Where Mergers & Acquisitions create opportunities — increased product offerings, market diversification, centralized process control — they are counteracted by internal imbalances and the difficulties that accompany marrying brands together. As such, there must be a commitment to brand-building as part of all M&A deals.
While “mergers” and “acquisitions” connote different legal meanings and outcomes, when not correctly executed these deals oftentimes create a similar sense of uncertainty for the organizations involved. In an aptly titled 2019 Forbes article “Most Mergers Fail Because People Aren’t Boxes” David Garrison lays out a number of M&A shortfalls, all of which boil down to misalignment. Simply put, where there is a lack of unified goals and expectations, there is a lack of harmony. And just as unharmonious teams cannot effectively work together, brands that lack an inspiring rallying point crumble as they fail to deliver.
But let’s press pause. The before mentioned is framed in the negative – discussion of failure, imbalance, and incongruence. So why the dearth of negativity? It is, unfortunately, the harsh reality According to Harvard Business Review, between 70-90% of all mergers and acquisitions fail. But at the expense of sounding trite, just because it’s difficult, does not mean that it is impossible. Attention to brand health is an important part of all business transactions, but it is a necessity for successful M&As for the following reasons:
Brands are more than logos and websites (just as people are more than boxes). All too often, the importance of the brand is undermined in the M&A process, seen as simply another exchanged asset. More than logos and websites, brands are the culmination of the internal organization, offered as a promise to consumers. Without proper brand-building initiatives, a lack of internal unity begins to show itself publicly. The brand suffers, and your target customers begin to look for alternative products.
Unification provides a compelling combined story to take to market and an inspiring flag for disparate internal teams to rally around. Brand unity breads brand consistency. Before convincing consumers that a new partnership is worthy of their business, brands must understand internally how the transaction, whether merged or acquired, better positions them to deliver on their value proposition. A compelling combined story not only asserts cohesion to the marketplace but also creates a rallying point for internal teams to center their efforts.
Addressing Brand Architecture confusion before it occurs allows for a more seamless transaction. M&A creates the question “Well, what changes?” for consumers and employees alike. By prioritizing branding-building efforts as part of the M&A process, companies stay ahead of the curve. Internal teams are more aware of how their efforts will roll up to support the new (or continued) goal and consumers are not left wondering how the transaction will affect the involved brands.
Success in a complex environment like the M&A landscape requires attention to details that are oftentimes underleveraged by brands. In order for M&A to have an optimized effect, there must be a commitment to unity – all of which begins with a commitment to emerging from the deal with a cohesive and clear brand, capable of supporting internal functions and delivering on external promises.
At Sustena we have helped developed 35+ new brands to date. By seeking our help and prioritizing brand-building as part of their M&A strategy, these companies make a commitment to their brands’ success in the present and future. Read a little more about some of the M&A companies we have helped develop below.
