Defining and developing a compelling re-brand provides the opportunity to present and position the emergent brand values and the future vision.
Click the above diagram to enlarge.Look out for Part 2 of our three part series.
Click here to subscribe to M&A Branding blog.
FREE M&A branding presentation paper
On 28 May 2008 Neil Cookson, Creative Director at Heywood Innovation, gave a presentation at the IIR Mergers & Acquisitions Strategy 2008 Conference in Sydney. The presentation paper ‘Re-branding post M&A’ outlines the key issues, considerations and procedures in post-merger branding.
A FREE copy can be downloaded here.
Monday, May 26, 2008
Mergers and acquisitions are one of the most risky business ventures
They’re a positive minefield. Take a look at the statistics. It is claimed that...
> less than half of the mergers completed during the 80s and 90s ever created real value for shareholders
> the average merger has a 50% chance of reduced productivity and/or profits
> nearly 80% of mergers don’t earn back the costs of the deals themselves
What other business activity would tolerate this lack of success? It amazes me that M&As continue to be so popular. And yet they are. Recessionary trends notwithstanding, they still keep coming. In places like Australia the resources sector has a healthy appetite for them fuelled by the accelerating demand for most things that can be extracted from a land rich in minerals. Shares of listed recruitment firms have been pummelled in recent months as job opportunities start to dry up. Likewise, the volatile equity market and tight credit experienced in recent months have threatened earnings for Australian wealth management firms and brokers. Enter stage left the cashed-up predators.
So what causes M&As to go wrong after the deal is finalised?
Let’s just say that it is a huge challenge to combine two companies, two Boards, two management teams, two brands, two cultures, two sets of employees, two future visions, two IT infrastructures, two sales teams, two marketing departments, two HR teams, two properties, two websites, two intranets, two sets of suppliers, two sets of shareholders... and so it goes on.
The inability to address the integration process is often the No.1 factor in M&A failure. And it’s an expensive one and not only in dollar terms. In the excitement and confusion of the deal-making process where million dollar fees are at stake, the brand often comes a definite second. Yet it is the most valuable asset. When all eyes are on the merger process, the brand’s value must be protected at all costs.
Brand visibility is at an all time high during the merger and can be leveraged through timely communications that influence key audiences when they are most receptive. The brand should be protected and not neglected and put to one side. It makes sense that it is considered before, during and after the deal is finalised.
Neil Cookson is Creative Director at Heywood Innovation.
He gives a presentation entitled ‘Re-branding post merger’ at the IIR Mergers & Acquisitions Strategy 2008 Conference in Sydney on 28 May.
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> less than half of the mergers completed during the 80s and 90s ever created real value for shareholders
> the average merger has a 50% chance of reduced productivity and/or profits
> nearly 80% of mergers don’t earn back the costs of the deals themselves
What other business activity would tolerate this lack of success? It amazes me that M&As continue to be so popular. And yet they are. Recessionary trends notwithstanding, they still keep coming. In places like Australia the resources sector has a healthy appetite for them fuelled by the accelerating demand for most things that can be extracted from a land rich in minerals. Shares of listed recruitment firms have been pummelled in recent months as job opportunities start to dry up. Likewise, the volatile equity market and tight credit experienced in recent months have threatened earnings for Australian wealth management firms and brokers. Enter stage left the cashed-up predators.
So what causes M&As to go wrong after the deal is finalised?
Let’s just say that it is a huge challenge to combine two companies, two Boards, two management teams, two brands, two cultures, two sets of employees, two future visions, two IT infrastructures, two sales teams, two marketing departments, two HR teams, two properties, two websites, two intranets, two sets of suppliers, two sets of shareholders... and so it goes on.
The inability to address the integration process is often the No.1 factor in M&A failure. And it’s an expensive one and not only in dollar terms. In the excitement and confusion of the deal-making process where million dollar fees are at stake, the brand often comes a definite second. Yet it is the most valuable asset. When all eyes are on the merger process, the brand’s value must be protected at all costs.
Brand visibility is at an all time high during the merger and can be leveraged through timely communications that influence key audiences when they are most receptive. The brand should be protected and not neglected and put to one side. It makes sense that it is considered before, during and after the deal is finalised.
Neil Cookson is Creative Director at Heywood Innovation.
He gives a presentation entitled ‘Re-branding post merger’ at the IIR Mergers & Acquisitions Strategy 2008 Conference in Sydney on 28 May.
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