Branding consultants make great marriage guidance counsellors

So the two love birds have plighted their corporate troth. The bride cares not one whit for her loss of name and even less so for her loss of virginity in the matrimonial stakes. What a reception. The bride and groom are looking resplendent in their new livery. Thompson Epicyclics and Robinson Ratchets are now merged into a new darling of the stock market - Episylinus. Or so they think. The corporate advisors seemed pretty happy with things during the pre-nuptials, but now they seem noticeably absent (in the south of France). Your HR director has just informed you that there have been a few senior management resignations in the past few days, but that was to be expected. What can possibly go wrong?

Those branding consultants have been knocking on the door for a few months now – trying to get their hands on a new logo commission no doubt. They even managed to push a piece of paper under the CEO’s door. Its tone seemed a little sombre and not in the spirit of the moment. It warned of dire consequences if a strategic approach to post merger branding was not addressed and a competent communications program put in place. “That’s a marketing function isn’t it? Just as if the Board needs another admin consideration to distract them right now! ” announces one of the directors in passing. Your PA gives a discreet cough as she peers round your office door “I thought I’d better inform you... there appears to have been an alarming drop in our share price today”. The consultant’s note painted a dark picture:

> brand equity will suffer
> customers will be confused
> competitors will steal them
> employees will fear for their jobs
> analysts will see the writing on the wall
... and the share price will drop

Somewhere in the distance a bell started to ring.

In the note those ‘branding people’ also quoted some sobering merger statistics:

> 70 percent of merger objectives go unrealised – Booz-Allen & Hamilton
> Productivity drops off 50 percent overall in the first 4-8 months and only 23% earn their cost of capital – CFO Magazine
> Revenue drops in the first three quarters after a merger – McKinsey Consulting
> Merger failure is not a western phenomenon – this year, only a third of the mergers and acquisitions by Chinese companies were considered successful – China Council for the Promotion of International Trade

In these recovering markets, cashed up companies are scrutinising competitors which are low on funding and strategically positioned for growth. Low acquisition price and elimination of a previously troublesome competitor can be compulsive drivers that corporate advisers are once again excited by. Who needs incremental and cautious growth steps when you can make one giant leap for mankind, or at least for your own business (and ego)?

Building a business is not easy. Tell me about it. It’s difficult enough to put together from scratch (and hold together) a talented team, build a culture of excellence and apply leading edge technologies and processes. Try and do this with two existing groups who may have been sworn enemies, who have their own beliefs, values, ways of doing things and their own unshakeable view of the future and how to get there... and you may just have yourself a few challenges, which may just cast some doubt on your own future.

So you’ve probably now got two of everything. And this tends to be expensive. You reach into the cupboard and dust off your grip reaper outfit. Cost cutting looms large. Who goes and who stays? Swoosh goes the scythe. Do we need two brands? Of course not. Swoosh goes the scythe again. Branding consultants. Definitely not. Swoosh. Feels good doesn’t it? Corporate cleansing. Your PA hands you an impressive looking document with the new Episylinus logo emblazoned on its cover. The inside pages are manna from heaven. “Look at the money we just saved”. Back into the cupboard goes the outfit. Out with the Armani. You have yourself some analyst presentations to give.

Those branding consultants just won’t give up – another letter lands on your desk. They’re telling me time’s running out. It is quickly consigned to the bin. A pity, as the crumpled piece of paper asked some pertinent questions:

> do your people clearly understand whether this is a merger or an acquisition? – sounds silly, but get this one wrong and you may have a lot of explaining to do.
> do you really know who your new partner is – did it come out in the due diligence – have you met with them yet?
> you did do a SWOT on their company and yours didn’t you?
> did you confirm what the new brand promises to customers, shareholders and employees – and whether you can keep that promise?
> is the merger the only growth you’re likely to experience? – if so, you’d better invest in some organic growth fertiliser.
> are you focused on how customers are going to react? – yes, both sets!
> are you ploughing ahead doing it all your own way or consulting with ‘the other party’?
> how are you going to judge merger success? – new sales, profitability, growth, employee retention or a slap on the back from fellow directors?
> you’ve decided on the name and identity of the ‘new’ entity haven’t you?
> is your brand implementation team working to a plan? – if so, are you aware of it?
> is your senior team fully briefed on and motivated by the changes? – do any of them have doubts they haven’t shared with you?
> what changes are necessary to your marketing and communication activities? – are the relevant teams on top of all this?
> did you thoroughly test and register the new name(s)?
> who’s in charge of rallying the troops and telling them about the brave new future? – I guess it must be you!
> did anyone remember to tell the PR company what an important job they have to perform?
> are your employees as engaged and raring to go to the same degree as before the merger? If not, why not?

So what are you going to get out of all this hard work? You could probably...

> gain loyalty – from those really important people – customers, shareholders and employees
> integrate into one success story two companies, two cultures, two brands and two sets of employees
> drive new cost efficiencies
> motivate your workforce like never before
> enhance your bottom line
> write your name in the history books
> stay away from the divorce courts   


Tony Heywood is a Sydney-based brand guidance counsellor, founder of Heywood Innovation in Australia, United Kingdom and India, and joint founder of BrandSynergy in Singapore.